Directors Report of Vardhman Polytex Ltd.

Mar 31, 2025

Your Directors are pleased to present the 45^th Annual Report of Vardhman Polytex Limited ("the Company") along with the Audited
Financial Statements for the Financial Year ended 31^st March, 2025.

1. Financial Highlights

(Rs. in Lakhs)

PARTICULARS	2024-25	2023-24
Revenue from operations	28,498.24	37,063.81
Other Income	2,608.50	2,897.18
Total Income (1)	31,106.75	39,960.99
Expenses
Cost of material consumed	20,017.43	32,034.82
Purchase of traded goods	3,896.20	-
Changes in inventories of finished goods	(3,096.56)	471.75
Excise duty on sale of goods	2,531.96	-
Employee benefit expense	1,407.78	3,828.45
Finance costs	898.34	335.25
Depreciation and amortization expense	2,416.13	1,047.95
Other expenses	1,543.07	4,918.74
Total Expenses (2)	29,614.35	42,636.97
Profit from operation before exceptional item and Tax (1-2)	1,492.40	(2,675.98)
Exceptional Items: Income/(Loss)		-
Profit before Tax	1,492.40	(2,675.98)
Less: Tax Expenses:
Current Tax	-	-
Deferred Tax (Credit)	-	-
Profit after Tax	1,492.40	(2,675.98)
Other Comprehensive Income:
Re-measurement of defined benefit obligation	27.73	(32.11)
Total Comprehensive Income for the Period	1520.13	(2,708.09)
Earnings Per Share:
Basic	0.45	(1.08)
Diluted	0.45	_(1.08)

Financial Performance & Review

The company was having three production facilities located at
Nalagarh (Himachal Pradesh), Ludhiana (Punjab) and Bathinda
(Punjab) for the manufacturing of yarns and only production
facility at Nalagarh is operational.

Ludhiana Unit:

In March 2025, the company has closed the operations at
manufacturing unit located at Focal Point, Ludhiana to explore
various avenues for the monetization of real estate potential of
the land and streamlining the cash flows of the organization.

Bathinda Unit:

During FY 2023-24, operations at manufacturing unit located
at Badal Road, Bathinda were closed due to non-viability due to
deteriorating condition of machines, high operational cost and
operational losses. Later, it was planned to monetize the land
situated at Bathinda Unit to augment funds. The company has
received approval from Bathinda Development Authority (BDA)
stating its No Objection to establish a Residential Colony subject
to other regulatory approvals from Municipal Corporation and
other Departments. However, pending these approvals, the land
situated at Bathinda unit has been reclassified from fixed assets
to inventory in December, 2024 and is valued at fair value, based

on the Bathinda Tehsil''s collector rate list for agricultural land.
This initial fair value assessment uses agricultural land rates. A
full fair market valuation will be determined after the saleable
area is precisely ascertained.

During FY 2024-25, Revenue from operations is Rs.28,498.24
Lakhs which has come down by 23.11% from Rs.37,063.81
Lakhs in FY 2023-24. The major reasons for reduction in
revenue were closure of operations of Bathinda Unit and the
lower/irregular production activities of manufacturing unit at
Ludhiana and thereafter, its closure as stated above. There is
PBT of Rs.1492.40 Lakhs during FY 2024-25 as compared to last
year''s loss of Rs.2675.98 Lakh

Earlier, the bank accounts of the company were classified as NPA
by the Banks. The company had made efforts to resolve its debts
with Banks. State Bank of India, United Bank of India, Canara
Bank, Bank of Baroda, Bank of Maharashtra, Union Bank of
India (formerly known as Andhra Bank and Corporation Bank)
and Axis Bank have assigned our debt to Phoenix ARC Private
Limited through Assignment Agreements. Further, the company
had settled its debts under OTS with Bank of India, Indian Bank
(Allahabad Bank), Punjab National Bank, J & K Bank, Punjab &
Sind Bank. On November 8, 2023, the Company has accepted/
signed the Letter of Acceptances (LOA) of Phoenix ARC Private

Limited for restructuring of debt and the debt is repayable in
monthly installments upto September, 2026 as per repayment
schedule of LOA. As per the LOA, the liability will recast to the
original amount in case of default.

Consolidated Financial Statements

Consolidated Financial Statements are not required as there is
no subsidiary/ associate/ joint venture of the company.

2. Change in Nature of Business

During the year under review, there was no change in the
nature of Business. However, the land situated at Bathinda
unit has been reclassified from fixed assets to inventory in
December, 2024 initiating the Real Estate Segment of the
company in addition to the existing Textile business.

3. Associate, Joint Venture and Subsidiaries

There is no Subsidiary, Associate Company and Joint
Venture of the Company.

4. Material Subsidiaries:

The Board of Directors of the Company in its meeting had
approved the policy for determining Material Subsidiaries.
At present the Company does not have any Subsidiary/
Material Subsidiary. The Policy on Material Subsidiary
has been posted on the website of the Company at the
following link: https://www.oswalgroup.com/images/
recordupload/determination-of-material-subsidiary-
policy-2022.pdf

5. Transfer to Reserves

The Company has not transferred any amount to the
General Reserves during the year under review.

6. Dividend

Board of directors of the Company did not recommend any
dividend for the year ended 31st March, 2025.

7. Directors & Key Managerial Personnel

Mr. Suresh Kumar Banka is retiring by rotation at the
ensuing Annual General Meeting (AGM), and being eligible,
offers himself for re-appointment. The board recommends
his re-appointment in the forthcoming AGM.

The detailed section on ''Board of Directors'' is given in
the separate section titled ''Corporate Governance Report’
forming part of this Annual Report.

8. Declaration of independence

The Board has received declarations from all the
Independent Directors of the Company confirming that
they meet the criteria of independence as prescribed
under sub-section (6) of Section 149 of the Companies
Act, 2013 and regulation 16 of SEBI (LODR) Regulations,
2015. In the opinion of the Board, they fulfill the conditions
specified in the Act and the Rules made thereunder and are
Independent of the management.

9. Number of Board Meetings

During the year ended 31st March, 2025, Fifteen (15)
meetings of the Board were held on the following
mentioned dates:

SR. NO.	DATE OF BOARD MEETING
1	06-05-2024
2	27-05-2024
3	10-06-2024
4	14-08-2024
5	22-08-2024
6	28-08-2024
7	09-10-2024
8	25-10-2024
9	14-11-2024
10	17-12-2024
11	18-12-2024
12	14-02-2025
13	10-03-2025
14	27-03-2025
15	28-03-2025

10. Mechanism for evaluation of board, committees and
individual directors

Pursuant to the provisions of the Companies Act, 2013
and regulation 17(10) of SEBI (LODR) regulations,
2015, a structured procedure was adopted after taking
into consideration the various aspects of the Board’s
functioning, composition of the Board and its various
Committees, execution and performance of specific duties,
obligations and governance.

The performance evaluation of the Independent Directors
was completed in time. The performance evaluation of the
Chairman and the Non-Independent Directors was carried
out by the Independent Directors. The Board of Directors
expresses its satisfaction with the evaluation process.

The Nomination and Remuneration ("NR") Committee has
laid down proper criteria and procedure to evaluate and
scrutinize performance of the Chairperson, each Executive,
Non-Executive and Independent director, Board as a whole
and its Committees.

The Independent Directors in their meeting held on
14.02.2025, through discussion, evaluated the performance
of non independent directors, Board, Managing Director
and Executive Directors except the director being
evaluated. The minutes of the said meeting were submitted
to Chairman of the Company and also placed before the
Board for their consideration. The Board has carried out
annual performance evaluation of its own performance, the
directors individually as well the evaluation of the working
of its Audit, Nomination & Remuneration and Stakeholders''
Relationship Committee.

While evaluating the performance, the following points
were considered:

i. Participation in Board Meetings and Board Committee
Meetings.

ii. Managing relationship with other directors and
management.

iii. Knowledge and Skill i.e., understanding of duties,
responsibilities, refreshment of knowledge,
knowledge of industry, ability to listens and to present
their views.

iv. Personal attributes like maintain high standard of
ethics and integrity.

v. Strategic perspectives or inputs regarding future
growth of Company and its performance.

11. Familiarization programme for Independent Directors

During FY 2024-25, the Board including all Independent
Directors were explained about their roles, rights,
and responsibilities in the Company through detailed
presentations as per the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015.

The Board including all Independent Directors was
provided with relevant documents, reports and internal
policies to enable them to familiarize with the Company''s
procedures and practices from time to time besides regular
briefing by the members of the Senior Leadership Team.
The Familiarization programme for Independent Directors
is posted on the website www.vpl.in and can be viewed at
the following weblink: https://www.oswalgroup.com/pdf/
disclosure/Familiarisation_Programme.pdf

12. Remuneration Policy

Your Company has set up a Nomination and Remuneration
(''NR'') Committee pursuant to Section 178 of the Act which
has formulated a policy for Directors’ Appointment and
remuneration for Directors, KMP and other employees.
They have also developed the criteria for determining
qualifications, positive attributes and independence of
a Director including making payments to Non-Executive
Directors.

NR Committee takes into consideration the best
remuneration practices being followed in the industry
while fixing appropriate remuneration packages. Further
the compensation package for Directors, Key Managerial
Personnel, Senior Management and other employees are
designed based on the following set of principles:

• Aligning key executive and Board remuneration
with the long term interests of the Company and its
shareholders;

• Minimise complexity and ensure transparency;

• Link to long term strategy as well as annual business
performance of the Company;

• Promotes a culture of meritocracy and is linked to key
performance and business drivers;

• Reflective of line expertise, market competitiveness
so as to attract the best talent.

Your directors affirm that the remuneration paid to
employees, KMP and Directors is as per the Remuneration
Policy of the Company. The Remuneration Policy of the
Company is enclosed as Annexure- A.

13. Directors’ Responsibility Statement

Pursuant to Section 134 of the Act, the Directors state that:

a) in the preparation of the annual accounts for the
Financial Year ended 31^st March, 2025, the applicable
accounting standards have been followed along with
proper explanation relating to material departures, if
any;

b) appropriate accounting policies have been selected
and applied consistently by and have 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 as at 31^st March, 2025 and of the profit and
loss of the Company for the year ended 31^st March,
2025;

c) 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) the annual accounts for the financial year ended 31^st
March, 2025 have been prepared on a going concern
basis;

e) proper internal financial controls were followed by
the Company and such internal financial controls are
adequate and were operating effectively; and

f) proper systems are devised to ensure compliance
with the provisions of all applicable laws and that
such systems were adequate and operating effectively.

14. Management Discussions and Analysis Report

Management Discussions and Analysis Report as required,
pursuant to Schedule V of Securities & Exchange Board of
India (Listing Obligations and Disclosure Requirement)
Regulations, 2015 is annexed and forms part of this Report.

15. Reporting of Fraud by Auditors

During the year under review, Statutory Auditors, Internal
Auditors and Secretarial Auditors have not reported any
instances of fraud committed in the Company by its or
Employees to the Audit Committee under Section 143(12)
of the Companies Act.

16. Amounts due to micro, small and medium enterprises

Based on the information available with the company
regarding the status of the suppliers under the MSME, there
are no dues outstanding to Micro and Small Enterprises as
at 31^st March 2025.

17. Corporate Governance

The Company has complied with the Corporate Governance
requirements, as stipulated in Securities & Exchange Board
of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015. A separate section on Corporate
Governance along with a certificate from the Auditors of
the Company confirming the compliance is annexed and
forms part of this Report.

The Board has also evolved and adopted a Code of Conduct
based on the principles of Good Corporate Governance
and best management practices being followed globally.
The Code of Conduct is available on the Company''s
website at www.vpl.in and can be viewed at: https://www.
oswalgroup.com/images/recordupload/Code-of-Conduct-
or-Ethics-Policy.pdf

18. Material Changes and commitments

Save as mentioned elsewhere in this Report, no material
changes and commitments affecting the financial position
of the Company have occurred between the end of the
financial year of the Company i.e., 31^st March, 2025 and the

date of this Report.

19. Disclosure under the Human Immunodeficiency Virus
and Acquired Immune Deficiency Syndrome (Prevention
and Control) Act, 2017

During the year under review, no complaints were received
under the Human Immunodeficiency Virus and Acquired
Immune Deficiency Syndrome (Prevention and Control)
Act, 2017.

20. Changes in Capital Structure

During FY 2024-25, capital structure of the company has
been changed in the following manner:

• Sub-division/ split of equity shares of Rs. 10 each into
10 shares of Re. 1 each was done on 18.05.2024.

• 8,00,00,000 shares of Re.1 each were allotted
on conversion of 80,00,000 warrants allotted on
preferential share basis to non-promoters.

• 8,30,59,434 shares of Re.1 each were allotted on
rights basis.

• 7,24,50,000 convertible warrants were issued to an
entity falling under Promoter Group as per Reg. 2(1)
(pp) of SEBI (ICDR) Regulations, 2015. Out of this,
2,29,25,000 equity shares of Re. 1 each have been
allotted on conversion of 2,29,25,000 warrants. As on
date, 4,95,25,000 convertible warrants stand pending
for conversion according to the terms.

Consequently, Paid-up capital of the company has been
increased to Rs.45,88,94,004/- consisting of 45,88,94,004
equity shares having of Re.1 each as on 31.03.2025.

21. Application/ any proceeding pending under the
Insolvency & Bankruptcy Code, 2016

During the year under review, neither any application was
made nor any proceeding pending under the Insolvency &
Bankruptcy Code, 2016 against the company.

22. Details of difference between amount of the valuation
done at the time of One Time settlement (OTS) and the
valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof

Not Applicable as no OTS was done during FY 2024-25.

23. Particulars of loans, guarantees and investments u/s
186

Amount outstanding as on March 31, 2025

Particulars	(Rs. In Lakh) Amount
Loans given	Nil
Guarantees given	Nil
Investments made	0.62

During the FY 2024-25, there are no transactions pertaining
to Loans, Guarantees given or Investments made.

24. Related Party Transactions

During FY 2024-25, all contracts/ arrangements/
transactions entered into by your Company with related
parties under Section 188(1) of the Act were in the ordinary
course of business and on an arm''s length basis. During the

year, your Company has not entered into any transactions
with related parties which could be considered ‘material’
as per Regulation 23 of the Securities Exchange Board of
India (Listing Obligations & Disclosure Requirements)
Regulations, 2015 so there is no need to report any
transaction in AOC-2.

Further, during FY 2024-25, there were no materially
significant related party transactions made by your
Company with the Promoters, Directors, Key Managerial
Personnel or other designated persons, which might have
potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit
Committee for its approval. During the year under review,
the Audit Committee has approved transactions through
the Omnibus mode in accordance with the provisions of
the Act and Listing Regulations. Related party transactions
were disclosed to the Board on regular basis as per IND AS
24. Details of related party transactions as per IND AS 24
may be referred to in Note 45 of the Financial Statements.

The policy on Related Party Transactions is available on the
Company''s website at www.vpl.in and can be viewed at:
https://www.oswalgroup.com/pdf/disclosure/policy-on-
related-party-transactions-2025.pdf

None of the Directors has any pecuniary relationships
or transactions vis-a-vis the Company except the
remuneration received by respective directors.

25. Risk Management System

Your Company follows a comprehensive system of Risk
Management and has adopted a procedure for risk
assessment and its minimization. It ensures that all the
risks are timely defined and mitigated in accordance with
the Risk Management Process, including identification
of elements of risk which might threaten the existence of
the Company. Your Company intensely monitors the Risk
Management Process in the Company and the same is
periodically reviewed by the Board. The risk management
policy of the company is placed at the website of the
company www.vpl.in and can be viewed at: https://
www.oswalgroup.com/images/recordupload/risk-
management-policy.pdf

26. Vigil Mechanism/ Whistle Blower Policy

The Company promotes ethical behavior in all its business
activities and has put in place a mechanism of reporting
illegal or unethical behavior. The Company has a vigil
mechanism/ whistle blower policy wherein the employees
are free to report violation of laws, rules, regulations or
unethical conduct to their immediate supervisor or such
other person as may be notified by the management to
the workgroups. The confidentiality of person reporting
violation is maintained and he is not subjected to any
discriminatory practice. No person has been denied access
to the chairman of Audit Committee. The vigil mechanism
policy is available at Company''s website www.vpl.in and
can be viewed at: https://www.oswalgroup.com/images/
recordupload/vigil-mechanism-policy.pdf

27. Internal financial controls & their adequacy

The Company has a proper and adequate system of internal
controls. This ensures that all assets are safeguarded and
protected against loss from unauthorized use or disposition

and those transactions are authorized, recorded and
reported correctly. An extensive programme of internal
audits and management reviews supplements the process
of internal control. Internal Audit Reports along with
the management response/action plans are reviewed
by the Audit Committee, on a quarterly basis. Properly
documented policies, guidelines and procedures are laid
down for this purpose. The internal control system has been
designed to ensure that the financial and other records are
reliable for preparing financial and other statements and
for maintaining accountability of assets. The Company has
in place adequate internal financial controls with reference
to financial statements. During the year, such controls were
tested and no reportable material weakness in the design
or operation was observed.

28. Insider Trading Code

In compliance with the SEBI regulations on prevention
of insider trading, the Company has instituted a
comprehensive Code of Conduct for regulating, monitoring
and reporting of trading by Insiders. The said Code laid
down guidelines, which advised them on procedures to
be followed and disclosures to be made, while dealing
with shares of the Company and cautioned them on
consequences of non-compliances.

Further, the Company has put in place a Code of practices
and procedures of fair disclosures of unpublished price
sensitive information. Both the aforesaid Codes are in lines
with the Securities and Exchange Board of India (Prohibition
of Insider Trading) Regulations, 2015. The code of conduct
of the company for prevention of insider trading is placed
at the website of the company under the following link:
https://www.oswalgroup.com/images/recordupload/
code-for-prevention-of-insider-trading-2607.pdf

29. Corporate Social Responsibility

In accordance with the requirements of Section 135 of
Companies Act, 2013, your Company has a Corporate
Social Responsibility (CSR) Committee, which comprises
following directors as on 31st March, 2025:

Sr. No.	Name of Director	Designation in the Committee
1.	Mr. Adish Oswal	Chairman
2.	Mrs. Manju Oswal	Member
3.	Mrs. Sanchi Taneja	Member

The Company considers Corporate Social Responsibility
(CSR) as social obligation, sustainable development,
regulatory environment, human resource management,
safety health & environment and a part of Corporate
Governance and accordingly your Company has formulated
a Corporate Social Responsibility Policy (CSR Policy) which
is available on the website of the Company at www.vpl.in
and can be accessed at the link: https://www.oswalgroup.
com/images/recordupload/CSR-Policy-2021.pdf

The company undertake to do the following activities:

S Eradicating hunger, poverty and malnutrition,
promoting health care including preventive health
care and sanitation including contribution to the
Swach Bharat Kosh set-up by the Central Government
for the promotion of sanitation and making available
safe drinking water:

S Promoting education, including special education
and employment enhancing vocation skills especially
among children, women, elderly and the differently
abled and livelihood enhancement projects;

S Promoting gender equality, empowering women,
setting up homes and hostels for women and orphans;
setting up old age homes, day care centres and such
other facilities for senior citizens and measures
for reducing inequalities faced by socially and
economically backward groups;

S Ensuring environmental sustainability, ecological
balance, protection of flora and fauna, animal welfare,
agroforestry, conservation of natural resources and
maintaining quality of soil, air and water including
contribution to the Clean Ganga Fund set-up by the
Central Government for rejuvenation of river Ganga;

S Protection of national heritage, art and culture
including restoration of buildings and sites of
historical importance and works of art; setting up
public libraries; promotion and development of
traditional art and handicrafts;

S Measures for the benefit of armed forces veterans,
war widows and their dependents Central Armed
Police Forces (CAPF) and Central Para Military Forces
(CPMF) veterans, and their dependents including
widows;

S Training to promote rural sports, nationally

recognised sports, paralympic sports and Olympic
sports;

S Contribution to the Prime Minister''s National Relief
Fund or Prime Minister’s Citizen Assistance and Relief
in Emergency Situations Fund (PM CARES Fund) or
any other fund set up by the Central Government for
socio-economic development and relief and welfare
of the Schedule Caste, Tribes, other backward classes,
minorities and women;

S Contributions to incubators or research and

development projects in the field of Science,
technology, engineering and medicine, funded
by Central Government of State Government or
Public sector undertaking or any agency of Central
Government of State Government and

S Contributions to public funded Universities; Indian
Institute of Technology (IITs); National Laboratories
and autonomous bodies established under
Department of Atomic Energy (DAE); Department
of Biotechnology (DBT); Department of Science and
Technology (DST); Department of Pharmaceuticals;
Ministry of Ayurveda, Yoga and Naturopathy, Unani,
Siddha and Homoeopathy (AYUSH); Ministry of
Electronics and Information Technology and other
bodies, namely Defense Research and Development
Organisation (DRDO); Indian Council of Agricultural
Research (ICAR); Indian Council of Medical Research
(ICMR) and Council of Scientific and Industrial
Research (CSIR), engaged in conducting research in
science, technology, engineering and medicine aimed
at promoting Sustainable Development Goals (SDGs).

S Rural development projects

S Slum area development.

S Disaster management, including relief, rehabilitation
and reconstruction activities.

The Annual Report on Corporate Social Responsibility
Activities is annexed herewith as Annexure- B and forms an
integral part of this report.

30. Audit Committee

The Audit Committee of the Company comprised of the
following Non-Executive and Independent Directors as on
31^st March, 2025:

1	Mrs. Sanchi Taneja	Chairperson
2	Mrs. Manju Oswal	Member
3	Mr. Rohit Jain	Member

The details about Audit Committee and its terms of
reference etc. have been given in Corporate Governance
Report. During the Year under review, there was no such
recommendation of the Audit Committee which was not
accepted by the Board.

31. Auditors:

i) Statutory Auditors and Audit Report

M/s. Romesh K. Aggarwal and Associates, Chartered
Accountants, Ludhiana (Firm Registration No.
000711N), were appointed as Statutory Auditors
of the Company at 40^th Annual General Meeting
(AGM) held on 29.09.2020 for a second term of five
consecutive years and they hold the office till the
conclusion of 45^th AGM to be held on 28.08.2025.

M/s Navneet Sehgal & Co, Chartered Accountants,
Ludhiana (Firm Registration No. 008199N) are being
appointed as Statutory Auditors of the Company at
the ensuing 45^th AGM to be held on 28.08.2025 for a
period of five years.

The firm is having a proven record of accomplishment
of around more than 38 years in the fields of
Accounting, Auditing, Direct and Indirect Taxation,
Finance and Consultancy services.

The Auditors'' Report for FY 2024-25 does not contain
any qualifications, reservations or adverse remarks,
which require explanations/comments by the Board.

ii) Secretarial Auditors

Pursuant to the provisions of the Act and the Rules
made thereunder, the Board of Directors of the
Company had appointed M/s Harshit Arora and
Associates, Practising Company Secretaries, in place
of M/s Khanna Ashwani and Associates due to their
resignation, to conduct the Secretarial Audit of the
Company for the Financial Year ended 31st March
2025.

The Secretarial Audit Report for the Financial Year
ended 31^st March, 2025 is annexed herewith as
''Annexure- C, which forms part of this report. There
has been no qualification, reservation, adverse remark
or disclaimer given by the Secretarial Auditors in their
Report.

Further, in terms of the requirement of the Regulation

24A of the SEBI Listing Regulations, the Board
on recommendation of the Audit Committee has
approved the appointment of M/s Harshit Arora and
Associates, Practising Company Secretaries as the
Secretarial Auditors of the Company for five years
i.e. from FY 2025-26 to FY 2029-30, subject to the
Shareholders'' approval at the ensuing AGM.

iii) Cost Auditors

M/s Ramanath Iyer & Company, Cost Accountants,
New Delhi were appointed as the Cost Auditors
of the Company for FY 2024-25 to audit the cost
accounts of the Company. The Board of Directors has
re-appointed M/s Ramanath Iyer & Company, Cost
Accountants, New Delhi, as the Cost Auditors of the
Company to conduct cost audit for the financial year
ended 31^st March, 2026. As per the requirement of
Section 148 of the Companies Act, 2013 read with
rules made there under, the remuneration to be paid
to them is placed for the ratification by the members
at this ensuing Annual General Meeting. The company
has maintained cost records as prescribed under the
Companies Act.

32. Compliance to Secretarial Standards

The company has duly complied with the applicable
Secretarial Standards during the FY 2024-25.

33. Deposits from Public

The Company has not accepted any deposits from public
during the year and as such no amount on account of
principal or interest on public deposits was outstanding as
on the date of balance-sheet.

34. Listing of securities

The shares of the Company are listed on National Stock
Exchange of India Limited (NSE) and BSE Limited. The
Company has paid annual listing fee to exchanges for the
year 2024-25 and also for the year 2025-26.

35. Human Resources Management

Your Company gives utmost importance to human
resource. It considers "Human Resource as Human Capital"
and believes in the development of Human Resource.
The Company strongly believes in the Performance
Management System and always tries to explore and tap
high potential at the Group level to meet new challenges
and competition. Our main tool is training and developing
talent at various levels. Internal and external trainings are
regularly organized for the development of the members/
employees.

The information required under Section 197(12) of the
Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is annexed herewith as '' Annexure-D''.

36. Safety, Health & Environment

The Company''s top priority is safety, with regard to
employment. It encourages safety measures at all
operational levels, especially at floor level. Regular training
programs are conducted to create awareness about the
importance of safety at work. Medical Camps are organized

periodically for welfare of the members. Additionally,
regular medical facilities are also provided to them.

37. Prevention of Sexual Harassment at workplace

The Company has in place a Prevention of Sexual
Harassment policy in line with the requirements of the
Sexual Harassment ofWomen at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. All employees
(permanent, contractual, temporary, trainees) are covered
under this policy. Internal Complaints Committees have
been framed at various locations to redress complaints
of sexual harassment. The Company has not received any
compliant related to sexual harassment during the year.

38. Energy conservation, technology absorption and foreign
exchange earnings and outgo

The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo
stipulated under Section 134(3) (m) of the Companies Act,
2013 read with Rule 8 of The Companies (Accounts) Rules,
2014, is annexed herewith as ''Annexure- E.

39. Annual Return

The Annual Return (Form MGT-7), as required under
Section 92 of the Act read with rules, is available on the
Company''s website viz.

https://www.oswalgroup.com/images/recordupload/
VPI. Annual%20Return%202024.pdf

40. Company Petition

Vardhman Polytex Ltd (VPL) being erstwhile holding
company of FM Hammerle Textiles Limited had filed a
petition u/s 397, 398 of the erstwhile Companies Act,
1956 in the Hon’ble Company Law Board, Principal
Bench, New Delhi against minority shareholder of FMH-
Maschinen Umwelttechnik Transportanlagen Gesellschaft
mbH, Austria [(MUT)- another shareholder], IRIS Textile
GmbH (erstwhile foreign Collaborator), Mr. Josef Hahnl,
Director and Mr. Ishwinder Maddh (erstwhile Alternate
director to Mr. Josef Hahnl) alleging that the activities
and acts of Mr. Josef Hahnl and Mr. Ishwinder Maddh are
in the manner oppressive to VPL. VPL also filed petition
before the CLB to declare that allotment of 1,90,15,920
shares to IRIS (presently held by MUT) as void ab initio
for want of consideration and rectify the register by
cancelling the allotment made to IRIS. In furtherance of the
petition filed by the Company, the MUT filed an application
against OFMHT for oppression and mismanagement. The

Company Law Board (CLB) vide its consolidated order
dated 13.08.2015 has dismissed all the petitions. The
matter pertaining to rectification of register of members
was disposed off against VPL. The same was challenged
before the Punjab & Haryana High Court at Chandigarh
and a stay was granted in the matter by the Hon''ble High
Court. In response to the order of CLB dated 13.08.2015,
Hahnl Group filed two applications at CLB for execution
of above CLB order and for amendment/rectification in
the order. Also MUT had got an order dated 13.10.2017
from Supreme Court of India for adding Vardhman Polytex
limited as a party to purchase the shares pursuant to CLB
Order dated 13.08.2015. Punjab & Haryana High Court,
Chandigarh vide its interim order dated 04-12-2019 has
directed to determine the market value of shares held
by minority shareholders of FM Hammerle Textiles Ltd.
Resolution plan of FMH was approved on 13.03.2020 by
NCLT vide which existing shares of FMH have extinguished.
As per Supreme Court order VPL and MUT shared equally
the fees paid to E & Y for valuation of shares of FMH and
valuation report was duly submitted to Punjab & Haryana
High Court at Chandigarh. Later, all appeals/applications
filed with Punjab & Haryana High Court at Chandigarh
in this regard have been disposed off. MUT has filed an
application with NCLT, Chandigarh for execution of CLB
order dated 13.08.2015. The matter is sub judice.

41. Significant and material orders passed by the regulators
or courts or tribunals

Except as stated in the report, there are no significant and
material orders passed by the Regulators or Courts or
Tribunals which would impact the going concern status of
the Company.

42. Acknowledgements

The Board places on record its sincere appreciation for the
immense support received from the customers, vendors,
business associates, shareholders, Financial Institutions,
Governments and for the significant contribution made by
employees of the Company.

For and on behalf of the Board
Sd/-

(Adish Oswal)

Date: 28.07.2025 Chairman and Managing Director

Place: Ludhiana (DIN-00009710)

---

Mar 31, 2024

Financial Performance & Review

Revenue from operations has come down to Rs.37,063.81 Lakhs showing declined by Rs.24,487.24 Lakhs and 39.78% in FY 2023-24 from Rs.61,551.04 Lakhs in FY 2022-23. The major reason for reduction in revenue is the lower / irregular production activities of one of the manufacturing units of the company located at Bathinda

Your Directors are pleased to present the 44^th Annual Report on the affairs of the Company together with Audited Financial Statements for the year ended 31^st March, 2024.

1. Financial Highlights		('' in Lakhs)
PARTICULARS	2023-24	2022-23
Revenue from operations (Net)	37,063.81	61,551.04
Other Income	2,897.18	615.82
Total Income (1)	39,960.99	62,166.86
Expenses
Cost of material consumed	32,034.82	46,825.84
Purchase of traded goods	-	4,088.19
Changes in inventories of	471.75	2,126.15
finished goods
Excise duty on sale of goods	-	-
Employee benefit expense	3,828.45	4,518.37
Finance costs	335.25	5,340.09
Depreciation and amortization	1,047.95	1,219.39
expense
Other expenses	4,918.74	7,619.32
Total Expenses (2)	42,636.97	71,737.35
Profit from operation before	(2,675.98)	(9,570.49)
exceptional item and Tax (1-2)
Exceptional Items: Income/(Loss)	-	9,719.63
Profit before Tax	(2,675.98)	149.14
Less: Tax Expenses:
Current Tax	-	-
Deferred Tax (Credit)	-	-
Profit after Tax	(2,675.98)	149.14
Other Comprehensive Income:
Re-measurement of defined	(32.11)	(23.81)
benefit obligation
Total Comprehensive Income	(2,708.09)	125.33
for the Period
Earning Per Share:
Basic	(10.83)	0.67
Diluted	(8.31)	0.67

during the year, which ultimately led to the closure of the operations of unit. This unit had been closed due to operational losses and non - viability due to deteriorating conditions of machines & high operational cost. Further, during the previous F.Y 2022-23 the company had made trading of cotton amounting to Rs. 4594.52 Lakh, which has not been done in the current F.Y 2023-24. Also, during the current F.Y 2023-24 there is major shortfall in the sale of dyed yarn due to adverse market conditions. The above stated reasons impacted the reduction in revenue in F.Y 2023-24. There was loss of Rs.2675.98 Lakhs during FY 2023-24 as compared to last year''s PBT of Rs.149.14 Lakh

Earlier, the bank accounts of the company were classified as NPA by the Banks. The company had made efforts to resolve its debts with Banks. State Bank of India, United Bank of India, Canara Bank, Bank of Baroda, Bank of Maharashtra, Union Bank of India (formerly known as Andhra Bank and Corporation Bank) and Axis Bank have assigned our debt to Phoenix ARC Private Limited through Assignment Agreements. Further, the company had settled its debts under OTS with Bank of India, Indian Bank (Allahabad Bank), Punjab National Bank, J & K Bank, Punjab & Sind Bank. On November 8, 2023, the Company has accepted/ signed the Letter of Acceptances (LOA) of Phoenix ARC Private Limited for restructuring of debt and the debt is repayable in monthly installments upto September, 2026 as per repayment schedule of LOA. As per the LOA, the liability will recast to the original amount in case of default.

Consolidated Financial Statements

Consolidated Financial Statements are not required as there is no subsidiary/ associate/ joint venture of the company.

2. Change in Nature of Business

During the year under review, there was no change in the nature of Business.

3. Associate, Joint Venture and Subsidiaries

There is no Subsidiary, Associate Company and Joint Venture of the Company.

4. Material Subsidiaries:

The Board of Directors of the Company in its meeting had approved the policy for determining Material Subsidiaries. At present the Company does not have any Subsidiary/ Material Subsidiary. The Policy on Material Subsidiary has been posted on the website of the Company at the following link: https://www.oswalgroup.com/images/ recordupload/determination-of-material-subsidiary-policy-2022.pdf

5. Transfer to Reserves

The Company has not transferred any amount to the General Reserves during the year under review.

6. Dividend

Board of directors of the Company did not recommend any dividend for the year ended 31st March, 2024.

7. Directors & Key Managerial Personnel

Mrs. Sanchi Taneja was appointed as Additional Director under the category of Non-Executive Independent Director by the board of directors of the company in their meeting held on 18.07.2023 and later, she was appointed as Director under the category of Non-Executive Independent Director in the AGM held on 18.08.2023, for a period of 4 years w.e.f 18.08.2023.

Mr. Rohit Jain was appointed as Additional Director under the category of Non-Executive Independent Director by the board of directors of the company in their meeting held on 28.03.2024. Later, he was appointed as an Independent Director of the Company for a term of 3 years starting from 4th May, 2024.

Mr. Sanjeev Joshi, Independent Director of the company had resigned from the directorship with effect from

14.09.2023. Board places on record its sincere appreciation for their valuable contribution to the company.

Mr. Sandeep Mehta, Independent Director of the company has tendered resignation from the directorship w.e.f

02.04.2024. Board places on record its sincere appreciation for their invaluable contribution to the company.

Mrs. Manju Oswal, is retiring by rotation at the ensuing Annual General Meeting (AGM), and being eligible, offers herself for re-appointment. The board recommends her reappointment in the forthcoming AGM.

The detailed section on ''Board of Directors'' is given in the separate section titled ''Corporate Governance Report'' forming part of this Annual Report.

8. Declaration of Independence

The Board has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and regulation 16 of SEBI (LODR) Regulations, 2015. In the opinion of the Board, they fulfill the conditions specified in the Act and the Rules made thereunder and are Independent of the management.

9. Number of Board Meetings

During the year ended 31st March, 2024, Eleven (11) meetings of the Board were held on the following mentioned dates:

SR. NO.	DATE OF BOARD MEETING
1	18-05-2023
2	30-05-2023
3	27-06-2023
4	18-07-2023
5	08-08-2023
6	09-09-2023
7	26-10-2023
8	09-1 1-2023
9	13-02-2024
10	06-03-2024
11	28-03-2024

10. Mechanism for evaluation of board, committees and individual directors

Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of SEBI (LODR) regulations, 2015, a structured procedure was adopted after taking into consideration the various aspects of the Board''s functioning, composition of the Board and its various Committees, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed in time. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expresses its satisfaction with the evaluation process.

The Nomination and Remuneration ("NR") Committee has laid down proper criteria and procedure to evaluate and scrutinize performance of the Chairperson, each Executive, Non-Executive and Independent director, Board as a whole and its Committees.

The Independent Directors in their meeting held on 1 3.02.2024, through discussion, evaluated the performance of non independent directors, Board, Managing Director and Executive Directors except the director being evaluated. The minutes of the said meeting were submitted to Chairman of the Company and also placed before the Board for their consideration. The Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders'' Relationship Committee.

While evaluating the performance, the following points were considered:

i. Participation in Board Meetings and Board Committee Meetings.

ii. Managing relationship with other directors and management.

iii. Knowledge and Skill i.e., understanding of duties, responsibilities, refreshment of knowledge, knowledge of industry, ability to listens and to present their views.

iv. Personal attributes like maintain high standard of ethics and integrity.

v. Strategic perspectives or inputs regarding future growth of Company and its performance.

11. Familiarization programme for Independent Directors

During FY 2023-24, the Board including all Independent Directors were explained about their roles, rights, and responsibilities in the Company through detailed presentations as per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5.

The Board including all Independent Directors was provided with relevant documents, reports and internal policies to enable them to familiarize with the Company''s procedures and practices from time to time besides regular briefing by the members of the Senior Leadership Team. The Familiarization programme for Independent Directors

is posted on the website www.vpl.in and can be viewed at the following weblink: https://www.oswalgroup.com/ images/recordupload/familiarisation-programme-id-2023-24.pdf

12. Remuneration Policy

Your Company has set up a Nomination and Remuneration (''NR'') Committee pursuant to Section 1 78 of the Act which has formulated a policy for Directors'' Appointment and remuneration for Directors, KMP and other employees. They have also developed the criteria for determining qualifications, positive attributes and independence of a Director including making payments to Non-Executive Directors.

NR Committee takes into consideration the best remuneration practices being followed in the industry while fixing appropriate remuneration packages. Further the compensation package for Directors, Key Managerial Personnel, Senior Management and other employees are designed based on the following set of principles:

• Aligning key executive and Board remuneration with the long term interests of the Company and its shareholders;

• Minimise complexity and ensure transparency;

• Link to long term strategy as well as annual business performance of the Company;

• Promotes a culture of meritocracy and is linked to key performance and business drivers;

• Reflective of line expertise, market competitiveness so as to attract the best talent.

Your directors affirm that the remuneration paid to employees, KMP and Directors is as per the Remuneration Policy of the Company. The Remuneration Policy of the Company is enclosed as Annexure- A.

13. Directors'' Responsibility Statement

Pursuant to Section 134 of the Act, the Directors state that:

a) in the preparation of the annual accounts for the Financial Year ended 31^st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) appropriate accounting policies have been selected and applied consistently by and have 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 as at 31^st March, 2024 and of the profit and loss of the Company for the year ended 31^st March, 2024;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 201 3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts for the financial year ended 31^st March, 2024 have been prepared on a going concern basis;

e) proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively; and

f) proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Management Discussions and Analysis Report

Management Discussions and Analysis Report as required, pursuant to Schedule V of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 201 5 is annexed and forms part of this Report.

15. Frauds reported by statutory auditors

During the financial year under review, the statutory auditors have not reported any fraud under sub section (1 2) of Section 143 of the Companies Act, 201 3.

16. Amounts due to micro, small and medium enterprises

Based on the information available with the company regarding the status of the suppliers under the MSME, there are no dues outstanding to Micro and Small Enterprises as at 31^st March 2024.

17. Corporate Governance

The Company has complied with the Corporate Governance requirements, as stipulated in Securities & Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. A separate section on Corporate Governance along with a certificate from the Auditors of the Company confirming the compliance is annexed and forms part of this Report.

The Board has also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code of Conduct is available on the Company''s website at www.vpl.in and can be viewed at: https:// www.oswalgroup.com/images/recordupload/Code-of-Conduct-or-Ethics-Policy.pdf

18. Material Changes and commitments

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company i.e., 31^st March, 2024 and the date of this Report.

19. Disclosure under the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 2017

During the year under review, no complaints were received under the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 201 7.

20. Changes in Capital Structure

On June 27, 2023, 1,30,00,000 warrants were allotted to the non-promoters on preferential basis. These warrants were convertible into equivalent number of equity shares of Rs. 1 0 each at a premium of Rs. 30.50 per share within

18 months form the date of allotment and 50,00,000 warrants were converted into equity shares during the year. Consequently, Paid-up capital of the company was increased from Rs. 22,29,09,570 to Rs. 27,29,09,570 consisting of 2,72,90,957 equity shares having of Rs. 10/-each.

Later, Equity shares Rs. 10/- each were sub-divided/split into 10 shares of Re. 1/- each with effect from 18^th May, 2024, resulting into increase in number of shares from 2,72,90,957 shares of Rs. 1 0/- each to 27,29,09,570 shares of Re. 1/- each.

There are 80,00,000 warrants pending for conversion into

80.00. 000 equity shares of Rs.10 each. However, due to sub-division/split of equity shares of Rs. 10/- each into 10 shares of Re. 1/- each on 18^th May, 2024, pending

80.00. 000 warrants will be convertible into 8,00,00,000 shares of Re. 1 each and these warrants can be converted into equity shares on or before 26^th of December, 2024 as per terms.

21. Application/ any proceeding pending under the Insolvency & Bankruptcy Code, 2016

During the year under review, neither any application was made nor any proceeding pending under the Insolvency & Bankruptcy Code, 2016.

22. Details Of difference between amount of the valuation done at the time of One Time settlement (OTS) and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof

Not Applicable as no OTS was done during FY 2023-24.

23. Particulars of loans, guarantees and investments u/s 186

Amount outstanding as on March 31, 2024

('' In Lakh)
Particulars	Amount
Loans given	Nil
Guarantees given	Nil
Investments made	0.62

During the FY 2023-24, there are no transactions pertaining to Loans, Guarantees given or Investments made.

24. Related Party Transactions

During FY 2023-24, all contracts/ arrangements/ transactions entered into by your Company with related parties under Section 188(1) of the Act were in the ordinary course of business and on an arm''s length basis. During FY 2023-24, your Company has not entered into any transactions with related parties which could be considered ''material'' as per Regulation 23 of the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 so there is no need to report any transaction in AOC-2.

Further, during FY 2023-24, there were no materially significant related party transactions made by your Company with the Promoters, Directors, Key Managerial Personnel or other designated persons, which might have potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee for its approval. During the year under review, the Audit Committee has approved transactions through the Omnibus mode in accordance with the provisions of the Act and Listing Regulations. Related party transactions were disclosed to the Board on regular basis as per IND AS 24. Details of related party transactions as per IND AS 24 may be referred to in Note 45 of the Financial Statements.

The policy on Related Party Transactions is available on the Company''s website at www.vpl.in and can be viewed at: https://www.oswalgroup.com/images/recordupload/ policy-on-dealing-with-related-party-transactions-2022.pdf

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company except the remuneration received by respective directors.

25. Risk Management System

Your Company follows a comprehensive system of Risk Management and has adopted a procedure for risk assessment and its minimization. It ensures that all the risks are timely defined and mitigated in accordance with the Risk Management Process, including identification of elements of risk which might threaten the existence of the Company. Your Company intensely monitors the Risk Management Process in the Company and the same is periodically reviewed by the Board. The risk management policy of the company is placed at the website of the company www.vpl.in and can be viewed at: https:// www.oswalgroup.com/images/recordupload/risk-management-pol icy.pdf

26. Vigil Mechanism/ Whistle Blower Policy

The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a vigil mechanism/ whistle blower policy wherein the employees are free to report violation of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the workgroups. The confidentiality of person reporting violation is maintained and he is not subjected to any discriminatory practice. No person has been denied access to the chairman of Audit Committee. The vigil mechanism policy is available at Company''s website www.vpl.in and can be viewed at: https://www.oswalgroup.com/images/ recordupload/vigil-mechanism-policy.pdf

27. Internal financial controls & their adequacy

The Company has a proper and adequate system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly. An extensive programme of internal audits and management reviews supplements the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for

maintaining accountability of assets. The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

28. Insider Trading Code

In compliance with the SEBI regulations on prevention of insider trading, the Company has instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code laid down guidelines, which advised them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioned them on consequences of non-compliances.

Further, the Company has put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in lines with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The code of conduct of the company for prevention of insider trading is placed at the website of the company under the following link: https://www.oswalgroup.com/images/ recordupload/code-for-prevention-of-insider-trading-2607.pdf

29. Corporate Social Responsibility

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has a Corporate Social Responsibility (CSR) Committee, which comprises following directors as on 31st March, 2024:

Sr.	Name of Director	Designation in the
No.		Committee
1.	Mr. Adish Oswal	Chairman
2.	Mrs. Manju Oswal	Member
3.	Mrs. Sanchi Taneja	Member

The Company considers Corporate Social Responsibility (CSR) as social obligation, sustainable development, regulatory environment, human resource management, safety health & environment and a part of Corporate Governance and accordingly your Company has formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at www.vpl.in and can be accessed at the link: https:// www.oswalgroup.com/images/recordupload/CSR-Policy-2021 .pdf

The company undertake to do the following activities:

• Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water:

• Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects;

• Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

• Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga;

• Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional art and handicrafts;

• Measures for the benefit of armed forces veterans, war widows and their dependents Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;

• Training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;

• Contribution to the Prime Minister''s National Relief Fund or Prime Minister''s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, Tribes, other backward classes, minorities and women;

• Contributions to incubators or research and development projects in the field of Science, technology, engineering and medicine, funded by Central Government of State Government or Public sector undertaking or any agency of Central Government of State Government and

• Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defense Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).

• Rural development projects

• Slum area development.

• Disaster management, including relief, rehabilitation and reconstruction activities.

The Annual Report on Corporate Social Responsibility

Activities is annexed herewith as Annexure- B and forms

an integral part of this report.

30. Audit Committee

The Audit Committee of the Company comprised of the following Non-Executive and Independent Directors as on 31^st March, 2024:

1	Mrs. Sanchi Taneja	Chairperson
2	Mrs. Manju Oswal	Member
3	Mr. Rohit Jain	Member

The details about Audit Committee and its terms of reference etc. have been given in Corporate Governance Report. During the Year under review, there was no such recommendation of the Audit Committee which was not accepted by the Board.

31. Auditors:

i) Statutory Auditors

M/s. Romesh K. Aggarwal and Associates, Chartered Accountants, Ludhiana (Firm Registration No. 000711 N), Chartered Accountants were appointed as statutory auditors of the Company at 40^th Annual General Meeting held on 29.09.2020 for a period of five years i.e., till the conclusion of 45^th AGM of the Company.

The observations of Auditor in their Report read with the relevant notes to accounts are self explanatory and therefore do not require further explanation pursuant to Section 134(3)(f)(i) and require no comments except the following observation:

"Note No. 49 of the Ind AS financial statements regarding crediting a profit of Rs 396.44 lacs due on payment of FCCB liability to the statement of profit & loss during the year ended March 31, 2017 which should have been credited in the statement of profit & loss on payment of FCCB liability which is still outstanding to the tune of 216,116 USD as on March 31, 2024 is not in compliance with the requirements of para 27 of the Ind AS 1- Presentation of Financial Statements w.r.t. preparation of financial statements on accrual basis. Consequently, the profit and loss has been overstated by the above mentioned amount. The Company has settled the matter with Axis bank where in a payment plan has been agreed (Final payment date being 30th September 2024).

We further report that, had the impact of our observations made in para above been considered, the net loss and the net worth, for the period ended, would have increased and decreased respectively by Rs. 396.44 lacs."

The Management hereby states that the company had credited the amount on the basis of settlement of FCCB liability repayment of the same has been delayed due to liquidity crisis. Further, the company has settled the matter with Axis Bank wherein a payment plan has been agreed and final payment date is 30^th November, 2024.

ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Khanna Ashwani & Associates, Practicing Company Secretary, Ludhiana to conduct the secretarial audit of the Company for the financial year 2023-24, and reappointed the same for FY 2024-25 also.

Report of the secretarial auditor is annexed herewith as ''Annexure- C, which forms part of this report. Secretarial Audit Report is self-explanatory and there are no such observations/remarks made by the Secretarial Auditors'' in their report which needs further explanation.

iii) Cost Auditors

M/s Ramanath Iyer & Company, Cost Accountants, New Delhi were appointed as the Cost Auditors of the Company for FY 2023-24 to audit the cost accounts of the Company. The Board of Directors has reappointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct cost audit for the financial year ended 31^st March, 2025. As per the requirement of Section 148 of the Companies Act, 2013 read with rules made there under, the remuneration to be paid to them is placed for the ratification by the members at this ensuing Annual General Meeting. The company has maintained cost records as prescribed under the Companies Act.

32. Compliance to Secretarial Standards

The company has duly complied with the applicable Secretarial Standards during the FY 2023-24.

33. Deposits from Public

The Company has not accepted any deposits from public during the year and as such no amount on account of principal or interest on public deposits was outstanding as on the date of balance-sheet.

34. Listing of securities

The shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited. The Company has paid annual listing fee to exchanges for the year 2023-24.

35. Human Resources Management

Your Company gives utmost importance to human resource. It considers "Human Resource as Human Capital" and believes in the development of Human Resource. The Company strongly believes in the Performance Management System and always tries to explore and tap high potential at the Group level to meet new challenges and competition. Our main tool is training and developing talent at various levels. Internal and external trainings are regularly organized for the development of the members/ employees.

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as '' Annexure-D.

36. Safety, Health & Environment

The Company''s top priority is safety, with regard to employment. It encourages safety measures at all operational levels, especially at floor level. Regular training programs are conducted to create awareness about the importance of safety at work. Medical Camps are organized periodically for welfare of the members. Additionally, regular medical facilities are also provided to them.

37. Prevention of Sexual Harassment at workplace

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committees have been framed at various locations to redress complaints of sexual harassment. The Company has not received any compliant related to sexual harassment during the year.

38. Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 1 34(3) (m) of the Companies Act, 201 3 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as ''Annexure- E.

39. Annual Return

The Annual Return (Form MGT-7), as required under Section 92 of the Act read with rules, is available on the Company''s website viz. https://www.oswalgroup.com/ images/recordupload/Annual Return 2023.pdf

40. Company Petition

Vardhman Polytex Ltd (VPL) being erstwhile holding company of FM Hammerle Textiles Limited had filed a petition u/s 397, 398 of the erstwhile Companies Act, 1 956 in the Hon''ble Company Law Board, Principal Bench, New Delhi against minority shareholder of FMH- Maschinen Umwelttechnik Transportanlagen Gesellschaft mbH, Austria [(MUT)- another shareholder], IRIS Textile GmbH (erstwhile foreign Collaborator), Mr. Josef Hahnl, Director and Mr. Ishwinder Maddh (erstwhile Alternate director to Mr. Josef Hahnl) alleging that the activities and acts of Mr. Josef Hahnl and Mr. Ishwinder Maddh are in the manner oppressive to VPL. VPL also filed petition before the CLB to declare that allotment of 1,90,15,920 shares to IRIS (presently held by MUT) as void ab initio for want of

consideration and rectify the register by cancelling the allotment made to IRIS. In furtherance of the petition filed by the Company, the MUT filed an application against OFMHT for oppression and mismanagement. The Company Law Board (CLB) vide its consolidated order dated 13.08.2015 has dismissed all the petitions. The matter pertaining to rectification of register of members was disposed off against VPL. The same was challenged before the Punjab & Haryana High Court at Chandigarh and a stay was granted in the matter by the Hon''ble High Court. In response to the order of CLB dated 1 3.08.201 5, Hahnl Group filed two applications at CLB for execution of above CLB order and for amendment/rectification in the order. Also MUT had got an order dated 13.10.2017 from Supreme Court of India for adding Vardhman Polytex limited as a party to purchase the shares pursuant to CLB Order dated 13.08.2015. Punjab & Haryana High Court, Chandigarh vide its interim order dated 04-12-2019 has directed to determine the market value of shares held by minority shareholders of FM Hammerle Textiles Ltd. Resolution plan of FMH was approved on 13.03.2020 by NCLT vide which existing shares of FMH have extinguished. As per Supreme Court order VPL and MUT shared equally the fees paid to E & Y for valuation of shares of FMH and valuation report was duly submitted to Punjab & Haryana High Court at Chandigarh. Later, all appeals/ applications filed with Punjab & Haryana High Court at Chandigarh in this regard have been disposed off. MUT has filed an application with NCLT, Chandigarh for execution of CLB order dated 13.08.2015. The matter is sub judice.

41. Significant and material orders passed by the regulators or courts or tribunals

Except as stated in the report, there are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

42. Acknowledgements

Your directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

---

Mar 31, 2016

Dear Shareholders,

The Directors of your Company are presenting 36^th Annual Report on the affairs of the Company together with Audited Financial Statements of the Company for the year ended 31^st March, 2016.

1. Financial Highlights

(Rs. in lakh)

Particulars	2015-16	2014-15
Net Operating income	87,808.10	94,240.69
Other Income	5,003.35	2,354.15
Operating Expenses	82,094.68	88,333.00
Profit/(Loss) before Depreciation, Interest & Tax (PBDIT)	10,716.77	8,261.84
Depreciation	2,818.42	3,238.57
Finance Cost	6,996.71	7,255.20
Profit/(Loss) before Tax & exceptional items	901.64	(2,231.94)
Exceptional Items	--	3,585.01
Profit/(Loss) before Tax	901.64	(5,816.95)
Tax Expenses	--	(2,936.74)
Profit/(Loss) after Tax	901.64	(2,880.20)
Earnings Per Share (EPS) (in Rs.) (after exceptional items) - Basic - Diluted	4.04 4.04	(14.02) (14.02)

2. Business Performance

Your Directors are pleased to report the Company''s business performance as follows:

Sales Revenue

During the year under review, net operating income of the Company was Rs. 87,808.10 lakh as against Rs. 94,240.69 lakh in 2014-15, having a decrease of 6.83%. The FOB value of exports during the year has decreased by 11.55% to Rs. 38,245.21 lakh against Rs. 43,237.25 lakh in 2014-15.

Profitability

During the year under review, the Company earned a profit before depreciation, interest & tax of Rs. 10,716.77 lakh as against Rs. 8,261.84 lakh during the previous year. The Company has a net profit after tax of Rs. 901.64 lakh during the current year against net loss of Rs. (2,880.20) lakh in the previous year.

3. Management Discussion & Analysis Report

a) Industry structure and developments

The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector with spinning sector playing pivotal role. The close linkage of the textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textiles industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. At present, Indian textiles sector occupies prominent position in the International textile trade.

The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian textiles industry contributes approximately 5 per cent to India''s Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP). Textiles sector is one of the largest contributors to India''s exports with approximately 11 per cent of total exports. The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same time, exports are implied to increase to US$ 185 billion from approximately US$ 41 billion currently.

Textiles spinning sector globally, seems to be quite unpredictable and uncertain for various reasons including stagnant / diminishing demand as against growing supply side, cotton, futures, currency fluctuations and above all increasing competition from some countries like Vietnam, Bangladesh, Cambodia, Thailand, Indonesia etc. Recently, initiatives launched by Government of India envisages inviting FDI which may give impetus to growth in textiles, particularly the fabric and processing which will lead to balance out the demand supply position for spinning sector.

b) Opportunities and Threats Opportunities:

- Government initiatives to boost textile industry through skill development.

- Make in India campaign.

- Scope for Automation.

- Demand for value added product.

Threats:

- Shortage of skilled manpower.

- Ever increasing input cost i.e. power, finance & logistics.

- Regional imbalance in taxation/ incentives by States.

- Over capacity in spinning sector.

c) Segment wise Performance

During the year under review, the Company has two segments i.e. Textile and Real estates. The segment wise performance is given below:

(Rs. in Lakh)

Particulars	Segment		Total
	Textile	Real Estate
Net Revenue	83,837.24	3,970.86	87,808.10
Segment Result	2,090.21	3,854.95	5,945.16

During the year under review, the Company was able to sell the entire inventories related to Vardhman Park, Ludhiana.

d) Economic Scenario and Outlook

The World Bank projected that India will grow by a robust above 7 per cent in 2016 & next two years and will be the fastest growing economy in the world in next three years which would outpace China. The slow growth of China shall create potential/opportunity to capture their share in the international market.

In the global exports of textiles, India has improved its ranking. To perform consistently at global level appears to be challenge for the textiles sector due to varied reasons including Indian Government''s policy on cotton/fibres, Chinese policy on cotton, erratic demand, currency fluctuations, high conversion & logistic costs and Trans-pacific partnership (TPP) agreement with Vietnam by US & other countries.

Indian textiles industry still has cost advantage at least on a few input costs, besides having self-sustaining cotton crop. However, this alone may not able to be adequate to survive and grow in the international trade. Hence, Indian mills will have to upgrade/ modernize technologically, innovate on development of products/ services and optimize operational and logistic cost to get a positive bottom line.

e) Management perception of Risk & concerns

In today''s challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The main risks inter alia include strategic risk, operational risk, financial risk and compliances & legal risk. The fast technology obsolescence, high cost of manufacturing and irrational taxation are the major risk/ concerns of the business.

The Company has devised and implemented a mechanism for risk management and has developed a Risk Management Policy. The Policy provides for constitution of a Risk Management Committee, which consist directors and senior management personnel. The Company through a risk management committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Audit Committee also evaluates risk management system of the Company periodically.

To cover foreign exchange risk, the Company transacts it’s all exports through secured mode either against LC or partial advance payment and foreign currency is being hedged simultaneously against almost all confirmed contracts. To cover commodity price risk, the orders of finished goods are usually booked in advance as per stock of the raw material inventory. The management procures raw material and sales orders for finished goods are booked forward/ in advance upon proper market analysis, forecasting and information from Internal & external sources.

f) Internal control system & adequacy

Your Company has an adequate internal control system. There is a system of continuous Internal Audit which aims at ensuring effectiveness and efficiency of systems and operations. The internal audit is conducted by external agency/professionals together with in-house Internal Audit Department lead by a qualified Chartered Accountant along with sufficient qualified & experienced staff. The scope of the Internal Audit is not limited to accounts only but includes operations, inventories, costing records, physical verifications of immovable and movable assets etc. on regular basis. The Audit Committee of the Board of Directors approves and reviews audit plans for the year based on internal risk assessment. Audits are conducted on an on-going basis and significant deviations are brought to the notice of the Audit Committee following which corrective action is recommended for implementation. All these measures facilitate timely detection of any irregularities and early remedial steps.

g) Financial Performance

Resource utilization

The gross fixed assets as at 31^st March, 2016 were Rs. 59,169.17 lakh against Rs. 58,361.10 lakh in the previous year. The net block of assets as on 31^st March, 2016 was Rs. 23,867.14 lakh as against Rs. 25,783.85 lakh in the previous year.

Inventory levels as at 31^st March, 2016 were Rs. 7,301.31 lakh as against Rs. 13,790.03 lakh in the previous year. The trade receivable as at 31^st March, 2016 were Rs. 7,411.89 lakh as against Rs. 5,251.99 lakh in the previous year. Decrease in current assets is due to sale of entire inventories related to Vardhman Park.

Financial condition & liquidity

(Rs. in Lakh)

Particulars	2015-16	2014-15
Cash & cash equivalents
Beginning of the year	1,282.73	1,437.33
End of the year	907.80	1,282.73
Net cash provided(used) by:
Operating Activities	10,274.60	7,624.41
Investing Activities	(686.91)	132.59
Financial Activities	(9,962.62)	(7,911.60)

h) Human Resources Management

Your Company gives utmost importance to human resource. It considers "Human Resource as Human Capital" and believes in the development of Human Resource. The Company strongly believes in the Performance Management System and always tries to explore and tap high potential at the Group level to meet new challenges and competition. Our main tool is training and developing talent at various levels. Internal and external trainings are regularly organized for the development of employees.

i) Safety, Health & Environment

The Company''s top priority is safety, with regard to employment. It encourages safety measures at all operational levels, especially at floor level. Regular training programs are conducted to create awareness about the importance of safety at work. Medical Camps are organized periodically for welfare of employees. Additionally, regular medical facilities are also provided to them.

4. Share Capital

During the year under review, there was no change in the paid-up share capital of the Company.

5. Dividend

The Board of Directors of your Company has not recommended any dividend for the financial year 2015-16.

6. Directors & Key Managerial Personnel

During the year under review, Mr. Amit Jain has resigned from the directorship of the Company w.e.f. 10.06.2015 and Mr. Vishal Oswal was appointed as an additional director of the Company w.e.f. 13.02.2016 being an independent director of the Company. Mr. Ashok Kumar Oswal was re-appointed as Chairman & Managing Director and Mr. Adish Oswal as Executive Director of the Company w.e.f. 01.04.2015 for a period of three years.

Mr. Ashok Kumar Goyal was re-appointed as an Executive Director of the Company w.e.f. 01.09.2016 for a period of three years i.e. 01.09.2016 to 31.08.2019 subject to the approval of shareholders in the ensuing Annual General Meeting.

Mrs. Rakhi Oswal, Director retires by rotation at this Annual General Meeting, and being eligible offers herself for re-appointment.

All the Independent Directors have confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

7. Remuneration Policy and Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and Listing Regulations, the Company has adopted Nomination & Remuneration Policy for Directors, KMP and Senior Management Personnel.

The independent directors in their meeting held on 21.12.2015, through discussion, evaluated the performance of non independent directors, Board, Managing Director and Executive Directors. The minutes of the said meeting were submitted to Chairman of the Company and also placed before the Board for their consideration. The Board has carried out annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders'' Relationship Committee. The Nomination & Remuneration Policy containing manner of performance evaluation of the Board/directors/committees is enclosed as ''Annexure-I''. While evaluating the performance, the following points were considered:

(i). Participation in Board Meetings and Board Committee Meetings.

(ii). Managing relationship with other directors and management.

(iii). Knowledge and Skill i.e. understanding of duties, responsibilities, refreshment of knowledge, knowledge of industry, ability to listens and present his views.

(iv). Personal attributes like maintain high standard of ethics and integrity.

(v). Strategic perspectives or inputs regarding future growth of Company and its performance.

8. Board/ Committee Meetings

The details of the Board & Committees meetings held during the year and Board''s Committees composition are furnished in the Corporate Governance Report, which forms part of this Report.

9. Corporate Social Responsibility

The Company considers Corporate Social Responsibility (CSR) as social obligation, sustainable development, regulatory environment, human resource management, safety health & environment and a part of Corporate Governance and accordingly framed CSR policy, which is available on the Company''s website i.e. www.vpl.in. The projects/ programs to be undertaken under CSR are specified in the policy. The CSR Committee of the Company consists of Mr. Ashok Kumar Oswal (Chairman), Mr. Adish Oswal, Mr. Ashok Kumar Goyal, Mr. Ajay Chaudhry and Mrs. Rakhi Oswal.

Due to average loss during preceding three financial years, the Company is not falling under the criteria for spending the amount under CSR. Hence, reporting on CSR activities as per the provisions is not required /applicable.

10. Listing of Securities

The Securities of the Company are listed on National Stock Exchange of India Ltd. (NSE) and BSE Limited. The Company has paid annual listing fee to exchanges for the year 2016-17. Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

11. Subsidiaries, Associates and Joint Venture

The Company has two subsidiaries, namely F.M. Hammerle Textiles Ltd. and F.M. Hammerle Verwaltungs GmbH, Austria, as on 31^st March, 2016. There is no associate company within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

The Company has published audited consolidated financial statements for the financial year ended 31^st March, 2016 and the same forms part of this Annual Report. The Annual Report does not contain the financial statements of our subsidiaries. As per the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is annexed with this Annual Report.

The audited financial statements of these subsidiaries and related information will be made available to any member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection at the Registered Office of the Company/its subsidiaries.

12. Fixed Deposits

During the year, the Company has not accepted any fixed deposits. There is no outstanding deposit as on 31^st March, 2016.

13. Loans, Guarantees or Investments

The particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the financial statements.

14. Company Petition

A petition filed by M/s Maschinen Umwelttechnik Transport anlagen GmbH, Austria (a shareholder of F.M. Hammerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956, has been disposed of by Hon''ble Company Law Board vide its order dated 13.08.2015. The F.M. Hammerle Textiles Ltd. has filed appeals against the above said order of the Hon''ble Company Law Board which are pending adjudication before the Hon''ble High Court for the State of Punjab and Haryana at Chandigarh.

15. Directors'' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013 the Directors state that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) Appropriate accounting policies have been selected and applied consistently and have 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 as at 31^st March, 2016 and of the profit and loss of the Company for the year ended 31^st March, 2016;

(c) 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) The annual accounts have been prepared on a going concern basis;

(e) Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively; and

(f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. Corporate Governance

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015 is annexed to the Report on Corporate Governance.

17. Related Party Transactions

All related party transactions that were entered into during the financial year were on arm''s length basis and in the ordinary course of business. All Related Party transactions were placed before the Audit Committee for approval. The Audit Committee has granted omnibus approval for related party transactions as per the provisions and restrictions contained in the SEBI (LODR) Regulations. There was no material/ significant transaction with the directors or the management, their subsidiaries or relatives etc. that have any potential conflict with interest of the Company at large read with details of transactions as disclosed in Notes on Accounts annexed in the Balance Sheet as per Accounting Standard (AS)-18. The Board has approved a policy for related party transactions which is available on the Company''s website.

No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 is not applicable.

18. Prevention of Sexual Harassment at workplace

The Company has in place a policy for prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committees have been framed at various locations to redress complaints of sexual harassment. The Company has not received any compliant related to sexual harassment during the year.

19. Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the company has adopted a Vigil Mechanism Policy, which is available at Company''s website. The brief contents of the policy are explained in corporate governance report.

20. Auditors

i) Statutory Auditors

M/s S.S. Kothari Mehta & Co. (Firm Registration No-000756N), Chartered Accountants have been appointed as statutory auditors of the Company at 34^th Annual General Meeting for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing Annual General Meeting.

ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Nesar & Associates, Practicing Company Secretary, New Delhi to conduct the secretarial audit of the Company for the financial year 2015-16.

iii) Internal Auditors

M/s S. C. Vasudeva & Associates, Chartered Accountants performed the duties of internal auditors of the Company during financial year 2015-16. The Company is also having full fledged internal audit department headed by qualified chartered accountant and supported by adequate qualified & experienced staff.

iv) Cost Auditors

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct cost audit for the financial year ended 31^st March, 2017. As per the requirement of Section 148 of the Companies Act, 2013 read with rules made there under, the remuneration to be paid to them is placed for the ratification by the members at ensuing Annual General Meeting.

21. Comments on Auditors'' Report and Secretarial Auditors'' Report

Auditors'' Report

The Statutory Auditors of the Company have submitted Auditors'' Report on the Financial Statements of the Company for the financial year ended 31^st March, 2016. In their reports (standalone and consolidated), they have made certain qualifications/observations. The explanation/comments of the Board on the same are as under:

Standalone Auditor''s Report

a) During the year ended 31^st March, 2015, the Company had transferred land used for real estate development from fixed assets into stock in trade explained in note no. 37 of the financial statements. This is at variance with Accounting Standard AS-2 ''Valuation of Inventories'' and Accounting Standard AS-10 ''Accounting for Fixed Assets'', specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. This has resulted in overstatement of cost of development by Rs. 2,958.51 lakh and overstating other income by an amount of Rs. 3,050.17 lakh during the year ended March 31, 2016.

We state that due to sale of entire inventories of Vardhman Park during the year, the Company has transferred all the balance lying in capital reserve Rs. 3,050.16 Lakh as on 31^st March, 2015 to statement of Profit and Loss. Hence, the qualification of the auditors in this respect has been resolved.

b) No provision has been made on the investment and loans and advances made in one of the subsidiary company F.M. Hammerle Textiles Limited of Rs. 9,126.41 lakhs and Rs. 2,662.93 lakhs respectively whose net worth has been completely eroded and having a loss of Rs. 15,452.51 lakhs against share capital of Rs. 12,386.75 lakh as on 31^st March, 2016. This is at variance with Accounting Standard AS-13 ''Accounting for Investments'' specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. This has resulted in profit for the year ended 31^st March, 2016 being overstated and investments, loans and advances and reserves and surplus being overstated by the same amount at 31^st March, 2016.

We state that in view of continuous losses suffered by the company i.e. F.M. Hammerle Textiles Limited which has eroded 100% of the share capital, the said company falls under "Sick Company" under the Sick Industrial and Companies (Special Provisions) Act (SICA) of 1985 and has filed reference to the Board for Industrial and Financial Reconstruction (BIFR).

(c) In respect to observation specified in point (viii) of Annexure-A of the report, we would like to state that due to certain liquidity stress, the Company has delayed for making the payments to Financial Institution/Bankers. In respect to the repayment for the FCCB, it shall be made on/before 31.12.2016.

(d) In respect to qualification specified in Annexure-B of the report, we would like to state that the subsidiary F.M. Hammerle Textiles Limited (FMH) has been referred to BIFR, as FMH is unable to meet its borrowing obligations and material delay have happened to the payments to the vendor. However the holding Company, being a major promoter, making all out efforts to support its operation subject to its own liquidity position being non affective. Such financial supportive decisions are being taken by proper discussion and approval of the Management.

Consolidated Auditor''s Report

The qualifications/observations in the consolidated Auditor''s Report are similar as stated above as point no. (a) & (d) of the Standalone Auditor''s Report. Hence, explanations/Comments of the same are provided above.

Other points of Auditors'' Reports on the Accounts of the Company for the year under review are self-explanatory and require no comments.

Secretarial Auditors'' Report

The Secretarial Auditors'' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditors is annexed herewith as ''Annexure II'', which forms part of this report.

22. Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as ''Annexure III''.

23. Particulars of Employees

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, amended as on date, is annexed herewith as ''Annexure IV''.

24. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as ''Annexure V''.

25. Significant and material orders passed by the regulators or courts or tribunals

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

26. Significant changes occurred during the current year

The following significant changes have occurred between the end of the financial year 2015-16 and the date of this report:-

- Adopted new logo & domain along with rebranding of Products.

- Changed the name of Ludhiana unit from ''Vinayak Textiles Mills'' to ''Vardhman Polytex Limited''.

27. Acknowledgements

Your directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

28. Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Company''s objectives, projections, outlook, expectations, estimates and others may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Company''s operations. These include climatic and economic conditions affecting demand and supply, government regulations & taxation and natural calamities over which the Company does not have any direct control.

For and on behalf of the Board

Sd/-

(Ashok Kumar Oswal)

Date: 12^th August, 2016 Chairman and Managing Director

Place: Ludhiana (DIN-00009403

---

Mar 31, 2015

Dear Members,

The Directors of your Company are presenting 35th Annual Report on the affairs of the Company together with Audited Financial Statements of the Company for the year ended 31st March, 2015.

1. Financial Highlights

(Rs.lac)

Particulars 2014-15 2013-14

Net Operating income 94,240.69 92,271.81

Operating Expenses 88,333.01 83,512.46

Profit/(Loss) before Depreciation, 8,261.84 10,775.47 Interest & Tax & before exceptional items (PBDIT)

Depreciation 3,238.57 3,265.85

Finance Cost 7,255.20 7,177.39

Other Income 2,354.15 2,016.12

Profit/(Loss) before Tax & exceptional (2,231.94) 332.23 items

Exceptional Items 3,585.01 --

Profit/(Loss) before Tax (5,816.95) 332.23

Tax Expenses (2,936.74) (145.28)

Profit/(Loss) after Tax (2,880.20) 477.51

Earnings Per Share (EPS) (in Rs.) (after exceptional items)

- Basic (14.02) 2.59

- Diluted (14.02) 2.28

2. Business Performance

Your Directors are pleased to report the Company's business performance as follows:

Sales Revenue

During the year under review, net operating income of the Company was Rs.94,240.69 lac as against Rs. 92,271.81 lac in 2013-14, registering a marginal increase of 2.09%. The FOB value of exports during the year has marginally decreased by 2.09% to Rs. 43,237.25 lac against Rs. 44,123.61 lac in 2013-14.

Profitability

During the year under review, the Company earned a profit before depreciation, interest & tax of Rs. 8,261.84 lac as against of Rs. 10,775.47 lac during the previous year. The Company has a net loss after tax of Rs. (2,880.20) lac during the current year against net profit of Rs. 477.51 lac in the previous year.

4. Share Capital

During the year under review, paid-up share capital of the company was increased from Rs. 19.82 crore to Rs. 22.29 crore by allotment of 24.73 lac equity shares of Rs. 10/- each at a premium of Rs. 45/- per share to the Promoters/ Promoter Group Company.

5. Redefined the address of Registered Office

During the year under review, the Board vide its resolution dated 31.03.2015 has redefined the address of registered office of the Company from 341-K-1, Mundian Khurd, P.O. Sahabana, Chandigarh Road, Ludhiana-141123 to Vardhman Park, Chandigarh Road, Ludhiana-141123.

6. Dividend

The Board of Directors of your Company has not recommended any dividend for the financial year 2014-15.

7. Directors & Committees

During the financial year 2014-15, Mrs. Rakhi Oswal was appointed as Director of the Company w.e.f. 12.08.2014 being a woman director on the Board. Mr. Ajay Chaudhry, Mr. B. S. Bhatia, Mr. M. D. Kanitkar and Mr. Amit Jain were appointed as Independent Director for a term of five years upto 31.03.2019. All the Independent Directors have confirmed that they meet the criteria of independence as mentioned under clause 49 of the Listing Agreement and Section 149 of the Companies Act, 2013.

Mr. Ashok Kumar Oswal was re-appointed as Chairman and Managing Director of the Company and Mr. Adish Oswal as Executive Director of the Company w.e.f. 01.04.2015 for a period of three years with the approval of shareholders vide resolution dated 30.03.2015.

Mr. Adish Oswal, Director retires by rotation at this Annual General Meeting, and being eligible offers himself for re-appointment.

Mr. Ashok Kumar Oswal, Chairman and Managing Director, Mr. Parvinder Singh, Chief Financial Officer and Mr. Sushil Sharma, Company Secretary were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Remuneration Policy and Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and clause 49 of the Listing Agreement, the Company has adopted Nomination & Remuneration Policy for Directors, KMP and Senior Management Personnel.

The independent directors in their meeting held on 27.12.2014, through discussion, evaluated the performance of non independent directors, Board, Managing Director and Executive Directors. The minutes of the said meeting were submitted to Chairman of the Company and also placed before the Board for their consideration. The Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders' Relationship Committee. The Nomination & Remuneration Policy is enclosed as Annexure-I' and manner of evaluation of the Board is explained in Corporate Governance Report.

Board Meetings

During the year, 5 (Five) meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report, which forms part of the directors' report.

Board's Committee composition

The composition of Audit Committee, Nomination and Remuneration Committee and other Board's Committee is furnished in the Corporate Governance Report, which forms part of the directors' report.

8. Corporate Social Responsibility

The Company has constituted a Corporate Social Responsibility (CSR) Committee consisting of Mr. Ashok Kumar Oswal (Chairman), Mr. Adish Oswal, Mr. Ashok Kumar Goyal, Mr. Ajay Chaudhry and Mrs. Rakhi Oswal as members of the Committee.

The Company has framed a CSR policy and the same has been available on the website of the Company www.owalgroup.com. As per the Policy, the Company considers CSR as social obligation, sustainability development, regulatory environment, human resource management, safety health & environment and a part of Corporate Governance. The projects/ programs to be undertaken under CSR are specified in the policy.

Due to average loss during preceding three financial years, the company is not falling under the criteria for spending the amount under CSR. Hence, reporting on CSR activities as per the provisions is not required /applicable.

9. Listing of securities

The Securities of the Company are listed on National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE). The Company has paid annual listing fee to exchanges for the year 2015-16. Further, Foreign Currency Convertible Bonds (FCCBs) of the company are listed at Singapore Exchange Securities Trading Ltd.

10. Subsidiaries, Associates and Joint Venture

The Company has two subsidiaries, namely F.M. Hammerle Textiles Ltd (Formerly known as Oswal F.M. Hammerle Textiles Ltd) and F.M. Hammerle Verwaltungs GmbH, Austria, as on 31st March, 2015. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

The Company has published the audited consolidated financial statements for the financial year ended 31st March, 2015 and the same forms part of this Annual Report. Accordingly, the Annual Report does not contain the financial statements of our subsidiaries. As per the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is annexed with this Annual Report.

The audited financial statements of these subsidiaries and the related information will be made available to any Member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection at the Registered Office of the Company/its subsidiaries.

Your Company divested its stake of 99.99% ownership in Oswal Industrial Enterprises Private Limited (OIEPL). Consequently, OIEPL ceased to be the subsidiary of the Company with effect from 31st March, 2015. Your Company continues to hold 1,000 equity shares of OIEPL.

11. Fixed Deposits

During the year, the Company has not accepted any fixed deposits. The fixed deposits invited/accepted earlier from the public have been paid during the year and there is no outstanding deposit as at 31st March, 2015.

12. Loans, Guarantees or Investments

The particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the financial statements.

13. Company Petition

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen GmbH, Austria (a shareholder in F.M. Hammerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956 in the Hon'ble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending at the Hon'ble CLB.

14. Directors' Responsibility Statement

Pursuant to Section 134 of the Act, the Directors state that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) Appropriate accounting policies have been selected and applied consistently and have 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 as at 31st March, 2015 and of the profit and loss of the Company for the year ended 31st March, 2015;

(c) 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) The annual accounts have been prepared on a going concern basis;

(e) Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively;

(f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. Corporate Governance

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

16. Related Party Transactions

All related party transactions that were entered into during the financial year were on arm's length basis and in the ordinary course of business. All Related Party transactions were placed before the Audit Committee for approval. The Audit Committee has granted omnibus approval for related party transactions as per the provisions and restrictions contained in the Listing Agreement. There was no material/significant transaction with the directors or the management, their subsidiaries or relatives etc. that have any potential conflict with interest of the Company at large read with details of transactions as disclosed in Notes on Accounts annexed in the Balance Sheet as per Accounting Standard (AS) -18. The Board has approved a policy for related party transactions which has been uploaded on the Company's website.

No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 is not applicable.

17. Prevention of Sexual Harassment at workplace

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any compliant related to sexual harassment during the year 2014-2015.

18. Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the company has adopted a Vigil Mechanism Policy, which is available at Company's website. This brief contents of the policy are explained in corporate governance report.

19. Auditors

i) Statutory Auditors

M/s S.S. Kothari Mehta & Co. (Firm Registration No- 000756N), Chartered Accountants have been appointed as statutory auditors of the Company at 34th Annual General Meeting held on 30.09.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing Annual General Meeting.

ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Nesar & Associates, Practising Company Secretary, New Delhi to undertake the secretarial audit of the Company.

iii) Internal Auditors

M/s S C Vasudeva & Associates, Chartered Accountants performs the duties of internal auditors of the Company. The Company is also having full fledged internal audit department headed by qualified chartered accountant and supported by adequate qualified & experienced staff.

iv) Cost Auditors

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct cost audit for the financial year ended 31st March, 2016. As per the requirement of Section 148 of the Companies Act, 2013, read with rules made there under, the remuneration to be paid to M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2015-16 is placed for ratification by the members at this Annual General Meeting.

20. Comments on Auditors' Report and Secretarial Auditors' Report Auditors' Report

The Statutory Auditors of the Company have submitted Auditors' Report on the Accounts of the Company for the financial year ended 31st March, 2015. In their reports (standalone and consolidated), they have made certain qualifications/observations. The explanation/comments of the Board on the same are as under:

Standalone Auditor's Report

a) The variance with Accounting Standard (AS-2) 'Valuation of Inventories' and Accounting Standard (AS-10) 'Accounting for Fixed Assets' relating to Real Estate Business, resulted in overstating the reserves, current assets, revenue and of cost of development. The land price has been assessed by the management. The difference between book value and assessed price was transferred to capital reserve, while conversion of land into stock in trade. The capital reserve thus created, will be transferred to the Statement of Profit & Loss in proportion of revenue recognized under the percentage of completion method on entering into an agreement to sales on year to year basis, thus showing actual profit earned on sale of real estate.

b) No provision has been made for other than temporary diminution in the value of investment in one of the subsidiary company, F.M. Hammerle Textiles Limited. We state that in view of continuous losses suffered by the company i.e. F.M. Hammerle Textiles Limited which has eroded 100% of the share capital, the company falls under "Sick Company" under the Sick Industrial and Companies (Special Provisions) Act (SICA) of 1985 and is filing an application to the Board for Industrial and Financial Reconstruction (BIFR).

c) Observation that the company has incurred cash losses in the current financial year but not in the immediately preceding financial year.

We state that the loss incurred during the year is due to volatility in the yarn market which is temporary business phase. The management has initiated steps to control cost and efficient/judicious resource utilization, which will help to improve the margins.

d) Observation in respect to default in repayment of dues to financial institutions/banks in respect of various loans and interest.

We state that the Vardhman Polytex Ltd, is regular in meeting its obligations since January, 2015.

However, in F.M. Hammerle Textiles Ltd, due to financial stress, the delay has happened. Further, the company is making application to BIFR.

Consolidated Auditor's Report

The explanation, of qualifications/observations which are also common in consolidated auditor's report, has been provided above, except observation in point no (xii) regarding 'a fraud committed by canteen contractor in a subsidiary - F.M. Hammerle Textiles Ltd'.

We state that the company i.e. F.M. Hammerle Textiles Ltd has initiated the appropriate civil and/ criminal legal proceeding against the contractor and others for the recovery of the amount assessed.

Other points of Auditors' Reports on the Accounts of the Company for the year under review are self-explanatory and require no comments.

Secretarial Auditors' Report

The Secretarial Auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is annexed herewith as 'Annexure II', which forms part of this report.

21. Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as 'Annexure III'.

22. Particulars of Employees

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as 'Annexure IV'.

23. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as 'Annexure V'.

24. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

25. Acknowledgements

Your directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

26. Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Company's objectives, projections, outlook, expectations, estimates and others may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Company's operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, natural calamities over which the Company does not have any direct control.

For and on behalf of the Board

Sd/-

Place: Ludhiana (Ashok Kumar Oswal) Dated: 25th May, 2015 Chairman & Managing Director (DIN-00009403)

---

Mar 31, 2014

Dear Fellow,

The Directors of your Company are presenting their 34th Annual Report on the affairs of the Company together with Audited Financial Statements of the Company for the year ended 31st March, 2014.

1. Financial Results

The financial results for the year are as under:

(Rs. lac) Particulars 2013-14 2012-13

Turnover 92,272.43 78,623.30

Profit/(Loss) before Interest, 10,775.47 9,183.14 Depreciation & Tax

Finance Cost 7,177.39 6,028.24

Profit/(Loss) before 3,598.08 3,154.90 Depreciation & Tax

Depreciation 3,265.85 3,660.07

Profit/(Loss) before Tax 332.23 (505.17)

Provision for Tax (145.28) (622.23)

Profit/(Loss) after Tax 477.51 117.06 Earnings Per Share (EPS) (in Rs.)

* Basic 2.59 0.72

* Diluted 2.28 0.72

2. Business Performance

Your Directors are pleased to report the Company''s business operations performance as follows:

* Sales Revenue

During the year under review, the turnover of the Company was Rs. 92,272.43 lac as against Rs. 78,623.30 lac in 2012-13, registering an increase of 17.36%. The FOB value of exports during the year increased to Rs. 44,123.61 lac from Rs. 30,294.91 lac in 2012-13, registering a growth of 45.65%.

* Profitability

During the year under review, the Company earned a profit before interest, depreciation and tax of Rs. 10,775.47 lac as against of Rs. 9,183.14 lac during the previous year. The Company earned a net profit after tax of Rs. 477.51 lac during the current year against of Rs. 117.06 lac in the previous year.

3. Management Discussion and Analysis Report

(a) Industry structure, Development & Future outlook

India''s textiles and clothing industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors to Indian economy in terms of direct and indirect employment generation and net foreign exchange earnings. Textile sector contributes about 14% to industrial production, 4% to the Gross Domestic Product (GDP) and 27% to the country''s foreign exchange inflows. It provides direct employment to over 45 million people and second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the national economy.

The Indian textiles industry accounts for about 24% of the world''s spindle capacity and 8% of global rotor capacity. The cotton yarn production in India has increased by about 10% during April 2013- February 2014 and the total cloth production grew by 3% during the period April 2013 - February 2014. The Man-Made Fibers (MMF) in Indian textile has successfully established its presence in almost all the countries across the globe. MMF production recorded an increase of 4% during the period April 2013 - February 2014.

The India''s cotton consumption grew by 12% to 4.8 million tons and is expected to grow by 7% to 5.4 million tons in 2014-15. World ending stocks are forecast to increase by 12% in 2013-14 to 20 million tons, and then to expand by another 5% in 2014-15 to 21 million tons. The projected accumulation of cotton stocks will weight on international cotton prices in 2014-15, particularly as more stocks will be held outside of China.

In the global exports of Textiles, India has improved its ranking to emerge as the second largest textile exporter. Currently, India textiles exports worth US$ 40.2 billion, while the total global textiles exports stand at US$ 772 billion, with India commanding 5.2% of the share. The rise in textile exports from India is largely attributed to the growth in apparel and clothing sector as this account for almost 43% of the share. The Indian textile and apparel industry has potential to reach at size US$ 221 billion by 2021.

Since most of the capacity expansions have taken place in normal/ commodity products, the severity of competition and decrease in profit margins is inevitable. Thus, in order to survive, sustain and thrive in the global market, it would be necessary to differentiate and improve presence in value added products in the near future. Further, Technical textile is expected to grow at a faster pace as compared to other textiles products. It would be prudent to be an early bird and earmark some investments for this area for better and sustainable profitability.

(b) Internal control systems & adequacy

Your Company has an adequate internal control system. There is a system of continuous Internal Audit which aims at ensuring effectiveness and efficiency of systems and operations. The internal audit is conducted by an independent Internal Audit Department leading by a qualified Chartered Accountant alongwith sufficient qualified & experienced staff. The report is reviewed by the Audit Committee of the Board consisting of Independent Directors. The scope of the Internal Audit is not limited to accounts only but includes operations, inventories, costing records, physical verifications of immovable and movable assets etc on regular basis. Further, the Company has also taken steps to develop a mechanism to assess and minimize risks by having a Risk Management Committee.

(c) Human resource management

Your Company gives utmost importance to human resource. It considers "Human Resource as Human Capital" and believes in the development of Human Resource. The Company strongly believes in the Performance Management System and always tries to explore and tap high potential at the Group level to meet new challenges and competition. Our main tool is training and developing talent at various levels. Internal and external trainings are regularly organized for the development of the employees. The Company is having strength of approximate 4,000 employees.

(d) Safety, Health & Environment

The Company''s top priority is safety, with regard to employment. It encourages safety measures at all operational levels, especially at floor level. Regular training programs are conducted to create awareness about the importance of safety at work. Medical camps are organized periodically for welfare of the members. Additionally, regular medical facilities are also provided to them.

(e) Management perception of Risks & Concerns

The performance of textile industry during first three quarters of FY 2013-14 was quite encouraging. However, the last quarter witnessed sudden jerks in demand and price drop from export market, led by china. This was followed immediately by domestic market which adversely affected the market sentiment and profit margins. The upward surge in cotton prices and downward turn in yarn prices along with slack demand is going to hit the bottom line significantly.

To procure cotton more judiciously and carry reasonable inventory by reducing to 2 months instead of previous practices of 6 months shall help minimizing the risk. Further, initiatives towards differentiated/ value added products coupled with cost optimization will lead to better managing the profit margins.

(f) Opportunities and Threats Opportunities:

* Government thrust for textile export.

* Scope for atomization.

* Large overseas and domestic market.

Threats:

* Shortage of skilled labour.

* Ever increasing cost of power & finance.

* Volatile Government policies particularly for raw material.

(g) Financial Performance

* Resource utilisation

a) Fixed assets

The gross fixed assets as at 31st March, 2014 were Rs. 57,057.28 lac as against Rs. 55,911.26 lac in the previous year. The Net block of assets as on 31st March, 2014 was Rs. 28,322.86 lac as against Rs. 29,473.51 lac in the previous year.

b) Current assets

Inventory levels as at 31st March, 2014 were Rs. 9,219.17 lac as against Rs. 5,099.47 lac in the previous year. The trade receivables as at 31st March, 2014 were Rs. 6,595.01 lac as against Rs. 5,670.41 lac in the previous year.

* Financial condition & liquidity

(Rs. lac) Particulars 2013-14 2012-13

Cash & cash equivalents:

Beginning of the year 2,703.33 483.50

End of the year 1,437.33 2,703.33 Net cash provided (used) by:

Operating Activities 6,166.37 7,152.79

Investing Activities (1,068.11) (59.53)

Financial Activities (6,364.26) (4,873.43)

4. Increase in Paid up Share Capital and amendment in Object Clause

During the year under review, paid-up share capital of the Company was increased from Rs. 17.84 crore to Rs. 19.82 crore by allotment of 19.75 lac equity shares of Rs. 10/- each at a premium of Rs. 47.52/- per share to M/s Alma Assets Consultancy Pvt Ltd, promoter/ promoter group company.

The object clause of the Company was amended by inserting new object clause for the commencement of activities/ business relating to real estate.

5. Expansion and Diversification

The Directors of the Company take pleasure to inform you that the spinning project at Nalagarh (HP), has been completed (40,800 spindles) after adding remaining 15,800 spindles.

The residential colony cum commercial project named as ''Vardhman Park'' carved out by the Company at 341 K-1, Mundian Khurd, Chandigarh Road, Ludhiana-141123, is at development stage for various infrastructural facilities.

6. Company Petition

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen GmbH, Austria (a shareholder in Oswal F.M. Hammerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956 in the Hon''ble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending for mentioning in the Hon''ble CLB.

7. Directors

During the year under review, Mr Amit Jain was appointed as director of the Company w.e.f. 06.05.2013 and Mr Ashok Kumar Goyal was appointed as an Executive Director of the Company for a period of three years w.e.f. 01.09.2013.

Mr. Ashok Kumar Goyal, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re appointment.

Pursuant to Section 149 of the Companies Act, 2013 ("the Act"), the Board at its meeting held on 30.05.2014 recommended appointment of Mr. Ajay Chaudhry, Dr. B. S. Bhatia, Mr. M. D. Kanitkar and Mr. Amit Jain as Independent Directors of the Company, not liable to retire by rotation, for a term of five years till 31st March, 2019, subject to approval of the Members of the Company. These Directors have given the declarations to the Board that they meet the criteria of Independence as provided under Section 149(6) of the Act and also confirmed that they will abide by the provisions as mentioned in Schedule IV of the Act. The Company has received requisite notices in writing from members proposing their appointment as Independent Directors.

8. Subsidiary Companies

The Company has three subsidiaries namely Oswal F.M. Hammerle Textiles Ltd, Oswal Industrial Enterprise Private Ltd. and F.M. Hammerle Verwaltungs GmbH, Austria. During the year, the Board of Directors periodically reviewed the affairs of the subsidiary companies. As per Section 212 of the Companies Act, 1956, the Company is required to attach the Balance Sheet, Statement of Profit & Loss and other documents of its subsidiary companies. The Ministry of Corporate Affairs (MCA) vide its Circular No. 2/2011 dated 8th February, 2011 has exempted the companies from applicability of Section 212 of the Companies Act, 1956, provided such companies publish audited consolidated financial statements in the Annual Report. The Company has published the audited consolidated financial statements for the financial year 2014 and the same forms part of this Annual Report. Accordingly, the Annual Report does not contain the financial statements of our subsidiaries. As per Section 212 of the Companies Act, 1956, the statements showing the interest of the holding company in the subsidiaries and highlighting the financial performance of subsidiaries are annexed with this Annual Report.

The audited financial statements of these subsidiaries and the related information will be made available to any Member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection at the Registered Office of the Company/its subsidiaries.

9. Listing of securities

The Securities of the Company are listed on National Stock Exchange of India Ltd (NSE) and Bombay Stock Exchange Ltd (BSE). Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

10. Registrar and Share Transfer Agent

M/s Alankit Assignments Ltd, 1E/13, Alankit Heights, Jhandewalan Extension, New Delhi -110 055 is the Registrar and Share Transfer Agent of the Company.

11. Fixed Deposit

During the year, the Company has not accepted the fixed deposits. As at 31st March, 2014, fixed deposits as invited earlier from the public were outstanding to the tune of Rs. 4.95 lac which were within the limits prescribed under Section 58A of Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975. There were no overdue deposits as on 31st March, 2014.

The Company proposes to invite and accept Fixed Deposits from the shareholders and the public in accordance with Sections 73 and 76 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules, 2014. Attention of the Members is invited to the relevant item in the Notice of the Annual General Meeting and the Explanatory Statement thereto.

12. Dividend

The Board of Directors of your Company has not recommended any dividend for the financial year 2013-14.

13. Corporate Governance

The Company has in place a comprehensive system of Corporate Governance. A report on Corporate Governance alongwith certificate from the auditors of the Company confirming compliance of the conditions as stipulated under Clause 49 of the Listing Agreement is given separately and forms part of this Annual Report.

14. Corporate Social Responsibility

Pursuant to Section 135 of the Companies Act, 2013 the Company has constituted the Corporate Social Responsibility (CSR) Committee of the Board of Directors. The terms of reference of the CSR Committee are as per the provisions of the Companies Act, 2013 read with rules made there under.

15. Auditors

M/s S.S. Kothari Mehta & Co, Chartered Accountants, New Delhi, who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting (AGM). It is proposed to re-appoint them as Statutory Auditors of the Company for a period of three years to hold office from the conclusion of this AGM till the conclusion of the 37th AGM to be held in the year 2017 subject to ratification of their appointment at every AGM. M/s S.S. Kothari Mehta & Co have, under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder furnished a certificate of their eligibility and consent for re-appointment.

16. Auditors'' Report

The Statutory Auditors of the Company have submitted Auditors'' Report on the Accounts of the Company for the financial year ended 31st March, 2014. In their report, they have made certain observations. The management reply/ comments on the same are as under:

a) Non creation of provision for write-off of investment in subsidiary companies namely M/s Oswal Industrial Enterprise (P) Limited (OIEPL) and Oswal F. M. Hammerle Textiles Limited (OFMH), has not been addressed by the Company:

We state that the said subsidiary companies i.e. OIEPL and OFMH have already started generating positive earnings and expected to improve its present financial position. The recovery in financial health of these companies could have been far better but for market unfavorable conditions including prolonged economic crises in USA/ Europe. However, the Companies are striving hard to turn around in the shortest possible time frame.

b) Improvement in the scope and coverage of Internal Audit:

We state that Internal Audit Department is headed by a qualified Chartered Accountant and supported by adequate qualified & experienced staff. The Internal Audit Department reviews the accounts/ accounting functions apart from systems, SOPs, risk factors, statutory compliances and physical verification movable and fixed assets periodically in all manufacturing units and other offices of the Company.

c) Regarding report on some delay in payment ESI and TDS:

We state that the delay was caused due to oversight. However, Internal Audit has been specifically assigned the responsibility to strengthen the system for statutory compliances.

d) Observation in respect to default in repayment of dues to financial institutions/banks and repayment of FCCB borrowings and premium due thereon:

We state that due to financial stress in the Company, the repayments to financial institutions/banks and FCCB payments were delayed to some extent.

Other points of Auditors'' Report on the accounts of the Company for the year under review are self-explanatory and require no comments.

17. Cost Auditor

M/s Ramanath Iyer & Co., Cost Accountants, 808, Pearls Business Park, Netaji Subhash Place, Delhi - 110 034, Delhi was appointed/re-appointed as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the Audit of cost records for the year 2013-14. The Cost Audit report for the financial year ended 31st March, 2013 was filed on 17th September, 2013 well within the prescribed due date of 30th September, 2013.

18. Statement of particulars of employees

Statement showing particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 is not given as no employee was in receipt of remuneration equal to or exceeding Rs. 60 lac per annum or Rs. 5 lac per month if employed for the part of the year.

19. Directors'' Responsibility Statement

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

i) In preparation of the annual accounts, applicable accounting standards have been followed;

ii) Appropriate accounting policies have been selected and applied consistently and have 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 as at 31st March, 2014 and of the profit of the Company for the year ended on 31st March, 2014;

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

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

20. Acknowledgement

Your directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

For and on behalf of the Board Sd/- Place : Ludhiana (Ashok Kumar Oswal) Dated : 30th May, 2014 Chairman & Managing Director

---

Mar 31, 2013

Dear Fellow,

The Directors of your Company are presenting their 33rd Annual Report on the affairs of the Company together with Audited Accounts of the Company for the year ended 31st March, 2013.

1. FINANCIAL RESULTS

The Financial Results for the year are as under:-

(Rs.in lac) PARTICULARS 2012-13 2011-12 Turnover 78,623.30 74,927.60

Profit/(Loss) before Interest, 9,183.14 (734.29)

Depreciation & Tax Finance Cost 6,028.24 6,771.95

Profit/(Loss) before Depreciation & Tax 3,154.90 (7,506.24)

Depreciation 3,660.07 2,959.69

Profit/(Loss) before Tax (505.17) (10,465.93)

Tax Expenses (622.23) (2,324.71)

Profit/(Loss) after Tax 117.06 (8,141.22)

Earnings Per Share (EPS)

- Basic and Diluted (in Rs.) 0.72 (50.12)

2. BUSINESS PERFORMANCE

Your Directors are pleased to report the Company''s business operations performance as follows:

- SALES REVENUE

During the year under review, the turnover of the Company was Rs. 78,623.30 lac as against Rs. 74,927.60 lac in 2011-12, registering a marginal increase of 4.93%. The FOB value of exports during the year increased to Rs. 30,294.91 lac from Rs. 28,552.59 lac in 2011-12, registering a growth of 6.10%.

- PROFITABILITY

During the year under review, the Company earned a profit before depreciation, interest and tax of Rs. 9,183.14 lac as against a loss of Rs. (734.29) lac during the previous year. The Company earned a net profit after tax of Rs. 117.06 lac during the current year against a loss of Rs. (8,141.22) lac in the previous year.

3. SHARE CAPITAL

During the year under review, paid-up share capital of the Company was increased from Rs. 16.24 crore to Rs. 17.84 crore by allotment of 16 lac equity shares of Rs. 10/- each at a premium of Rs. 55.67/- per share to M/s Alma Assets Consultancy (P) Ltd, promoter/ promoter group company.

The shareholders vide resolution dated 29.09.2012 approved the issue of 16 lac share warrants to four persons belonging to promoters/ promoter group. However, as per mutual understanding between the promoters and terms of resolution, the whole 16 lac share warrants were allotted to single promoter i.e. M/s Alma Assets Consultancy (P) Ltd.

5. COMPANY PETITION

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen GmbH, Austria (a shareholder in Oswal F.M. Hämmerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956 in the Hon''ble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending for mentioning in the Hon''ble CLB.

6. CORPORATE DEBTS RESTRUCTURING (CDR)

The Company has made reference to the CDR cell for its debt restructuring under CDR mechanism/scheme of Reserve Bank of

India. The scheme has been approved vide letter dated 28.12.2012. The implementation of the scheme is under process.

7. DIRECTORS

Mr. Ajay Chaudhry, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors has re-appointed Mr. Ashok Kumar Oswal as Chairman and Managing Director and Mr. Adish Oswal as Executive Director of the Company w.e.f 01.04.2012 for the period of three years.

8. SUBSIDIARY COMPANIES

The Company has three subsidiaries namely Oswal F.M. Hämmerle Textiles Ltd, F.M. Hämmerle Verwaltungs GmbH, Austria and Oswal Industrial Enterprise Private Ltd. As per Section 212 of the Companies Act, 1956, the statements showing the interest of the holding company in these subsidiaries are annexed with this Annual Report.

9. EXEMPTION UNDER SECTION 212 FOR SUBSIDIARIES

Ministry of Corporate Affairs (MCA) vide its Circular No. 2/2011 dated 8th February, 2011 has, subject to compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956 for attachment of Balance Sheet, Statement of Profit & Loss, Director''s Report and Auditor''s Report of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors of the Company has decided not to attach the aforesaid documents of the subsidiary companies with the Balance Sheet of the Company and complied the provisions of said Circular.

The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company/ its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiaries at the Registered Office of the Company/its subsidiaries.

Further, pursuant to the Listing Agreement with the Stock Exchanges and general exemption granted by the MCA, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies, which forms part of the Annual Report, has been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

10. LISTING OF SECURITIES

The Securities of the Company are listed on National Stock Exchange of India Ltd (NSE) and Bombay Stock Exchange Ltd (BSE). Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

11. REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Ltd, 2E/21, Alankit House, Jhandewalan Extension, New Delhi -110 055 is the Registrar and Share Transfer Agent of the Company.

12. FIXED DEPOSIT

As at 31st March, 2013, fixed deposits from the public were outstanding to the tune of Rs. 59.06 lacs which were within the limits prescribed under Section 58A of Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975. There were no overdue deposits as on 31st March, 2013.

13. DIVIDEND

The Board of Directors of your Company has not recommended any dividend for the financial year 2012-13.

14. CORPORATE GOVERNANCE

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the auditors of the Company regarding compliance of the conditions of Corporate

Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

15. AUDITORS

M/s S.S. Kothari Mehta & Co, Chartered Accountants, New Delhi, Auditors of the Company, retires at the conclusion of forthcoming Annual General Meeting and being eligible, offers themselves for reappointment.

16. AUDITORS'' REPORT

The Statutory Auditors of the Company have submitted Auditors'' Report on the Accounts of the Company for the financial year ended 31st March, 2013. In their report, they have made the certain observations. The management reply/comments on the same are as under:

a) Non creation of provision for write-off of investment in subsidiary company namely M/s Oswal Industrial Enterprise (P) Limited (OIEL), has not been addressed by the Company:

We state that the said subsidiary company OIEL has already started to generate positive earnings and expected to overcome from its present financial position. The Management has already taken some effective measures to revive its operations which should help the company to perform better in the next financial year and protect its net worth.

b) Improvement in the scope and coverage of Internal Audit:

We state that Internal Audit Department has already been restructured/ strengthened and is lead by a qualified Chartered Accountant alongwith sufficient qualified & experienced staff. The scope of the Internal Audit Department has been extended beyond the accounts and includes operations, inventories, costing records, physical verifications of immovable and movable assets etc on regular basis.

c) Regarding report on some delay in payment of work contract tax:

We state that it was an incidence caused due to clerical mistake and overlooking. Internal Audit has been assigned the responsibility to develop & strengthen the system for statutory compliances.

d) Observation in respect to default in repayment and interest payment of FCCB due on 19.02.2013:

We state that due to financial stress in the company it could not make the payment on time. However, negotiations with the FCCB holders are at advance stage and we expect that the same shall be resolved soon.

Other points of Auditors'' Report on the Accounts of the Company for the year under review are self-explanatory and require no comments.

17. COST AUDITORS

The Board of Directors has re-appointed M/s Ramanath Iyer & Co., Cost Accountants, 808, Pearls Business Park, Netaji Subhash Place,

Delhi – 110 034, as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 subject to the approval of Central Government for the year 2013-2014.

The Cost Audit report for the financial year ended 31st March, 2012 has been filed on time dated 11.01.2013. The due date was 28.02.2013 which was extended by MCA vide circular No. 2/2013 dated 31.01.2013.

18. STATEMENT OF PARTICULARS OF EMPLOYEES

Statement showing particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 is not given as no employee was in receipt of remuneration equal to or exceeding Rs. 60 lac per annum or Rs. 5 lac per month, if employed for the part of the year.

19. DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) In preparation of the annual accounts, applicable accounting standards have been followed;

ii) Appropriate accounting policies have been selected and applied consistently and have 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 as at 31st March, 2013 and of the profit of the Company for the year ended on 31st March, 2013;

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

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

20. ACKNOWLEDGEMENT

Your directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

For and on behalf of the Board

Sd/-

Place : Ludhiana (Ashok Kumar Oswal)

Dated: 30th May, 2013 Chairman & Managing Director

---

Mar 31, 2012

The Directors of your Company is presenting their 32nd Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2012.

1. FINANCIAL RESULTS

The Financial Results for the year are as under:-

(Rs. in lac)

PARTICULARS 2011-12 2010-11

Turnover 74,927.60 71,644.39

Profit/(Loss) before Interest, (730.55) 11,022.96

Depreciation & Tax

Finance Cost 6,771.95 4,705.97

Profit/(Loss) before Depreciation & Tax (7,502.50) 6,316.99

Depreciation 2,959.69 2,731.77

Profit/(Loss) before Tax (10,462.19) 3,585.22

Provision for Tax (2,320.97) 915.25

Profit/(Loss) after Tax (8,141.22) 2,669.97

Earnings Per Share - Basic and Diluted (in Rs.) (50.12) 20.02

2. PRESENTATION OF FINANCIAL STATEMENTS

Notification dated 28th February, 2011 issued by the Ministry of Corporate Affairs has stipulated a revised format for disclosure of financial statements under Schedule VI to the Companies Act, 1956. The financial results of the Company for the year ended 31st March, 2012 are, therefore, disclosed as per the Revised Schedule VI and the previous year's figures have been restated to align with the current year's presentation.

3. BUSINESS PERFORMANCE

Your Directors are pleased to report the Company's business operations performance as follows:

- SALES REVENUE

During the year under review, the turnover of the Company was Rs. 74,927.60 lacs as against Rs. 71,644.39 lacs in 2010-11, registering an increase of 4.59%. The FOB value of exports during the year increased to Rs. 28,552.59 lacs from Rs. 21,276.44 lacs in 2010-11, registering a growth of 34.20%.

- PROFITABILITY

During the year under review, the margins of the Company were under pressure. The Company incurred loss before depreciation and interest during the current year of Rs. (730.55) lacs against profit of Rs. 11,022.96 lacs during the previous year. The Company incurred net loss after tax to Rs. (8,141.22) lacs during the current year against profit of Rs. 2,669.97 lacs in the previous year.

5. STATUS OF EXPANSION AT NALAGARH

Directors of the Company take pleasure to inform you that during the year, the spinning project, which was undertaken by the Company with 40,800 spindles at Nalagarh, has been substantially completed. The commercial production of the same was started in the month of January, 2012 with about 25,000 spindles.

6. SHARE CAPITAL

During the year under review, the Authorised Share Capital of the Company was increased from Rs. 30 crore to Rs. 70 crore in two trenches.

7. COMPANY PETITION

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen Gesellschaft mbH, Austria (a shareholder in Oswal F.M. Hämmerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956 in the Hon'ble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending for the mentioning in the Hon'ble CLB.

8. CORPORATE DEBTS RESTRUCTURING (CDR)

The Company has made reference to the CDR cell for the its debt restructuring under CDR mechanism/ scheme of Reserve Bank of India.

9. DIRECTORS

Dr. B. S. Bhatia, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

The Board of Directors in its meeting held on 11.02.2012 has re-appointed Mr. Ashok Oswal as Chairman & Managing Director and Mr. Adish Oswal as Executive Director of the Company w.e.f 01.04.2012 for the period of three years, subject to the approval of shareholders.

10. SUBSIDIARY COMPANIES

The Company has three Subsidiaries namely Oswal F.M. Hämmerle Textiles Ltd, F.M. Hämmerle Verwaltungs GmbH, Austria and Oswal Industrial Enterprise Private Ltd. As per Section 212 of the Companies Act, 1956, the statements showing the interest of the holding company in these subsidiaries are annexed with this Annual Report.

11. EXEMPTION UNDER SECTION 212 FOR SUBSIDIARIES Ministry of Corporate Affairs vide its Circular No: 51/12/2007-CLIII

dated 8th February, 2011 has, subject to compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956 for attachment of Balance Sheet, P&L A/c, Director's Report and Auditor's Report of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors of the Company has decided not to attach the aforesaid documents of the subsidiary companies with the Balance Sheet of the Company and complied the provisions of the said Circular i.e. the Consolidated Financial Statement of the Company for the financial year ended 31st March, 2012 duly audited by Statutory Auditors is included in the Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company/ its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company/ its subsidiaries at the Registered Office of the Company/its subsidiaries.

Further, pursuant to the Listing Agreement with the Stock Exchanges and general exemption granted by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies, which forms part of the Annual Report, has been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

12. LISTING OF SECURITIES

The Securities of the Company are listed on the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

13. REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Limited, 2E/21, Alankit House, Jhandewalan Extension, New Delhi -110 055 is the Registrar and Share Transfer Agent of the Company.

14. FIXED DEPOSIT

During the year under review, the Company invited Fixed Deposits from the Public as per Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975. At the end of the year, fixed deposits from the public were outstanding to the tune of Rs. 61.61 lacs which were well within the limits prescribed under the above said section. There were no overdue deposits as on 31st March, 2012.

15. DIVIDEND

The Board of Directors of your Company has not recommended any dividend for the year 2011-12.

16. CORPORATE GOVERNANCE

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

17. AUDITORS

M/s S.S. Kothari Mehta & Co, Chartered Accountants, New Delhi, Auditors of the Company, retires at the conclusion of the forthcoming Annual General Meeting and being eligible, offers themselve for reappointment.

18. AUDITORS' REPORT

The Statutory Auditors of the Company have submitted the Auditors' Report on the Accounts of the Company for the year ended 31st March, 2012. In their report, they have made certain observations. One of the observation in respect to non creation of provision for write-off of investment in subsidiary company namely M/s Oswal Industrial Enterprises (P) Limited (OIEL),has not been addressed by the Company. We states that the said subsidiary company OIEL has started to generate positive earnings and expected to overcome from its financial position.

With respect to further observation for delayed payment of interest and principal of Banks during the year 2011-12 , we state that the textile industry presently in India is passing from difficult phase due to slow down of demand, high inventory cost, sharp fluctuation in the prices etc. The Company reported major net loss during the FY 2011-12 and is suffering from severe liquidity. The delay in Bank payments due to current year losses on account of fluctuations in cotton fibre and yarn prices, lesser cash accruals coupled with the repayment has put the company in the stretched liquidity position. Accordingly, the Company has filed an application to CDR for its debt restructuring.

Further, the utilization of short term funds to long term investment by the Company is only due to shifting of current maturities of term loan to current liabilities as per the requirement of Revised Schedule VI of the Companies Act, 1956.

The other points of Auditors' Report on the Accounts of the Company for the year under review are self-explanatory and require no comments. 19. COST AUDITORS

The Board of Directors re-appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors of the Company under Section 233-B of the Companies Act, 1956 subject to the approval of the Central Government for the year 2012-2013. As mandated by Circular No.15/2011 dated 11 April 2011 issued by the Ministry of Corporate Affairs, Government of India, full particulars of Cost Auditor are given below:-

Name M/s Ramanath Iyer & Co.,

Cost Accountants

Address BL-4 (Paschmi), Shalimar Bagh,

New Delhi - 110088 Details of Cost Audit Report for the financial year ended 31st March 2011

(a) Due date of filing 30th September, 2011

(b) Actual date of filing 21st & 24th September, 2011

20. STATEMENT OF PARTICULARS OF EMPLOYEES

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

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

Energy Conservation continues to be an area of major emphasis in your Company. Efforts are made to optimise energy costs while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per 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 annexed hereto and forms part of this report.

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

i.In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii.Appropriate accounting policies have been selected and applied consistently, and have 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 as at 31st March, 2012 and of the profit of the Company for the year ended on 31st March, 2012;

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

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

23. ACKNOWLEDGEMENT

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

For and on behalf of the Board

Sd/-

Place : Ludhiana (Ashok Oswal)

Dated: 30th May, 2012 Chairman & Managing Director

---

Mar 31, 2011

Dear Fellow,

The Directors of your Company have great pleasure in presenting their 31st Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2011.

1. FINANCIAL RESULTS

The Financial Results for the year are as under:-

(Rs. in lac)

PARTICULARS 2010-11 2009-10

Turnover 71,644.39 52,778.99

Profit before Depreciation, Interest,

Tax & Exceptional Items 10,553.38 6,686.20

Interest & Financial Charges 4,236.40 3,351.05

Profit before Depreciation,

Tax & Exceptional Items 6,316.98 3,335.15

Depreciation 2,731.76 2,830.50

Profit before Tax & Exceptional Items 3,585.22 504.65

Exceptional Items - 3,574.14

Profit before Tax & after Exceptional Items 3,585.22 (3069.49)

Provision for Tax

-Current 15.25 102.00

- Deferred 900.00 (932.67)

Profit after Tax & Exceptional Items 2,669.97 (2,238.82)

Appropriations:

Surplus carried to the Balance Sheet 263.56 (2,406.41)

Earnings Per Share

-Basic (in Rs.) 20.02 (20.31)

-Diluted (in Rs.) 20.02 (20.31)

2. BUSINESS PERFORMANCE

Directors are pleased to report the Company's business operations performance as follows:

- SALES REVENUE

During the year under review, the turnover of the Company was Rs. 7,1644.39 lac as against Rs. 52,778.99 lac in 2009-10, registering an increase of 35.74%. The FOB value of exports during the year increased to Rs. 21,276.44 lac from Rs. 15,070.89 lacs in 2009-10, registering a growth of 41.18%.

- PROFITABILITY

> The profit before depreciation, interest, exceptional items & tax increased by 57.84% to Rs. 10,553.38 lac during the current year from Rs. 6,686.20 lac in the previous year.

> The net profit after tax increased by 219.25% to Rs. 2,669.97 lac during the current year from a loss of Rs. (2238.82) lac in the previous year.

4. EXPANSION PROJECT

During the year under review, your Company undertook the expansion of a spinning project with 40,800 spindles at Nalagarh (H.P.). The project is likely to start production in the second quarter of financial year 2011-12.

5. SHARE CAPITAL AND FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

During the year under review, your Company issued an aggregate of 36,17,000 equity shares of Rs. 10/- each consisting of 13,20,000 equity shares upon conversion of convertible warrants to the financial investors belonging to the Promoter Group and 22,97,000 equity shares upon conversion of convertible warrants to the financial investors belonging to the Non-Promoter on a preferential basis at a premium pursuant to SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009. The proceeds from these preferential issues were used for the purpose of meeting long-term working capital requirements and future expansion projects of the Company.

Of the total issued Foreign Currency Convertible Bonds (FCCBs) of USD 12 million, the Company brought back the FCCBs, having a face value of USD 3.5 million at a discounted rate of 49.88% with a total outflow of USD 1.745 million with the approval of Reserve Bank of India.

6. COMPANY PETITION

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen Gesellschaft mbH, Austria (a shareholder in Oswal F.M. Hämmerle Textiles Ltd.) against the Company U/S 397, 398, 402 & 403 of the Companies Act, 1956 in the Hon'ble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending for the mentioning in the Hon'ble CLB.

7. DIRECTORS

Mr. M. D. Kanitkar, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

8. SUBSIDIARY COMPANIES

The Company has three Subsidiaries namely Oswal F.M. Hämmerle Textiles Ltd, F.M. Hämmerle Verwaltungs GmbH, Austria and Oswal Industrial Enterprise Private Ltd (Formerly known as Oswal Retail Private Ltd). As per Section 212 of the Companies Act, 1956, the statements showing the interest of the holding company in these subsidiaries and financial figures of subsidaries as per Circular No. 2/2011 dated 08.02.2011 are annexed with this annual report.

9. LISTING OF SECURITIES

The securities of the Company are listed on the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

10. REGISTRAR AND SHARE TRANSFER AGENT

M/s Alankit Assignments Limited, 2E/21, Alankit House, Jhandewalan Extension, New Delhi -110 055 is the Registrar and Share Transfer Agent of the Company.

11. FIXED DEPOSIT

During the year under review, the Company invited Fixed Deposits from the Public as per Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975. At the end of the year, fixed deposits from the public were outstanding to the tune of Rs. 68.01 lac which were well within the limits prescribed under the above said section. There were no overdue deposits as on 31st March, 2011.

12. DIVIDEND

The Board of Directors of your Company has not recommended any dividend for the year 2010-11, keeping in view the ongoing expansions, modifications and future investment possibilities, deciding to plough back the profit.

13. CORPORATE GOVERNANCE

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Agreement is annexed to the report on Corporate Governance.

14. AUDITORS

M/s S.S. Kothari Mehta & Co, Chartered Accountants, New Delhi, Auditors of the Company, retires at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

15. AUDITORS' REPORT

The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

16. COST AUDITORS

The Board of Directors re-appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors of the Company under Section 233-B of the Companies Act, 1956 subject to the approval of the Central Government for the year 2011-2012. The Cost Auditors' Report for the year 2009-10 was filed with the Central Government within a prescribed time period and will be forwarded to the Central Government for the subsequent year as required under law.

17. STATEMENT OF PARTICULARS OF EMPLOYEES

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

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

Energy Conservation continues to be an area of major emphasis in your Company. Efforts are made to optimise energy costs while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per 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 annexed hereto and forms part of this report.

19. DIRECTORS' RESPONSIBILITY STATEMENT

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

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. Appropriate accounting policies have been selected and applied consistently, and have 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 as at 31st March, 2011 and of the profit of the Company for the year ended on 31st March, 2011;

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

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

20. ACKNOWLEDGEMENT

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

For and on behalf of the Board

Sd/-

Place : Ludhiana (Ashok Oswal)

Dated: 14th May, 2011 Chairman & Managing Director

---

Mar 31, 2010

The Directors of your Company have great pleasure in presenting their 30th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2010.

1. FINANCIAL RESULTS:

The Financial Results for the year are as under: - (Rs. in lac)

PARTICULARS 2009-10 2008-09

Turnover 52769.35 42830.78

Profit before Depreciation, Interest, 6686.20 2616.01 Tax & Exceptional Items

Interest & Financial Charges 3351.05 3176.07

Profit before Depreciation, 3335.15 (560.06) Tax & Exceptional Items Depreciation 2830.50 2842.13

Profit before Tax & Exceptional Items 504.65 (3402.19)

Exceptional Items 3574.14 (2647.76)

Profit before Tax & after (3069.49) (754.43) Exceptional Items Provision for Tax

- Current 102.00 19.70

- Deferred (932.61) 18.63

- Fringe Benefit Tax — 16.65 Profit after Tax and Exceptional Items (2238.82) (772.15)

Appropriations:

Surplus carried to the Balance Sheet (2406.41) (167.59) Earnings per Share

- Basic (in Rs) (20.31) (7.27)

- Diluted (in Rs) (20.31) (7.27)

2. BUSINESS PERFORMANCE:

Your Directors are pleased to report performance of the business operations as follows:

SALES REVENUE:

During the year under review, the turnover of the Company is Rs.52769.35 lac as against Rs.42830.78 lac in 2008-09 registering an increase of 23.20%. The FOB value of exports has increased to Rs.15070.89 lac from 10269.95 lac showing a growth of 46.75%.

PROFITABILITY:

The Profit before depreciation, interest, exceptional items & tax is Rs. 6686.20 lac as compared to Rs. 2616.01 lac in the previous year. After providing for depreciation of Rs. 2830.50 lac (Previous Year Rs. 2842.13 lac), Exceptional Item of Rs. 3574.14 lac (Previous Year Rs. (2647.76) lac) and provision for taxation of Rs. (830.67) lac (Previous Year Rs (17.72) lac), there is a net profit of Rs. (2238.82) lac as compared to Rs. (772.15) lac in the previous year.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

(a) INDUSTRY STRUCTURE, DEVELOPMENT & FUTURE OUTLOOK

The Fiscal Year 2009-10 was a challenging year for the Indian Economy. In the first quarter, the economy came out of the Global downturn of FY09. Further, the GDP growth rate rose from 6.1 percent in first quarter of 2009-10 to 7.2 percent in the second quarter which itself showed the signs of recovery of the Indian Economy. Further in the Financial year under review, the Indian Textile Industry was struggling with low recovery in demand of clothing in the international market. The demand contraction and low consumer spending in the USA, the EC and Japan has decisively impacted the demand for imported textiles and clothing. Thus, during the first nine months of 2009-10, cotton yarn exports aggregated 309 million kgs valued at US $ 844 million which are 13% lower than the corresponding period of 2008-09.

The allocation of Rs. 2400 crore for Technology Up-gradation Funds Scheme (TUFS) in the Union Budget 2010-11 as against Rs. 3140 crore in the Fiscal Year 2009-10 would not suffice to clear the backlog of the TUFS disbursements. Further, the extension of interest subvention of 2% available for export credit upto 31st March, 2011 is only for few sectors and not to textile industry as a whole.

Conventional textiles profit margin is shrinking due to the rising raw material, labour, power and operating costs. The Indian Textile Industry should improve efficiencies to sustain profitabilities and also look for more value added products that give better profit margins with less operational costs. Amongst various options, opportunity for diversification lies in Technical Textiles as demand for them is increasing in India. It is projected that the technical textiles growth in India will be around 15 percent.

(b) INTERNAL CONTROL SYSTEMS & ADEQUACY:

The Company has adequate system of internal control. There is system of continuous Internal Audit which aims at ensuring effectiveness and efficiency of systems and operations. The internal audit is conducted by independent internal Audit Dept. and the report is reviewed by the Audit Committee of the Board consisting of independent Directors. Further, the Company has also taken steps to develop a mechanism to assess and minimize the risks by having a Risk Management Committee.

(c) HUMAN RESOURCE MANAGEMENT :

We at Oswal Group, give utmost importance to Human Resource. We consider "Human Resource as Human Capital". We believe in development of Human Resource. Human Resource department is flexible & believes in customization. Career Planning & Growth is on the top of our agenda, hence we customize career paths and retention plans according to the unique needs of the organization & individuals. We strongly believe on Performance Management System & always explore and tap high potential at Group level to meet the new challenges & competition. Our main tool is Training & Development of talent at various levels.

(d) MANAGEMENT PERCEPTION OF RISKS & CONCERNS :

The Cotton production in India during the year 2009-10 showed a marginal increase in the production of 292 lac

bales from 290 lac bales of 2008-09. However, the consumption of cotton is likely to rise by 8.3% in future in view of the expected increase in demand of textiles and clothing in the international market and India is expected to have larger share in the International Textile Industry. Therefore, availability of the cotton would be an area of concern for the textile mills in India. Hence, they will have to strategize cotton purchase proactively.

Moreover, the Textile Industry, particularly the conventional textile sector, requires vigorous efforts to adopt more aggressive marketing strategies, new products development and exploring the new markets. Apart from this, the industry needs to adopt energy efficient, environmentally sustainable practices and ensure compliance with international eco standards, if it has to compete and sustain itself in the global market, as issues relating to climate change and carbon emissions gather the growing attention of the consumers.

(e) FINANCIAL ANALYSIS:

RESOURCE UTILISATION:

a) Fixed Assets:

The gross fixed assets as at 31st March, 2010 were Rs. 43743.98 lac as against Rs. 44283.41 lac in the previous year. The Capital work-in-progress as on 31st March, 2010 was Rs. 669.92 lac.

b) Working Capital:

The net current assets as on 31st March, 2010 were Rs. 14279.21 lac as compared to Rs. 23617.10 lac in the previous year. Inventory level was Rs.7940.17 lac as against Rs. 8184.89 lac in the previous year. Debtors outstanding for more than six months were Rs. 854.05 lac as compared to Rs. 886.92 lac in the previous year.

FINANCIAL CONDITION & LIQUIDITY:

LIQUIDITY & CAPITAL RESOURCES

(Rs. in lac) 2009-10 2008-09

Cash & cash equivalents:

Beginning of the Year 163.83 1,971.12

End of the Year 1,147.40 163.83

Net cash provided (used) by:

Operating Activities 12,795.64 2,840.78

Investing Activities (3,054.23)(3,080.26)

Financial Activities (8,757.85)(1,567.81)

4 PREFERENTIAL ISSUE:

During the year under review, your Company has issued 25,00,000 Nos Convertible Warrants to the Financial Investors and 6,60,000 Nos Convertible Warrants to a Financial Investor belonging to the Promoter Group on preferential basis pursuant to SEBKIssue of Capital & Disclosure Requirements) Regulations, 2009. Out of 25,00,000 Convertible Warrants, 20,03,000 Warrants have been converted into Equity Shares of Rs. 10/- each at a premium of Rs. 29.53 per Share. The proceeds from these preferential issues have been used for the purpose of meeting the long term working capital requirements of the Company.

5. COMPANY PETITION:

A petition has been filed by M/s Maschinen Umwelttechnik Transportanlagen Gesellschaft mbH, Austria (a shareholder in Oswal F.M. Hammerle Textiles Ltd.) against the Company u/s 397, 398 402 & 403 of the Companies Act, 1956 in the Honble Company Law Board (CLB), Principal Bench, New Delhi. The said petition is pending for the mentioning in the Honble CLB.

6 DIRECTORS:

Mr. Ajay Chaudhry, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Further, the Board of Directors has appointed Mr. Adish Oswal as Director (Group Corporate Affairs & Business Development) of the Company during the year 2009- 10.

7. SUBSIDIARY COMPANIES:

The Company is having three Subsidiaries namely Oswal F.M. Hammerle Textiles Ltd., F.M. Hammerle Verwaltungs GmbH, Austria and Oswal Retail (P) Ltd. As per Section 212 of the Companies Act, 1956, a statement showing the interest of the holding Company in these Subsidiaries is annexed with this Annual Report.

8. LISTING OF SECURITIES:

The securities of the Company are listed on National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. Further, Foreign Currency Convertible Bonds (FCCBs) of the Company are listed at Singapore Exchange Securities Trading Ltd.

9. REGISTRAR AND SHARE TRANSFER AGENT:

M/s Alankit Assignments Limited, 2E/21, Alankit House, Jhandewalan Extension, New Delhi-110 055 is the Registrar and Share Transfer Agent of the Company.

10. DIVIDEND:

In view of the current financial results, the Board of Directors of your Company has not recommended any dividend for the year 2009-10.

11. CORPORATE GOVERNANCE:

The Company has in place a comprehensive system of Corporate Governance. A separate report on Corporate Governance forms part of the Annual Report of the Company. The Company has implemented the amended Clause 49 of the Listing Agreement. A certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Agreement is annexed to the report on Corporate Governance.

12. AUDITORS:

M/s S.S. Kothari Mehta & Co, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

13. AUDITORS REPORT:

The Auditors Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

14. COST AUDITORS:

The Board of Directors have re-appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors of the Company under Section 233-B of the Companies Act, 1956 subject to the approval of the Central Government for the year 2010- 2011. The Cost Auditors Report will be forwarded to the Central Government as required under law.

15. STATEMENT OF PARTICULARS OF EMPLOYEES:

A Statement of Particulars of employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

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

Energy Conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 21 7(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors ) Rules, 1988, are annexed hereto and form part of this report.

17. DIRECTORS RESPONSIBILITY STATEMENT:

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. appropriate accounting policies have been selected and applied consistently, and have 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 as at 31st March, 2010 and of the profit of the Company for the year ended on 31st March, 2010;

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

iv. the annual accounts have been prepared on a-going concern basis.

18. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to record their appreciation of the valuable contribution made by the employees in the successful operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD (ASHOK OSWAL) Place : Ludhiana CHAIRMAN & Dated : 8th May, 2010 MANAGING DIRECTOR