Directors Report of K-Lifestyle & Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Eighth Annual Report of K-LIFESTYLE & INDUSTRIES LTD. along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS:

2014-2015 2013-2014 PARTICULARS (Rs. in Lacs) (Rs. in Lacs)

Revenue from operations 73768.87 69032.30

Finance Cost 3349.92 3595.79

Depreciation and Amortization 5189.41 6174.29 Expense

Profit before Exceptional and (21,501.99) (24665.18) Extraordinary Items and Tax

Exceptional Items & - - Extraordinary Items

Profit/Loss before Tax (21,501.99) (24665.18)

Provision for Tax - -

Deferred Tax Assets (904.16) (987.66)

Profit/Loss after Tax (20,597.83) (23677.52)

COMPANY PERFORMANCE:

During the year under review, the performance of the Company was affected on- account of heavy burden of Finance Cost and Depreciation.

During the year, the Revenue from operations of Company has substantially increased to Rs. 73768.87 Lacs as against Rs. 69032.30 Lacs in respect of the previous Financial Year ended 31st March, 2014. The Company has earned during the year Net Loss of Rs. 20,597.83 Lacs as against Net Loss of Rs. 23677.52 Lacs in the previous Financial year ended 31st March, 2014. However, there is no cash loss during the year, the loss is due to heavy burden of Finance Cost and Depreciation 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.

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:

Mr. S. P Jolly and Mr. Dileep Kapre, have resigned w.e.f. 25th March, 2015 and Mr. Kulwinder Kumar Nayyar and Mr. Farindra Bihari Bhuneshwar Rai have resigned from the Company w.e.f. 26th March, 2015, 28th March, 2015 respectively.

The Board of Directors of the Company had appointed Ms. Manasi Indrajit Wadkar (DIN: 05309693), Mr. Jaiprakash Misha (DIN: 07190590) and Mr. Pravinkumar Parekh (DIN: 06894568) as Additional Directors w.e.f. 7th November, 2014, 23rd March, 2015 and 24th March, 2015 respectively. Pursuant to the provisions of Section 161 of the Companies Act, 2013, they 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 their candidature 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 Mr. Rajendra Pathak as a Chief Financial Officer designated as a Key Managerial Personnel of the Company

Mr. Dinesh Kumar has resigned as a Company Secretary of the Company w.e.f. 6th August, 2014.

Further, Ms. Nitika Datt was appointed as a Company Secretary of the Company w.e.f. 4th November, 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 Chairman 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 Chairman 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 Chairman 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.

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 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

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 part of the Annual Report.

Having regard to the provisions of Section 136(1) 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 is part of this Report. The Managing Director has given a certificate of compliance with the Code of Conduct, as required under Clause 49 of the Listing Agreement.

M/s. A. F. Khasgiwala, Practicing Chartered Accountants, Statutory Auditors 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 / Chief Financial Officer (CEO/CFO) 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. 5 (Five) Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with Mr. Shivprasad Shrivastav as Chairman and Mr. Pravin Parekh and Mr. Jaiprakash Mishra 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.

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 is part of this Directors' Report.

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

DIRECTORS' RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

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.

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:// k-lifestyleind.com/wp/related-party-transactions/

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 2.18(k) 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:// k-lifestyleind.com/wp.

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 Note 2.18(i) of the 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:// k-lifestyleind.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).

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.

d) Since the Company does not fall under the list of industries, which should furnish this information in Form A annexed to the aforesaid Rules, the question of furnishing the same does not arise.

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 Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

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 Auditors 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 Auditors of the Company for the Financial Year 2014-15 However, they had resigned from the Company. Therefore your Board had appointed Mr. Vinay Goyal, Chartered Accountant as an 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 Behalf of the Board of Directors Sd /- Sd /-

Place: Mumbai Shivprasad Shrivastav Narayan Ghumatkar Date: 5th August, 2015 Director Director (DIN: 01455458) (DIN: 01717979)

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Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report together with the Audited Account for the Financial Year ended 31st March, 2014. The Summarized performance during the year is as under:

FINANCIAL HIGHLIGHTS:

PARTICULARS 2013-2014 2012-2013 (Rs. in Lacs) (Rs. in Lacs)

Revenue from operations 69032.30 56710.74

Finance Cost 3595.79 3766.63

Depreciation and Amortization Expense 6174.29 6397.04

Profit before Exceptional and Extraordinary Items and Tax (24665.18) (13052.55)

Exceptional Items & Extraordinary Items - -

Profit/Loss before Tax (24665.18) (13052.55)

Provision for Tax - -

Deferred Tax Assets (987.66) 784.86

Profit/Loss after Tax (23677.52) (12267.70)

Note: Previous year figures have been regrouped / rearranged wherever necessary

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 under review, the performance of the Company was affected on account of heavy burden of Finance Cost and Depreciation.

During the year, the Revenue from operations of Company has substantially increased to Rs. 69032.30 Lacs as against Rs. 56710.74 Lacs in respect of the previous Financial Year ended 31st March, 2014. The Company has earned during the year Net Loss of Rs. 23677.52 as against Net Loss of Rs. 12267.70 Lacs in the previous Financial year ended 31st March, 2013. However, there is no cash loss during the year, the loss is due to heavy burden of Finance Cost and Depreciation

DIRECTORS:

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

Further The Board of Directors of the Company appointed Shri. Narayan Ghumatkar as an Additional Director w.e.f. 27th February, 2014. 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 appointed as Director of the Company.

In terms of the Articles of Association of the Company. Shri. Shivprasad Shrivastava and Shri. Pritam Singh Pritam, Independent Directors of the Company whose period of office is liable to determination by retirement of directors by rotation and whose term expires at the ensuing Annual General Meeting. The Company has received requisite notices in writing from members proposing Shri. Shivprasad Shrivastava and Mr. Pritam Singh Pritam for appointment as Independent Director.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to requirement under Section 217(2AA) of the Companies Act, 1956 and Section 134 of the Companies Act, 2013 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 except revised AS-15 applicable to accounting treatment for gratuity and leave encashment which are accounted for on cash basis;

(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 & 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 of the Companies Act, 1956 and accordingly the previous year figures have been adjusted/regrouped/rearranged to confirm with the current year''s figures.

AUDIT COMMITTEE:

The composition of Audit Committee is as given in the Report on Corporate Governance.

SHAREHOLDER''S / INVESTOR GRIEVANCE 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 the M/s. A. F. Khasgiwala & Co., Practicing Chartered Accountants and Mr. S. P. Jolly, Managing Director 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 venders, by rigid compulsory annual training and refresher courses, as well as frequent awareness programmed. 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 the 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.

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 though 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 feedback, 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 systemic 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 required 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, 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

As its operations have expanded to new geographies, the Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution in a number of ways.

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 organization.

EMPLOYEES

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.

AUDITOR''S REPORT

The remarks made by the Auditors in their Report have been suitably dealt within the schedules and notes and therefore, do not call for any further clarification.

AUDITORS:

The Company has received letter from of M/s. A. F. Khasgiwala & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disquali!ed for re-appointment.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

COST AUDIT

The Company has appointed Mr. Pradip M Damania, Cost Accountant, as Cost Auditor he following cost auditor of the Company for conducting the audit of cost records of the Company for the financial year 2013-14.

ACKNOWLEDGEMENT:

Your Directors place on record their appreciation of the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, and Shareholders of the Company.

For and on Behalf of the Board of Directors

Sd/- Place : Mumbai S.P Jolly Date : 30th May, 2014 Chairman

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Mar 31, 2012

The Directors have pleasure in presenting 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:

2011-2012 2010-2011 (Rs in Lacs) (Rs in Lacs)

Revenue from operations 73928.05 63305.36

Finance Cost 3765.95 2364.19

Depreciation and Amortization Expense 6396.69 6003.78

Profit before Exceptional and Extraordinary Items and Tax (5050.94) 41.97

Exceptional Items & Extraordinary Items - -

Profit/Loss before Tax (5050.94) 41.97

Provision for Tax - 8.37

Deferred Tax Assets 568.66 353.91

Profit/Loss after Tax (4482.28) 387.53

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 Company has substantially increased to Rs 73,928.05 Lacs as against Rs 63,305.36 Lacs in respect of the previous Financial Year ended 31st March, 2011, registering a growth of around 17% over the previous Financial Year. The Profit before Depreciation, Interest and Tax is Rs 5111.70 Lacs in the Financial year ended 31st March, 2012 as against Rs 8409.95 Lacs in the previous Financial year ended 31st March, 2011. The Company has earned during the year Net Loss of Rs 4482.28 as against Net Profit of Rs 387.53 Lacs in the previous Financial year ended 31st March, 2011. However, there is no cash loss during the year, the loss is due to heavy burden of Finance Cost and Depreciation.

CORPORATE DEBT RESTRUCTURING :

The Company has entered into the scheme of Corporate 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 the Articles of the Company, Mr. Mahesh Prasad Mehrotra and Mr. Kulwinder Kumar Nayyar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and are eligible for re-appointment. During the year, Mr. Mahalinga Narayanan, Mr. Naresh Chandra Sharma and Ms. Mrinal Tayal, have resigned from the Directorship of the Company w.e.f. 14th October, 2011, 14th October, 2011 and 1st November, 2011 respectively. The resignations were duly accepted. The Board of Directors place on record the valuable services rendered by them and Contribution made by them during their tenure as a Director, in the growth of the Company.

The Board of Directors of the Company in their meeting held on 1st November, 2011 appointed Mr. Farindra Bihari Rai and on 21st February, 2012 appointed Mr. Shivprasad Shrivastav as Additional Directors of the Company.

On 18th November, 2011 the Board of directors appointed Mr. Jaikumar Mishra as Additional Director of the Company and on 21st February, 2012 the Board recorded the sudden and untimely death of Mr. Jaikumar Mishara.

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 & 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 of the Companies Act, 1956 and accordingly the previous year figures have been adjusted/regrouped/rearranged to confirm with the current year's figures.

AUDIT COMMITTEE :

The composition of Audit Committee is as given in the Report on Corporate Governance.

SHAREHOLDERS' / INVESTOR GRIEVANCE 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 the M/s. A. F. Khasgiwala & Co., Practicing Chartered Accountants and Mr. S. P. Jolly, Managing Director 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 venders, by rigid compulsory annual training and refresher courses, as well as frequent awareness programmed. 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 the 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.

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 though 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 systemic 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 & OUTGO :

The particulars required 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, 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 :

As its operations have expanded to new geographies, the Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution in a number of ways.

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:

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 Cost Auditor 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., the Statutory Auditor of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are 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(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT :

Your Directors place on record their appreciation of the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, and Shareholders of the Company.

For and on Behalf of the Board of Directors

Place : Mumbai Sd/-

Date : 27th April, 2012 Navin Kumar Tayal

Chairman

---

Mar 31, 2011

Dear Members,

The Board of Directors hereby presents the 24th Annual Report on the business and operations of your Company along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS:

2010-2011 2009-2010

(Rs in Lacs) (Rs in Lacs)

Sales 63266.73 55623.25

Other Income 38.63 0.95

Profit before Depreciation, Interest and Tax 8409.95 5161.54

Interest & Finance Charges 2364.19 856.24

Depreciation 6003.78 4077.56

Provision for Tax 8.37 38.72

Deferred Tax Assets / Liabilities 353.91 (236.08)

Net Profit 387.53 (47.06)

Profit / (Loss) brought forward from Previous Year 2237.91 2258.97

Appropriated Transfer to NCD Redemption Reserve 0.00 (26.00)

Profit / (Loss) carried to Balance Sheet 2625.44 2237.91

DIVIDEND:

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

REVIEW OF OPERATIONS:

During the year, the Turnover of Company has substantially increased to Rs63266.73 lacs as against Rs 55623.25 Lacs in respect of the previous Financial Year ended 31st March, 2010, registering a growth of around 14% over the previous Financial Year. The Profit before Depreciation, Interest and Tax is Rs 8409.95 Lacs in the Financial year ended 31st March, 2011 as against Rs 5161.54 Lacs in the previous Financial year ended 31st March, 2010. The Company has earned during the year Net Profit of Rs 387.53 Lacs after making provision for taxation of Rs 8.37 Lacs and after considering Deferred tax Assets of Rs 353.91 Lacs as against Loss of Rs (47.06) Lacs in the previous Financial year ended 31st March, 2010.

CHANGE OF NAME OF THE COMPANY:

The name of the Company has been changed from M/s. Krishna Lifestyle Technologies Limited to "K-LIFESTYLE & INDUSTRIES LIMITED" in accordance with the provisions of Section 21 of the Companies Act, 1956. In this regard, the Company has received Fresh Certificate of Incorporation consequent upon Change of name of the Company dated 1st October, 2010, from the Government of India-Ministry of Corporate Affairs, Registrar of Companies, Gujarat, Dadra Nagar Haveli.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Articles of the Company, Mr. Navin Kumar Tayal, Non-Executive Chairman, and Mr. Naresh Chandra Sharma, Director of the Company, retire by rotation at the ensuing Annual General Meeting, and are eligible for re-appointment.

During the year, Mr. Subhash Chandra Bhargava, has resigned from the Directorship of the Company w.e.f. 22nd October, 2010. The Board of Directors place on record the valuable services rendered by Mr. Subhash Chandra Bhargava and Contribution made by him during his tenure as the 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 Directors Responsibilities Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2011, 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 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 2011 on a going concern basis.

AUDIT COMMITTEE:

The composition of Audit Committee is as given in the Report on Corporate Governance.

SHAREHOLDERS / INVESTOR GRIEVANCE 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 the M/s. A. F. Khasgiwala & Co., Practicing Chartered Accountants and Mr. S. P. Jolly, Managing Director 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 venders, by rigid compulsory annual training and refresher courses, as well as frequent awareness programmed. 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 the 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.

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 though 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 systemic 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 required 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Report.

EMPLOYEES:

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 Governments 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 2011.

AUDITORS:

M/s. A. F. Khasgiwala & Co., the Statutory Auditor of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are 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(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT:

Your Directors place on record their appreciation of the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, and Shareholders of the Company.

For and on Behalf of the Board of Directors

Sd/-

Place : Mumbai

Navin Kumar Tayal Date : 29th April, 2011 Chairman

---

Mar 31, 2010

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

FINANCIAL RESULTS:

2009-2010 2008-2009 (Rs. in Lacs) (Rs. in Lacs)

Sales 55623.25 50114.00

Other Income 0.95 3.85

Profit before Depreciation, Interest and Tax 5161.54 2708.83

Interest & Finance Charges 856.24 71.23

Depreciation 4077.56 1665.70

Provision for Tax & Deferred Tax 274.80 115.83

Net Profit (Loss) (47.06) 613.82

Profit / (Loss) brought forward from Previous Year 2258.97 1671.15

Appropriated Transfer to General Reserve (26.00) 26.00

Profit / (Loss) carried to Balance Sheet 2237.91 2258.97

DIVIDEND:

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

REVIEW OF OPERATIONS:

The Company has achieved a Sales Turnover of Rs.55623.25 lacs in Financial Year 2009-10 as against sales of Rs.50114.00 Lacs in Financial Year 2008-09. The Company has recorded Profit before Depreciation, Interest and Tax Rs.5161.54 Lacs as against Rs.2708.83 Lacs in the corresponding previous year. The Company has incurred Loss for the year amounting to Rs. (47.06) Lacs as against Net Profit of Rs. 613.82 Lacs in the previous year due to increase in Depreciation and Increase in interest and Finance Charges.

EXPANSION PROJECTS:

The Company has proposed to expand its existing set up by putting up spinning and knitting plats with 1,02,000 Spindles, This would result in to total capacity expansion of 18221 TPA of the cotton yarn and 8320 TPA OF knitted fabrics at Bhilad (Gujarat) and Additional Processing Capacity of 11508 TPA at Dombiwali (Maharashtra) at an estimated cost of Rs. 422.63 Crore.

The Promoters have already made a capital expenditure of Rs. 73.60 Crore upto March 2010.

FUTURE PLANS:

The Company continues to focus on capacity creation and product process innovation aiming to manufacture high quality products with a wide product variety, wider geographic presence and competent product delivery, company is poised to merge as a progressively diversified and de-risked organization across industry cycle.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Ajay Ramesh Gupta and Mr. Dilip Shankar Kapre, Directors of the Company retire by rotation and being eligible, have offered themselves for re-appointment.

Mr. V. Sridarand Dr. B. Samal resigned as a Director of the Company w.e.f. 17th March, 2010. The Board of Directors place on record the valuable services rendered by them during their tenure as Directors of the Company.

The Board of Directors of the Company in its meeting held on 25th January, 2010 appointed Ms. Mrinal Tayal, on 17th March, 2010 appointed Mr. Mahesh Prasad Mehrotra and Mr. Mahalinga Narayanan as Additional Directors of the Company and on 25th May, 2010 appointed Mr. Subhash Chandra Bhargava as Additional Director of the Company.

All the aforesaid Additional Directors shall hold office upto the date of ensuing Annual General Meeting and are eligible for appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

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

(i) that in the preparation of the annual accounts for the financial year ended 31 st March 2010, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; except revised AS 15 relating to accounting treatment for employees benefits incase of gratuity and leave encashment which have been accounted for on cash basis.

(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 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 2010 on a going concern basis.

AUDIT COMMITTEE

The composition of Audit Committee is as given in the Report on Corporate Governance.

SHAREHOLDERS /INVESTOR GRIEVANCE COMMITTEE:

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

REPORT ON CORPORATE GOVERNANCE:

Your Company has made due compliance as per clause 49 of the Listing Agreement.

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 the M/s. A. F. Khasgiwala & Co., 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 the 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.

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 though 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 systemic 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 required 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Report.

EMPLOYEES:

None of the employees drew remuneration of Rs.24,00,000/- or more per annum/ 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 AUDIT:

The Central Governments 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 2010.

AUDITORS:

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are 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.

ACKNOWLEDGEMENT:

Your Directors place on record their appreciation of the assistance and support extended by all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, and Shareholders of the Company. Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company.

For and on Behalf of the Board of Directors

Sd/- Place: Mumbai Navin Kumar Tayal

Date: 25th May, 2010 Chairman