Directors Report of Winsome Yarns Ltd.

Mar 31, 2024

The Resolution Professional/Suspended Board of Directors present the 34th Annual Report and the Financial Statements of the Company for the year ended 31st March, 2024.

INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

The Hon’ble Adjudicating Authority, i.e., National Company Law Tribunal, Chandigarh Bench, has admitted the Company Petition i.e. C.P (IB) No. 291/Chd/Chd/2018, filed by M/s. Edelweiss Asset Reconstruction Company Limited, the Financial Creditor initiating Corporate Insolvency Resolution Process (“CIRP”) vide order dated 22.12.2023 under Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as “Code”) in the matter of M/s. Winsome Yarns Ltd. (“Corporate Debtor”). The Adjudicating Authority vide the said Order appointed Mr. Sanjay Gupta having Registration No. IBBI/IPA-002/IP-N00982-C01/2017-2018/10354 as Interim Resolution Professional (IRP).r dated 22.12.2023.

The Committee of Creditors in its meeting held on 23.01.2024 approved the appointment of M/s. ARCK Resolution Professionals LLP, having Registration No. IBBI/IPE-0030/IPA-1/2022-23/50013 as Resolution Professional (“RP”) thereby replacing Mr. Sanjay Gupta. Thereupon an application was filed by the CoC, before Hon’ble NCLT, for the appointment of M/s. ARCK Resolution Professionals LLP as Resolution Professional in the captioned matter. Subsequently, the Hon’ble NCLT allowed the application and appointed M/s. ARCK Resolution Professionals LLP as Resolution Professional in this matter vide its Order dated 14.03.2024.

The Company is under the Corporate Insolvency Resolution Process.

A summary of the financial results is given below.

SUMMARISED FINANCIAL RESULTS:		(Rs. in lakhs)
INCOME	Year ended	Year ended
	31.03.2024	31.03.2023
Revenue from operations	2542.58	3093.37
Other income	463.07	470.70
Total Income	3005.66	3564.07
EXPENSES
Cost of material consumed	517.94	755.54
Purchase of stock-in-trade	--	--
Excise duty	--	--
Change in inventories of finished goods, work in process and stock in trade	152.86	411.22
Employees benefit expenses	1114.20	1606.54
Finance costs	--	--
Depreciation and amortisation	1148.68	1387.32
Other expenses	1166.21	2045.30
Total Expense	4099.89	6205.92
Profit/ (Loss) before exceptional items and tax	(1094.24)	(2641.85)
Less: Exceptional items	--	--
Profit/ (Loss) before tax	(1094.24)	(2641.85)
Less/(-Add): Tax expense	--	--
Current tax	--	--
Deferred tax	--	--
Profit/ (Loss) after tax	(1094.24)	(2641.85)
Other comprehensive income	--	--
Total Comprehensive Income	(1094.24)	(2641.85)

The Company’s business of Yarn Spinning has been continuing on job work basis. The initiation of CIRP from 22nd December, 2023, effected the marketability of Company’s products and the Knitwear business has also been mainly carried out on job-work basis for third parties, which is continuing to the extent possible within limited resources available with the Company.

A detailed review of the operations of the Company for the Financial Year ended 31st March, 2024,is given below which forms as part of this report.

STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER INSOLVENCY AND BANKRUPTCY CODE 2016 (IBC) AFTER INITIATION:

The Corporate Insolvency Resolution Process (“CIRP”) in the case of Winsome Yarns Limited (“Company/ Corporate Debtor”) was initiated the Hon''ble National Company Law Tribunal, Chandigarh Bench (“Adjudicating Authority”) under Section 7 of the IB Code vide its order dated 22nd December 2023. The Adjudicating Authority vide the order of the same date appointed Mr. Sanjay Gupta having Registration No. IBBI/IPA-002/IP-N00982-C01 /2017-2018/10354 as the Interim Resolution Professional (“IRP”) to conduct the CIRP of the Corporate Debtor. Later, in the CoC Meeting of the Corporate Debtor held on 23 ^rd January, 2024, M/s. ARCK Resolution Professionals LLP, having Registration No. IBBI/IPE-0030/IPA-1/2022-23/50013 was appointed as the Resolution Professional (“RP”) to run the CIRP of the Corporate Debtor.

Interim Resolution Professional had issued invitation for Expression of Interest (hereinafter referred as ‘’EOI’’) in FORM G on February 20, 2024 in compliance with Regulation 36A of CIRP Regulations, 2016 in the newspaper in English language for the submission of a resolution plan in accordance with the provision of the code.

As per the published FORM G, the last date for submission of EOI was stipulated as March 5, 2024, and last date stipulated for submission of resolution plan was April 20, 2024 which was later on extended till 31.03.2024.

The Resolution Professional received three Resolution plans which were duly opened in presence of the COC Members in its 6th COC Meeting. Due discussion and negotiation on all three resolutions plans were conducted by the COC. The members of the COC in its COC Meeting decided that another FORM G be published for exploring more potential bidders and for wealth maximization to all Stakeholders.

Thereafter, Resolution Professional had re-published invitation for Expression of Interest (hereinafter referred as ‘’EOI’’) in FORM G on July 18, 2024 in compliance with Regulation 36A of CIRP Regulations, 2016 in the newspaper in English and Vernacular (Punjabi) language for the submission of a resolution plan in accordance with the provision of the code.

As per the published FORM G, the last date for submission of EOI was stipulated as August 2, 2024 through Email and August 3, 2024 original in physical form at the office of the RP, and last date stipulated for submission of resolution plan was September 12, 2024, which was later on extended till 28.09.2024.

The Resolution Professional received four Resolution plans which were duly opened in presence of the COC Members in its 15th COC Meeting. The members of the COC duly discussed and negotiated in terms and clauses of the Resolution Plans including the financial bid and thereafter decided to go for inter-se bidding for challenge mechanism. Pursuant to inter se bidding convened on 22.10.2024, final Resolution Plans were submitted by all 4 RAs. All 4 compliant Resolution Plans have duly been placed to e-voting before the members of the COC for their approval.

A One-time settlement (OTS) proposal letter under section 12A of the Code has also been submitted by the promoters. However, as per the requirement laid down in Section 12 A read with Regulation 30 A, FORM FA along with requisite Bank Guarantee was not submitted by the Applicant, EARC to the Resolution Professional.

In terms of Section 17 of the Code, on commencement of the Corporate Insolvency Resolution Process (CIRP), the powers of the Board of Directors of Winsome Yarns Limited stands suspended and the same are being exercised by Mr. Anil Kohli, Partner of M/s. ARCK Resolution Professionals LLP, Resolution Professional. The management of the affairs of Winsome Yarns Limited is vested with Mr. Anil Kohli, Partner of M/s. ARCK Resolution Professionals LLP.

OPERATIONS & PERFORMANCE:

During the year under review, the Company''s operations continued to be affected due to lack of sufficient working capital funds required for operations resulting in lower capacity utilization and the gross margins have suffered due to high input costs. Furthermore, the constraints of funds have affected Company’s plans to undertake de-bottlenecking and regular capital expenditure as per industry norms, which are needed for proper maintenance and upkeep of its plant, machinery and equipment.

During the year ended 31.03.2024, the Company incurred a loss of Rs. 1094.24 lakhs in comparison to the loss of Rs. 2641.85 lakhs during the previous year ended 31.03.2023. Your Company''s turnover of Rs. 2542.58 lakhs were marginally low against the previous year turnover of Rs. 3093.37 lakhs for the aforementioned reasons. The Company has since undertaken manufacturing for third parties on job work basis and is able to recover variable costs and part of fixed costs.

As per report of overseas investment manager, the remaining amount out of GDR issued earlier by the Company in 2011, then invested in Units of market instruments had lost value after the crisis due to covid and wars as the underlying investments eroded to NAV of NIL, and the Units were thereafter discarded.

The Company’s dealings with a vendor who had supported the Company’s operations over 5 years by providing raw materials and sales arrangements for finished goods, got into dispute, and on settlement reached in 2019 the vendor waived its claims and continued providing business support and the vendor availed the option to purchase 48 bigha 11 biswas of agricultural land of the Company at fair market value assessed by approved valuer, which sale was concluded during the financial year.

CLAIMS AGAINST THE COMPANY:

EARC has claimed that it is an assignee of debt recoverable by certain banks from the Company, and the Company has a counter claim against the claimants for the losses caused by them to the Company which are pending adjudication before the Hon’ble debt Recovery Tribunal.

The actions of the Banks and EARC, amongst others, for recovery from the Company and the petitions filed by them to initiate insolvency against the Company, though disputed by the Company, amongst other, for reasons of being barred by limitation, the Company had without prejudice to its rights in the matter and without acknowledging its liability, had initiated discussions with claimants to settle the disputes, which had failed.

The Financial Commissioner of the State of Punjab had determined that the Agreements for Assignment of debt by certain lenders to the Company in favour of EARC are insufficiently stamped, and therefore, defective. A demand of Rs. 4.46 crores (interest and penalty not applied as yet) was raised against EARC.

A writ petition filed by EARC before the Hon’ble Punjab and Haryana High Court at Chandigarh against the proceedings initiated by the Financial Commissioner was allowed.

The State of Punjab and the Company have filed Letters Patent Appeal (LPA) against the order of the Single Judge Bench of the Hon’ble Punjab and Haryana High Court, which is being heard.

EARC acting in the matter as assignee of debt by certain banks in case wherein the State of Punjab has held stamp duty to have been unpaid, had Petitioned the Hon’ble NCLT to initiate insolvency proceedings against the Company, which was dismissed by the Hon’ble NCLT vide its order dated 17th March 2020 as the assignment deed was held as unenforceable.

In an appeal filed by EARC against the order of the Hon’ble NCLT, the Hon’ble NCLAT vide order dated 21 Jul 2022 has set aside the order of the Hon’ble NCLT and remanded the matter to the Hon’ble NCLT for rehearing and without touching the merits of the case and permitting the parties to take all arguments before the Hon’ble NCLT. The Hon''ble NCLT vide its Order dated 22nd December 2023, appointed Mr. Sanjay Gupta as an Interim Resolution Professional (IRP), who took over control of management and affairs of the Company. The NCLT, Chandigarh Bench, vide its Order dated 14.03.2024, appointed M/s. ARCK Resolution Professionals LLP having IBBI Registration No. IBBI/IPE-0030/IPA-1/2022-23/50013, as the Resolution Professiona lto conduct CIRP of the Company, and the powers of the Board of Directors of the Company, earlier suspended on commencement of CIRP, are now vested with the RP. In the event of a Resolution Plan, if one is received and is found compliant with the laws, is approved by the Committee of Creditors and the Authorities, the insolvency of the Company may stand resolved, which resolution may also include reliefs, concessions and waivers from creditors of the Company, and the Company will remain a Going Concern; failure of the aforementioned resolution process will lead to liquidation of the Company.

The resolution of disputes was initiated by the Company without prejudice to its rights in the matter, and though the Company did not consider itself liable to the claimants, the financial statements of the Company have been prepared on ‘Going Concern’ basis.

MSME REGISTRATION:

The Company is registered with Ministry of Micro, Small and Medium Enterprises, Government of India as ''Medium Enterprise'' w.e.f. 18.07.2020 vide Udyam Registration No. UDYAM-CH-01-0000261.

TRADING OF EQUITY SHARES OF THE COMPANY:

The equity shares of the Company are traded on BSE Limited (under Scrip Code 514348) and National Stock Exchange of India (under Symbol ‘WINSOME’).

SUBSIDIARY COMPANIES/ JOINT VENTURES/ ASSOCIATES:

There are no Subsidiary Companies/ Joint Ventures/ Associates of the Company.

DIVIDEND AND TRANSFER TO RESERVE:

In view of losses incurred during the period under review, the Company does not recommend any dividend on the equity shares for the financial year ended as on March 31, 2024.

During the year under review, the Company has made no transfer to reserves.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review detailing economic scenario and outlook, as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (“SEBI LODR Regulations”) is presented in a separate section and forms integral part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is not required to undertake any activities under the CSR as per section 135 of the Companies Act, 2013 as it does not meet applicable criteria as defined in section 135(1) of the Act and hence there is no CSR Committee constituted.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

The Company is not fall under Regulation 34(2)(f) of the SEBI (LODR), Regulations, 2015, hence there is no need to annex the Business Responsibility and Sustainability Report to the Annual Report.

COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013.

SHARE CAPITAL:

During the financial year 2023-24, there was no change in the Share Capital of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

(a) Shri Manish Bagrodia, is Managing Director of the Company. Furthermore, the tenure of Mr. Manish Bagrodia, as Managing Director of the Company were completed on June 30, 2024. Accordingly, w.e.f. 1^st July, 2024 Mr. Manish Bagrodia, continued as Non-Executive and Non-Independent Director of your Company, liable to retire by rotation and being eligible, offers himself for re-election.

(b) Mrs. Mridula Goyal is Non-Executive, Non-Independent Director has resigned from the Directorship of the Company w.e.f. 02.10.2024 due to citing health reasons. The said resignation letter is not accepted by the Resolution Professional and requested to revoke the intimation being filed by her to the concerned authorities. It is pertinent to mention here that requisite application has been filed before Hon’ble NCLT to bring on record the non-acceptance of resignation by Resolution Professional.

(c) Shri Rajiv Chadha and Shri Pankaj Mahajan are Non-Executive, Independent Director and not liable to retire by rotation.

(d) Ms. Anupma Kashyap was appointed as Additional Director in the capacity of Independent Director of the Company on 22.05.2023 and resigned from the directorship w.e.f. 22.12.2023.

(e) The tenure of five years of Shri Tilak Raj Dembla as Independent Director has been completed on 13th September, 2024. Accordingly, Mr. Tilak Raj Dembla (DIN:02605451) ceased to be independent director of the company w.e.f closure of business hour of 13th September, 2024.

(f) As per available information Ms. Neha Singhal, Company Secretary and Compliance officer of the Company has resigned from the company w.e.f. 22.12.2023. Pursuant to which, it has become difficult to appoint another CS as the company is under CIRP and professionals are reluctant to join a company under CIRP.

In view of the order of the Hon’ble National Company Law Tribunal, dated December 22, 2023, the powers of the Board of Directors of the Company stood suspended and such powers are vested with the Resolution Professional.

DECLARATION/ DISCLOSURES BY DIRECTORS:

The Directors have made the requisite declaration/ disclosures under the provisions of Companies Act, 2013 and under the regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. None of the Directors are disqualified under the provisions of Section 164(2) of the Companies Act, 2013.

PERFORMANCE EVALUATION OF BOARD:

The Company having been admitted under CIRP under Section 7 of the Code w.e.f 22.12.2023, and the powers of the Board of Directors of the Company having been suspended as per Section 17 of the Code and the same are now exercisable by the Resolution Professional, there is no evaluation of Board of Directors of the Company carried out during the year under review.

NO. OF BOARD MEETINGS:

During the period under review, falling prior to the commencement of CIRP, the Board of Directors met five times. The details regarding the attendance and the date of Board Meetings are provided in the "Corporate Governance Report". After the Commencement of CIRP, the role and responsibilities of the Board of

Directors are being fulfilled by the Resolution Professional in accordance with sections 17 and 23 of IBC 2016 and powers of the Board of Directors are suspended. Hence, no meetings of the Directors were held after the Commencement of CIRP, i.e., December 22, 2023.

CREDITORS MEETING:

Creditors’ Meetings (CoC) were conducted during the course of the financial year after commencement of CIRP and matters relevant to IBC Proceedings and revival plans were duly placed before the meetings, amongst all other items that required confirmation from Creditors.

INDEPENDENT DIRECTORS'' DECLARATION:

As specified above that w.e.f December 22, 2023 the Company has been admitted to CIRP under Section 7 of the Code. Thereafter, in accordance with Section 17 of the Code, the powers of the Board stood suspended and be exercised by the Interim Resolution Professional until replaced by Resolution Professional. Accordingly, the Company does not have the necessary declaration, for period under review, from the Independent Director as required in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 read with Clause 16(1)(b) and 25 of the Listing Regulations, 2015.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

On appointment, a Letter of Appointment is issued to the Independent Directors setting out in details, the terms of appointment, duties, responsibilities and expected time commitments. The Independent Director on being inducted on the Board, is familiarised by way of programme with their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, interaction with the senior management which in turn will help them to understand business model of the Company, its process, products etc. It also includes visit to different plants, as & when required, to providing them thorough insight in to business operations. The Company follow such approach for familiarisation not only for Independent Directors but any new appointee on the Board, whenever required. To enhance their knowledge and skills, Directors are regularly updated about recent changes/ developments in law, policies, regulations etc. The details of familiarisation programmes are available on the following weblink of the Company''s website: :

https://www.winsomeyarns.com/ files/ugd/199b2d 7988df291e814459829db83f4be8b893.pdf During the period one Familiarization programme was conducted on 29.05.2023.

AUDITORS:

Pursuant to Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company in its 33rd Annual General Meeting held on 29th September, 2023 approved the reappointment of M/s. Dhana and Associates (Formerly known as M/s. Khandelia and Sharma), Chartered Accountants (Firm Registration Number: 510525C) as the Statutory Auditors of the Company for a further period of five consecutive years (second term) from the conclusion of 33rd Annual General Meeting till the conclusion of 38th Annual General Meeting of the Company.

Further, as per the notification dated 7th May 2018, issued by Ministry of Corporate Affairs, the appointment of Statutory Auditors, is no more required to be ratified by members of the Company in every Annual General Meeting.

AUDITORS'' REPORT:

M/s. Dhana & Associates (Erstwhile- Khandelia and Sharma), Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the financial year ended March 31, 2024. The statement on the Impact of Audit Qualifications of Financials have been given after the Independent Auditor’s Report.

THE EXPLANATION/ COMMENTS OF THE BOARD ON QUALIFICATION/ RESERVATION OR ADVERSE REMARKS GIVEN BY AUDITORS IN ITS REPORT FOR THE FINANCIAL YEAR 2023-24:

Explanation of management on the audit qualifications contained in the Auditors'' Report are given in the statement of impacts of audit qualifications of the financials.

COST AUDITORS:

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Company appointed M/s Vijay Kumar Mishra & Associates; Cost Accountant, as the Auditor of the Cost records of the Company for the year ending 31st March, 2025. Further, as specified above, as the powers of the board stood suspended and be exercised by the Interim Resolution Professional until replaced by Resolution Professional. The Committee of Creditors also approved the appointment of M/s Vijay Kumar Mishra & Associates, Cost Accountant, as the cost auditors of the Company for the year ending 31st March, 2025, at a remuneration, subject to approval and ratification by the shareholders, of Rs. 29,000 (Rupees Twenty-Nine Thousand Only) plus Taxes Plus out of pocket expenses.

The cost audit report of M/s Vijay Kumar Mishra & Associates, Cost Accountant, for the financial year 2023-24 does not contains any adverse qualification or remarks.

COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of various activities are required to be audited. The same had been audited by the Cost Auditor of the Company. The Board of Directors in their meeting held on 8.11.2023, vide Resolution No. 191.14(2), had approved the Cost Audit Report for the financial year 2022-23, and thereafter the cost audit report for the financial year 2022-23 had been filed with ROC on 24.11.2023 vide SRN-F83128132.

PUBLIC DEPOSIT:

During the year, the Company has not accepted any deposits from the public and as such. There are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

SHARE REGISTRATION ACTIVITY:

The Company has appointed “LINK INTIME INDIA PRIVATE LIMITED” a category-I Registrar and Share Transfer Agent reregistered with Securities and Exchange Board of India (SEBI) to handle the work related to Share Registry.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees given, security provided and investments made during the year as per Section 186 of the Companies Act, 2013 form part of the notes and schedules of the Financial Statements provided in this Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, in the preparation of annual accounts for the year ended on 31^st March, 2024, and state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

KEY MANAGERIAL PERSONNEL:

Mr. Sanjay Sharma, Chief Financial Officer, is the Key Managerial Personnel of the Company.

CORPORATE GOVERNANCE:

A separate report on ''Corporate Governance'' is enclosed as a part of this Annual Report. The certificates from the Secretarial Auditor of the Company regarding compliance with Corporate Governance norms stipulated under the regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are annexed to the Report on Corporate Governance.

AUDIT COMMITTEE:

During the period under review but prior to the commencement of the CIRP, the Audit Committee met three times. The details regarding the composition, attendance and the date of Audit Committee are provided in the "Corporate Governance Report". After the Commencement of CIRP the role and responsibilities of the Board of Directors are being fulfilled by the Resolution Professional in accordance with sections 17 and 23 of IBC Code and powers of the Board of Directors are suspended. Hence, no meetings of the Audit Committee were held after the Commencement of CIRP, i.e., December 22, 2023.

NOMINATION AND REMUNERATION COMMITTEE:

During the period under review but prior to the commencement of the CIRP, the Nomination & Remuneration Committee met once. The details regarding the composition, attendance and the date of Nomination and Remuneration Committee are provided in the "Corporate Governance Report". After the Commencement of CIRP the role and responsibilities of the Board of Directors are being fulfilled by the Resolution Professional in accordance with sections 17 and 23 of IBC Code and powers of the Board of Directors are suspended. Hence, no meetings of the Nomination & Remuneration Committee were held after the Commencement of CIRP i.e. December 22, 2023.

The Committee formulated Remuneration Policy which is attached as ANNEXURE ‘A’ and forms a part of this Report of the Directors.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the period under review but prior to the commencement of the CIRP, the Stakeholders Relationship Committee met three times. The details regarding the composition, attendance and the date of Stakeholders Relationship Committee are provided in the "Corporate Governance Report". After the Commencement of CIRP the role and responsibilities of the Board of Directors are being fulfilled by the Resolution Professional in accordance with sections 17 and 23 of IBC Code and powers of the Board of Directors are suspended. Hence, no meetings of the Stakeholders Relationship Committee were held after the Commencement of CIRP i.e. December 22, 2023.

RISK MANAGEMENT COMMITTEE:

During the period under review but prior to the commencement of the CIRP, the Risk Management Committee met two times. The details regarding the composition, attendance and the date of Risk Management Committee are provided in the "Corporate Governance Report". After the Commencement of CIRP the role and responsibilities of the Board of Directors are being fulfilled by the Resolution Professional in accordance with sections 17 and 23 of IBC Code and powers of the Board of Directors are suspended. Hence, no meetings of the Risk Management Committee were held after the Commencement of CIRP i.e. December 22, 2023.

SEXUAL HARASSMENT COMMITTEE:

As required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has already constituted the Internal Complaint Committees at all the work places of the Company. The composition of the Committee and contact numbers of the persons to be approached have been uploaded on the website of the company i.e. www.winsomeyarns.com and has been properly displaced on the Notice Boards at all the premises of the Company, including works and head office.

The Committees have been regularly addressing the staff/ workers, particularly the female staff/ workers to make them aware about their rights under the Act and as to how and to whom the complaint, if any can be lodged.

The details of the sexual harassment cases received, disposed of and pending are given below:-

Number of Sexual Harassment Cases pending in the beginning of the Financial Year i.e. 01.04.2023	Number of Sexual Harassment cases received during the Financial year 202324	Number of Sexual Harassment cases disposed off during the Financial year 2023-24	Number of Sexual Harassment cases pending at the end of Financial year 2023-24
NIL	NIL	NIL	NIL

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to the provision of section 177(9) of the Companies Act, 2013, and as required under the provisions of regulations of the Listing Regulation, 2015, the Company has adopted the ‘Whistle Blower Policy‘ and authorized to the Audit Committee of the Board to look after all the matters relating to Whistle Blower Policy and to submit its report to Board at regular intervals, on the receipt of any concerned matter, for any appropriate action. The details of the vigil mechanism Policy/ Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company. It can be accessed on www.winsomeyarns.com

RELATED PARTY TRANSACTIONS:

All transactions entered into with related parties as defined under the Companies Act, 2013, and under the regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the financial year were in the ordinary course of business and on an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant related party transactions with the Company’s Promoters, Directors Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its review/approval under omnibus approved route. There was no material contract or arrangement or transactions with Related Party during the year. Thus, disclosure in form AOC-2 is not required. Suitable disclosure as required by the Accounting Standard has been made in the notes to the Financial Statements.

Related Party Transactions upto the date of commencement of CIRP were placed before the Audit Committee and Board of the Company. Prior omnibus approval of the Audit Committee and Board is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions was placed before the Audit Committee and Board for their approval on a quarterly basis..

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website (www.winsomeyarns.com). None of the Directors have had any pecuniary relationship or transactions with the Company.

LISTING OF SHARES:

The Equity Shares of your Company are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Listing fee for the financial year 2024-25 has been paid to BSE and NSE.

SIGNIFICANT AND MATERIAL ORDER:

The same is provided and explained under the heading of status of corporate insolvency resolution process under insolvency and bankruptcy code 2016 (IBC) after initiation.

RATINGS, AWARDS, ACHIEVEMENTS & RECOGNITIONS:

The data pertaining to the Credit Rating, awards, achievements is not available.

INTERNAL FINANCIAL CONTROLS:

The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

MINI HYDRO POWER PROJECTS:

There are five mini hydro power projects of the Company situated at Sidhwan Canal, Distt. Ludhiana, Punjab. The details of the same are as under:

Site Name in State of Punjab	Date of Commissioning	Installed Generated Capacity
Barewal	Commissioned on 12th June, 2010	900 KW
Bharowal	Commissioned on 12th January, 2013	750 KW
Isewal	Commissioned on 15th July, 2011	900 KW
Mansian	Commissioned on 22nd Sep., 2010	500 KW
Raowal	Commissioned on 29th August, 2011	850 KW

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(3) of The Companies (Accounts) Rules, 2014, is annexed as ANNEXURE ‘B’.

ENERGY SAVING INITIATIVES:

The Company is continually making its best efforts to save the energy consumption.

ENVIRONMENT AND POLLUTION CONTROL:

Top priority continues to be given to preservation of the environment by all the units of the Company. To combat pollution and strengthen the area ecology, considerable emphasis is placed on plantation of fragrant and shady trees. We are cautious of preserving water through recycling and rainwater harvesting to the extent possible. All manufacturing facilities possess the required environmental clearance from the respective Pollution Control Boards and do comply with the relevant legislation.

The Company is well aware of its responsibility towards a better and clean environment. Our efforts in environment management go well beyond mere compliance with statutory requirements. The Company has always maintained harmony with nature by adopting eco-friendly technologies and upgrading the same from time to time incidental to its growth programs.

PARTICULARS OF EMPLOYEES:

The prescribed particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as ANNEXURE ‘C’ and forms a part of this Report of the Directors.

EXTRACT OF ANNUAL RETURN:

The annual return of the company will be available on the Company''s website www.winsomeyarns.com. SECRETARIAL AUDIT:

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 Girish Madan & Associates, a firm of Company Secretaries in practice (C.P. No. 3577) to undertake the Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report (MR-3) for the financial year ended 31st March, 2024, is annexed as ANNEXURE ''D'' to this Report.

WEBSITE:

Pursuant to the provisions of Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is maintaining a website i.e. www.winsomeyarns.com.

CASH FLOW ANALYSIS:

In conformity with the provisions of regulations of Listing Regulations, the Cash Flow Statement for the financial year is annexed with financial statements.

INSURANCE:

The properties of the Company have been adequately insured against fire, flood, earthquake and explosive risks etc.

ACKNOWLEDGEMENTS:

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

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Mar 31, 2015

Dear Members,

We are pleased to present the 25th Annual Report of the Company and the audited statement of accounts for the year ended 31st March, 2015. A summary of the financial results is given below. The performance of the Company during the year has been adversely affected due to higher input costs on the one hand and pressure on selling prices on the other, because of demand recession. Labour relations at all the plants are cordial and an atmosphere of mutual trust and confidence prevails.

SUMMARISED FINANCIAL RESULTS: Year ended Year ended Financial Hilights 31.03.2015* 30.09.2014 (Rs. in lacs) (Rs. in lacs)

Revenue from Operations 20452.49 40660.72

Profit before Interest, Depreciation (3525.83) (1909.55) & Tax

Less: Interest 275.29 6133.15

Profit /(Loss) before Depreciation (3801.12) (8042.70)

Less: Depreciation 873.59 2176.27

Profit/ (Loss) before Taxes (4674.71) (10218.97)

Exceptional items - 944.33

Less : - Current Tax - -

- Previous years Tax - -

- Deferred Tax - -

Net Profit/ (Loss) after Taxes (4674.71) (11163.30)

Add : Surplus brought forward from (19903.09) (8739.79) previous year

Balance Carried to Balance Sheet (24577.80) (19903.09)

* Period from 01.10.2014 to 31.03.2015 (6 months)

OPERATIONS & PERFORMANCE:

During the period under review, the Company's operation remained at near similar levels as previous year. However, due to accumulated losses of earlier years, the Company continued to face a strain on its working capital resources, which in turn impacted the overall profitability and capacity utilization of the plant. Despite the liquidity constraints the Company continued maintaining production activity at all its facilities, and was able to retain its dealings with suppliers and customers.

The overall performance of the Company for the period of 6 months ended 31.03.2015 was a loss of Rs. 4674.71 lacs in comparison to the net loss of Rs. 11163.30 lacs of previous period of 12 months ended 30.09.2014. During the period under review, your Company has achieved a turnover of Rs. 20452.49 lacs against the previous year's (12 months) turnover of Rs.40660.72 lacs.

During the period under review the Company was unable to fulfill its sales commitments to its customers as no financial assistance or utilisation of sanctioned facilities was available to the Company, and that the latter has had to suffer losses and make provisions for loss in value of inventories and was unable to recover full amounts from its several customers outstanding for long. The Company expects that the lenders will accede to its requests and permit dealings to the Company so that business is not lost and operations stabilize at higher levels.

EROSION OF ENTIRE NET WORTH:

Consequent to accumulated losses of the Company exceeding its net worth during the accounting period ended 30th September 2014, and the Company having become a sick industrial company within the meaning of section 3(1) (o) of the Sick Industrial Companies (Special Provisions) Act. 1985, a Reference was filed by the Company before the Hon'ble Board for Industrial and Financial Reconstruction (BIFR).

The Company will be proposing a comprehensive scheme for restructuring of its business and affairs, and is keen that the said scheme is considered and approved by all stakeholders, and sanctioned by the Hon'ble BIFR. The scheme to be proposed by the Company will incorporate the restructuring as may have been sanctioned by lenders and other stakeholders by such time.

OUTLOOK:

The Company's restructuring last carried out in 2009 is no longer under the monitoring of CDR Forum. However the Company has submitted rehabilitation cum settlement proposal to all its lenders and is hopeful of its early consideration.

The Management of the Company is discussing various options for restructuring of debts and its proposal to the lenders is based, inter-alia, on the following:

* Restructuring / realignment / re-sizing of it's the debts in accordance with various Guidelines and precedents, which will help reduce costs on account of interest.

* Improving operational efficiencies, and rationalization of manpower and other costs.

* Continually developing lower cost variants of value added yarns.

* Disposal of noncore assets to generate funds to augment working capital resources.

The Company's proposal to its lenders also envisages that petitions and applications pending before various Courts, amongst others, under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 Securitisaiton and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, will stand compromised with both parties giving up their respective claims and the Company being required to pay restructured amount of debt.

The lenders had appointed a Techno-Economic expert to assess viability of the Company's plant and its operations, which report is awaited, and a decision in the matter may emerge soon thereafter.

SUBSIDIARY COMPANIES:

According to the provisions of Section 129 of Companies Act, 2013, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

As required by Accounting Standard - 21 issued by the Institute of Chartered Accountants of India the consolidated financial statements, included in this Annual Report, incorporate the accounts of its subsidiary Companies namely Winsome Yarns (Cyprus) Limited and Winsome Yarns (FZE) (as at 31.03.2015, unaudited, ceased operations, declared defunct effective 01.04.2014).

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited/ unaudited accounts in respect of subsidiaries are available on web site of the Company.

The ongoing business recessionary conditions in European Countries, caused negative effects to the three step down subsidiaries of the Company, namely, S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l., which were placed under liquidation, and therefore, their Balance Sheets and other financial statements are not available; accordingly, the instant consolidated financial statements of the Company do not include the financials of the above named three subsidiary Companies

The present status of these three subsidiary companies is given as under:-

Sr. No. Name of Subsidiary Start of liquidation process

1 IMM Winsome Italia S.r.l. 30.09.2008

2 S.C. Winsome Romania S.r.l. 26.11.2008

3 S.C. Textil S.r.l. 09.02.2010

Sr. No. Name of Subsidiary Present status

1 IMM Winsome Italia S.r.l. Under Liquidation.

2 S.C. Winsome Romania S.r.l. Under Liquidation.

3 S.C. Textil S.r.l. Under Liquidation.

ISO 9001/ 2008:

Your Directors are pleased to inform you that your Company continues to be the holder of ISO 9001/2008 certificates.

DIVIDEND:

Your Directors are unable to recommend any dividend on equity shares for the year under review.

SHARE CAPITAL:

During the year the company has not allotted any securities.

DIRECTORS:

(a) Ms. Ishika Aggarwal has been appointed as an Additional Director on 31.03.2015 of the Company for a period of five years pursuant to the provisions of Sections 149, 152 and any other applicable provisions, if any, of the Companies Act, 2013 read with Schedule IV to the Companies Act, 2013, the rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force). Ms. Ishika Aggarwal is Bachelor of Science and Masters of Business Administration. This had also fulfill the requirement of having a woman Director on the Board of Directors under the Companies Act, 2013.

(b) Shri K. P. Ramakrishnan has been appointed as an Additional Director on 29.11.2014 of the Company for a period of five years pursuant to the provisions of Sections 149, 152 and any other applicable provisions, if any, of the Companies Act, 2013 read with Schedule IV to the Companies Act, 2013, the rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force). Shri K. P. Ramakrishnan is B.Tech (Metallurgy) from IIT, Chennai. He has around 36 years of experience in Banking Sector and has worked at various levels in different locations in India. He retired as Chief General Manager from IDBI Bank in 2014.

(c) Shri B. M. Padha was nominated as director of the Company by Punjab National Bank and the Board of the Company has appointed w.e.f. 18.10.2014 as Nominee Director of the Company.

(d) Shri Satish Bagrodia, Director, retires by rotation and being eligible, offers himself for re-election.

(e) None of the Directors are disqualified under the provisions of Section 164(2) of the Companies Act, 2013. The Directors have made the requisite disclosures, as required under the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Committees. At the meeting of the Board all the relevant factors that are material for evaluating the performance of individual Directors, the Board and its various committees were discussed in detail. A structured questionnaire each for evaluation of the Board, its various Committees and individual Directors was prepared and recommended to the Board by Nomination & Remuneration Committee for doing the required evaluation after taking into consideration the input received from the Directors covering various aspects of the Board's functioning and its Committees, execution and performance of specific duties, obligations and governance etc.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non- independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process.

NO. OF BOARD MEETINGS:

Three board meetings were convened and held during the financial year 2014-15, comprising a period of 6 months from 01.10.2014 to 31.03.2015. The details thereof are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS:

M/s. Lodha & Co., Chartered Accountants (Firm Registration Number: 301051E), who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2015-16. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s Lodha & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section.

AUDITORS' REPORT:

The Statutory Auditors of the Company have submitted Auditors' Report on the accounts of the Company for the financial year ended March 31, 2015. The explanation/ comments of the Board on every qualification/ reservation or adverse remarks given by the Auditor in its report is annexed herewith as Annexure 'A'.

COST AUDITORS AND COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of various activities are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Balwinder and Associates, Cost Accountants, to audit the cost accounts of the Company for 2015-16 on a remuneration to be decided by the Managing Director of the Company in consultation with the Cost Auditor, subject to approval of the shareholders of the company. The Cost Audit of Textile Industry was not required for the financial year 2014-15.

SECRETARIAL AUDIT:

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. Girish Madan & Associates, a firm of Company Secretaries in practice (C.P. No. 3577) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith as 'Annexure 'B' to this Report.

PUBLIC DEPOSIT:

During the year, the Company has not accepted any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on 31st March, 2015 and state that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis;

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

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

KEY MANAGERIAL PERSONNEL:

Shri Manish Bagrodia, Managing Director, Shri Anand Balkishan Sharma, President (Corporate Finance) and Chief Financial Officer (CFO) and Shri K. V. Singhal, General Manager (Legal) & Company Secretary of the Company are the Key Managerial Personnel of the Company.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance is enclosed as a part of this Annual Report. A certificate from the Secretarial Auditor of the Company regarding compliance with Corporate Governance norms stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

AUDIT COMMITTEE & RISK MANAGEMENT:

The details pertaining to composition of audit committee are included in the Corporate Governance Report.

RISK MANAGEMENT

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for receiving the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of the Company comprising Shri Pradeep Kumar as Chairman, Shri Satish Bagrodia, Shri K. P. Ramakrishnan and Shri S. K. Singla as its Members, met two times during the year. The Committee formulated Remuneration Policy which is attached as Annexure 'C' and forms a part of this Report of the Directors.

RELATED PARTY TRANSACTIONS:

All transactions entered into with related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with the related parties during the financial year which were in conflict with the interest of the Company and hence, enclosing of Form AOC-2 is not required. Suitable disclosure as required by the Accounting Standard (AS 18) has been made in the notes to the Financial Statements.

All Related Party Transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

DECLARATION BY INDEPENDENT DIRECTORS:

Necessary declarations have been obtained from all the Independent Directors under sub-section (7) of Section 149 of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDER:

During the financial year, there was no significant and material order passed by any Court or any Tribunal against the Company.

INTERNAL FINANCIAL CONTROLS:

The Company has in place internal financial control systems, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

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(3) of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 'D'.

ENVIRONMENT AND POLLUTION CONTROL:

Top priority continues to be given to preservation of the environment by all the units of the Company. To combat pollution and strengthen the area ecology, considerable emphasis is placed on plantation of fragrant and shady trees. We are cautious of preserving water through recycling and rainwater harvesting to the extent possible. All manufacturing facilities possess the required environmental clearance from the respective Pollution Control Boards and do comply with the relevant legislation. The Company is well aware of its responsibility towards a better and clean environment. Our efforts in environment management go well beyond mere compliance with statutory requirements. The Company has always maintained harmony with nature by adopting eco-friendly technologies and upgrading the same from time to time incidental to its growth programmes.

PARTICULARS OF EMPLOYEES:

The prescribed particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 'E' and forms a part of this Report of the Directors.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013 is annexed herewith as Annexure 'F'.

CASH FLOW ANALYSIS:

In conformity with the provisions of clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended 31.03.2015 is annexed with financial statements.

CONSOLIDATED ACCOUNTS

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and Winsome Yarns FZE in the Annual Report.

INSURANCE

All the properties of your Company have been adequately insured against fire, flood, earthquake and explosive risks etc.

ACKNOWLEDGEMENTS:

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

Registered Office : On behalf of the Board, SCO 191-192, Sector 34-A Chandigarh - 160022 Manish Bagrodia Pradeep Kumar Dated : 28.05.2015 Managing Director Director

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Sep 30, 2014

Dear Members,

The Directors have pleasure in presenting the 24th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the financial year ended 30th September, 2014.

Financial Highlights Year ended Year ended 30.9.2014 30.9.2013* (Rs. in lacs) (Rs. in lacs)

Revenue from Operations 40660.72 77772.43

Profit before Interest, Depreciation & Tax (1909.55) 8514.99

Less: Interest 6133.15 8010.31

Profit /(Loss) before Depreciation (8042.70) 504.68

Less: Depreciation 2176.27 326797

Profit/ (Loss) before Taxes (10218.97) (2763.29)

Exceptional items 944.33 3483.85

Less : - Current Tax - -

- Previous years Tax - -

- Deferred Tax - 1233.24

Net Profit/ (Loss) after Taxes (11163.30) (7480.38)

Add : Surplus brought forward from previous year (8739.79) (1259.41)

Balance Carried to Balance Sheet (19903.39) (8739.79)

* Period from 01.04.2012 to 30-09-2013.(18 months)

Operations & Performance

During the year in retrospect, the performance of the Company continued to be stressed. The compounded impact of earlier year''s losses as comprehensively highlighted in the last years Report to you, caused further erosion of working capital funds resulting in subdued operations. The several requests to lenders for restructuring & enhancement of need based working capital funds have not been met with.

The current period under review faced additional challenges, like sudden glut in the domestic and international market, with abnormal increased input cost of raw material and power, fluctuating global commodity prices and low demand coupled with high debt, had an adverse financial impact on the Company.

The cumulative effect of all the above mentioned factors took a heavy toll on the overall performance and the Company for the period of 12 months ended 30.09.2014 with a loss of Rs. 11163.30 lacs in comparison to the net loss of Rs. 7480.38 lacs of previous period of 18 months ended on 30.09.2013. During the year under review your Company has achieved a turnover of Rs. 40660.72 lacs against the previous year''s (18 months) turnover of Rs. 77772.43 lacs.

During the year under review, the exceptional increase in losses of the Company is attributed to paucity of working capital funds and exceptional items related to provisions for doubtful debts and advances.

Erosion of Entire Net Worth

As per the audited financial statements as at 30th September 2014, the accumulated losses of the Company have exceeded its entire net worth and the Company has become a Sick Industrial Company under section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act. 1985. Though, the Board of Directors of the Company had sufficient reasons to form an opinion that the Company had become a Sick Industrial Company, on the basis of unaudited financial statements for the period ended June 30, 2014 and accordingly a Reference was filed with Board for Industrial and Financial Reconstruction under section 15(1) of the SICA on October 16, 2014 and registration of the same is awaited.

Outlook:

In order to come out of the difficult situation and explore the current opportunities, the Management of the Company has been working on various options and some of the steps which would have an effect on the overall performance of the Company for consideration of lenders of the Company are listed as under:

- To restructure/ realign / re-size its debts in terms of CDR Guidelines with an aim to reduce costs by increasing efficiencies, rationalization of manpower and other costs.

- To continue with an effort on development of low cost variants of value added yarns.

- To dispose of noncore assets of the Company and the funds so generated will be infused in the working of the Company.

- To explore and develop overseas markets as export of yarn is profitable on account of appreciation of US dollar.

- Govt. of Punjab has fully repaired the canal on which all the five Micro Hydel Projects of the Company are situated. With this the water availability will be much better and Company will be able to generate more electricity. This will reduce the power cost.

- With revival of US economy the demand of yarn will increase, which will result in increase in better margins.

In view of the above developments, the Company has made a proposal to all lenders in April 2014, for deep restructuring with Holding on Operations. The Lenders and CDR EG in its meeting held on 10.06.2014 decided that TEV Study of operation of the Company to be carried out, which was assigned to M/S Dun & Bradstreet, who submitted the Report on 23.072014, endorsing the viability of the Company. However, lenders were not willing to support restructuring proposal and decided for initiating recovery actions under the RDDB & SARFAESI Acts. The recall notices are being suitably replied under the guidance of legal experts with a request to the lenders to withdraw the same in the interest of all stakeholders and long term viability of the Company. The Company is continuously pursuing the lenders to reconsider their decisions and recommend for restructuring as requested. However, the holding on operations was permitted by the lenders to the Company in October 2014.

The Company has raised its claim on the lenders for the amount of losses suffered by the Company to the extent it considers the losses as attributed to the lenders.

The management of the Company is making efforts for restructuring of its business and affairs and expects to revive itself. The current efforts are also targeted towards increasing its sales and profit margins by increased production/ development of value added yarns. The Company is also launching some new products with some major retailers in US as well as Europe and other international markets.

Subsidiary Companies & Overseas Operations

According to the provisions of Section 212 of Companies Act, 1956, the holding Company is required to attach the balance sheet etc. of its subsidiary companies along with its Balance Sheet. However, pursuant to provisions of general circular no. 2/2011 issued by Ministry of Corporate Affairs on 8th February 2011, a general exemption is granted to attach the balance sheet of the subsidiary companies. Accordingly, the annual accounts of Winsome Yarns (Cyprus) Limited and Winsome Yarns FZE have not been attached in this Annual Report, but the same are available for inspection at the registered office of the Company. Further, due to Global recession of which European Countries are the worst affected, the three step down subsidiaries of the Company namely; S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l. are under liquidation and their Balance Sheet etc. is not available.

The exemption from attaching the Balance Sheet etc. of these three subsidiary companies was sought, pursuant to Section 212(8) of Companies Act, 1956, and in response to which, Ministry of Corporate Affairs informed that pursuant to General Circular No. 2/2011 issued by Ministry of Corporate Affairs the approval of Ministry of Corporate Affairs is no more required.

The present status of these three subsidiary companies is given as under:-

Name of Subsidiary Start of liquidation Present status process IMM Winsome Italia S.r.l. 30.09.2008 Liquidation process is going on. S.C. Winsome Romania S.r.l. 26.11.2008 Liquidation process is going on.

S.C. Textil S.r.l. 09.02.2010 Liquidation process is going on.

ISO 9001/ 2008

Your Directors are pleased to inform you that your Company continues to be the holder of ISO 9001/2008 certificates.

Dividend

Your Directors are unable to recommend any dividend on equity shares for the year under review.

Directors

In accordance with the Company''s Articles of Association, Shri Manish Bagrodia, Director, retires by rotation and being eligible, offers himself for re-appointment.

During the year 2013-14, the Punjab National Bank has withdrawn the nomination of Shri Joginder Kumar Gupta from the Board of the Company w.e.f. 14.072014 and nominated Shri Brij Mohan Padha in place of Shri Joginder Kumar Gupta. The Board of Directors of the Company has approved the nomination of Shri Brij Mohan Padha, Dy. General Manager, Punjab National Bank w.e.f. 18.10.2014 as Nominee Director of the Company vide circular resolution dated 20.10.2014.

Shri Rohtash Kumar Kucheria has resigned from directorship of the Company and the Board of Directors has accepted the same w.e.f. 26.09.2014 vide circular resolution dated 06.10.2014.

Further, Shri K. P Ramakrishnan was appointed as Independent Non-executive Director of the Company with effect from 29.11.2014.

Consolidated Accounts

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and Winsome Yarns FZE in the Annual Report.

Insurance

All the properties of your Company have been adequately insured against fire, flood, earthquake and explosive risks etc.

Public Deposit

The Company did not accept any Fixed Deposit during the year.

Auditors

M/s Lodha & Co, Chartered Accountants, Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has obtained a Letter of Eligibility in terms of provisions of Section 139 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014 from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be in accordance of provisions of Section 141 of the Companies Act 2013 and Rules made thereunder and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013, the Chartered Accountants Act 1949 and Rules & Regulations made thereunder. Therefore, it is proposed to re-appoint M/s Lodha & Co, Chartered Accountants, as Statutory Auditors of the Company, for a period of three years i.e. from the conclusion of this 24th Annual General Meeting of the Company till the conclusion of 27th Annual General Meeting of the Company, subject to the ratification of their appointment by the members in every subsequent Annual General Meeting in accordance with the provisions of Section 139 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.

Appointment of Key Managerial Persons (KMPs)

Shri Anand Balkishan Sharma, President (Corporate Finance), has been appointed as Chief Financial Officer (CFO) of the Company by the Board of Directors in their meeting held on 13th August, 2014 under the provisions of Section 203 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Auditors'' Report

The Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended September 30, 2014. This Auditors'' Report is self-explanatory and requires no comments.

Particulars of Employees

None of the employees is covered under section 217(2A) of the Companies Act, 1956 read with Companies (particulars of Employees) Rules, 1975 as amended.

Management''s Discussion and Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual report.

Statutory Information

(A) Directors'' Responsibility Statement

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

i. in the preparation of the annual accounts for the financial year ended 30th September, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the accounting policies are applied consistently and reasonable prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

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

iv. the Directors have prepared the accounts for the financial year ended 30th September, 2014 on a going concern basis.

(B) Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo.

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

Corporate Governance

During the financial year, the Company continued its commitment to the principles of good Corporate Governance. The Company believes that best board practices and transparent disclosures are necessary for enhancing shareholders value.

A report on Corporate Governance, along with a Certificate of compliance from the Auditors of the Company is attached as ANNEXURE ''B'' to this report.

Statutory Disclosures

None of the Directors are disqualified under the provisions of Section 164(2) of the Companies Act, 2013. The Directors have made the requisite disclosures, as required under the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement.

Sexual Harassment

Pursuant to provisions of Section 4 of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013, the Board of Directors of the Company have constituted the "Internal Complaint Committees" at the different work places of the Company.

Whistle Blower Policy

Pursuant to provision of section 177(9) of the Companies Act, 2013 and Clause 49(II)(F) of the listing agreement, the Company has adopted the ''Whistle Blower Policy'' and authorized to the Audit Committee of the Board to look after all the matters relating to Whistle Blower Policy and to submit its report to Board at regular intervals, on the receipt of any concerned matter, for appropriate action.

Next financial year of the Company

The last financial year of the Company was closed on 30th September, 2014. The period of next financial year will be decided by the Board of Directors of the Company in times to come.

Acknowledgement

Your Directors wish to place on record their deep appreciation of the timely support provided by the Company''s bankers, all the vendors and the dedication and commitment of the employees at all levels. We are sure, we will continue to dare and reach the pinnacle of our journey called success.

Your Directors convey their grateful thanks to all the Government Authorities and Shareholders for their continued and unstinted assistance, co-operation and patronage.

We also take this opportunity to thank all the valued customers who have appreciated our products and have patronized them.

For and on behalf of the Board Pradeep Kumar Director

Place : Chandigarh Manish Bagrodia Dated : 29.11.2014 Managing Director

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Mar 31, 2012

The Directors have pleasure in presenting the 22nd Annual Report together with the audited statement of Accounts of the Company for the financial year ended 31st March, 2012.

Financial Highlights Year ended Year ended 31.3.2012 31.3.2011 (Rs. in lacs) (Rs. in lacs)

Revenue from Operations 43956.05 33337.31

Profit before Interest , Depreciation & Tax 2678.41 7226.46

Less: Interest 4927.09 3922.29

Profit /(Loss) before Depreciation (2248.68) 3304.17

Less: Depreciation 2296.12 2179.58

Profit/ (Loss) before Taxes (4544.80) 1124.59

Less : Current Tax -- --

Previous years Tax -- 46.13

Deferred Tax (1367.66) 467.56

Net Profit/ (Loss) after Taxes (3177.14) 610.90

Add : Surplus brought forward from previous year 1917.73 1306.83

Balance Carried to Balance Sheet (1259.41) 1917.73

Operations & Performance

High cotton prices, coupled with fluctuating inventory, saw Textile and Clothing (T&C) companies post a dip in bottom line by over 100 per cent in many cases over 2011-12, says the Confederation of Indian Textile Industry (Citi).

There is no issue with cotton prices rising, if they do so gradually. However, from October 2010 to March 2011, prices rose from Rs 34,000 per candy (356 kg) to Rs 63,000 per candy. In the next one month, it almost came down to where it (originally) was. Such high fluctuations led to textile mills incurring heavy losses, during the current year.

According to data compiled by the Centre for Monitoring Indian Economy, out of 234 Textile and Clothing (T&C) companies, 74 per cent or 174 companies saw poorer financial results for the first three quarters of 2011-12. And, of these 174, as many as 130 were net loss-making. The Company also suffered losses on account of sale of inventory piled up during the year due to stoppage of export by Government of India.

Your Company has achieved a turnover of Rs. 43956.05 lacs against the previous year's turnover of Rs. 33337.31 lacs i.e registering an increase of 31.85% (approx.). The Company has incurred a net loss (after tax) of Rs. 3177.14 lacs against previous year's net profit after tax of Rs. 610.90 lacs.

Expansion Projects

The management is pleased to inform you that out of five Micro Hydel Power Projects having a total capacity to produce of 3.9 MW of electricity, four Micro Hydel Projects have been commissioned upto 31st March, 2012. The implementation of one Micro Hydel Power Project is at an advanced stage and are expected to be commissioned with in current financial year 2012-2013.

Subsidiary Companies & Overseas Operations

During the year wholly owned subsidiary of the Company, Winsome Yarns (Cyprus) Limited has incorporated a wholly owned subsidiary in UAE namely Winsome Yarns FZE on 11.07.2011. According to the provisions of Section 212 of Companies Act, 1956, the holding company is required to attach the balance sheet etc. of its subsidiary companies along with its balance sheet. However, pursuant to provisions of general circular no. 2/2011 issued by Ministry of Corporate Affairs on 8th February 2011, a general exemption is granted to attach the balance sheet of the subsidiary companies. Accordingly, the annual accounts of Winsome Yarns (Cyprus) Limited and Winsome Yarns FZE have not been attached in this Annual Report, but the same are available for inspection at the registered office of the company. Further due to Global recession of which European Countries are the worst affected, the second, third and fourth step down subsidiaries of the Company namely; S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l. are under liquidation and their balance sheet etc. is not available. The exemption from attaching the balance sheet etc. of these three subsidiary companies was sought, pursuant to Section 212(8) of Companies Act, 1956, and in response to which, Ministry of Corporate Affairs informed that pursuant to General Circular No. 2/2011 issued by Ministry of Corporate Affairs the approval of Ministry of Corporate Affairs is no more required.

The present status of these three subsidiary companies is given as under:-

Sr. No. Name of Subsidiary Start of liquidation process Present status

1 IMM Winsome Italia S.r.l. 30.09.2008 Liquidation process is going on.

2 S.C. Winsome Romania S.r.l. 26.11.2008 Liquidation process is going on.

3 S.C. Textil S.r.l. 09.02.2010 Liquidation process is going on.

Consolidation of equity shares from nominal value of Re. 1/- each to Rs. 10/- each

During the year 2011-12, the company has consolidated the nominal value of equity shares from Re. 1/- each to Rs. 10/- each on 06.08.2011 and issued new equity shares of face value of Rs. 10/- each in place of old equity shares of face value Re. 1/- each on 06.08.2011.

Allotment of equity shares pursuant to conversion of equivalent number of convertible warrants

Out of total number of 2,51,00,000 convertible warrants, the company had allotted 1,30,32,500 equity shares on 30.09.2010 and balance 1,20,67,500 equity shares on 17.08.2011 to Promoter and Strategic Investors pursuant to conversion of equivalent number of convertible warrants. The Company is utilising these funds for purposes as stated in the Extraordinary Statement of General Meeting held on 05.02.2010 vide which approval of members was received for the issue of said allotment.

ISO 9001/ 2008

Your directors are pleased to inform you that your company continue to be the holder of ISO 9001/2008 certificates. Dividend

Your Directors are unable to recommend any dividend on Equity Shares for the year under review.

Directors

In accordance with the Company's Articles of Association, Shri Satish Bagrodia and Shri Brij Mohan Khanna, Directors retire by rotation and being eligible, offer themselves for re-appointment.

During the year 2011-12, the Punjab National Bank has nominated Shri Vinay Kumar, FGM as nominee director of the Company in place of Shri Yashpal Barar. Board of Directors in their meeting held on 13.02.2012 appointed to Shri Vinay Kumar as Nominee Director of the Company.

Consolidated Accounts

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, your directors provide the Audited Consolidated Financial Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and Winsome Yarns FZE in the Annual Report.

Insurance

All the properties of your Company have been adequately insured against fire, flood, earthquake and explosive risks etc.

Public Deposit

The Company did not accept any Fixed Deposit during the year.

Auditors

M/s. Lodha & Co., Chartered Accountants (FRN 301051E), who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2012-13. As required under the provisions of the Section 224(1B) of the Companies Act, 1956, the Company has obtained written confirmation from M/s. Lodha & Co. that their appointment, if made would be in conformity with the limits specified in the Section.

Cost Audit

The Central Government's Cost Auditor order specified an audit of cost accounting records of the textile Companies every year. This is applicable to the products manufactured by the Company. The Board of Directors, subject to approval of Central Government, appointed M/s Aggarwal Vimal & Associates, Cost Accountants, having its office at SCO 124-125, Sector 34-A, Chandigarh to carryout the audit for the financial year 2012-2013. Further the cost audit report for the financial year 2010-11 had been filed on 20.09.2011 (Due date on 30.09.2011) vide SRN-B20809885. Auditors' Report

Observations made in the Auditors' Report are self-explanatory and therefore do not call for any further explanation. Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual report. Corporate Governance

During the financial year, the company has continued its commitment to the principles of good Corporate Governance. The company believes that best board practices and transparent disclosures are necessary for enhancing shareholders value.

A report on Corporate Governance, along with a Certificate of compliance from the Auditors of the Company is attached as ANNEXURE 'B' to this report.

Statutory Information

(A) Directors' Responsibility Statement

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

i. that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that the accounting policies are applied consistently and reasonable prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the year under review;

iii. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and defecting fraud and other irregularities;

iv. that the directors have prepared the accounts for the financial year ended 31st March, 2012 on a going concern basis.

(B) Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo.

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

Statutory Disclosures

None of the Directors are disqualified under the provisions of Section 274(1)(g) of the Companies Act, 1956. The Directors have made the requisite disclosures, as required under the provisions of Companies Act, 1956 and Clause 49 of the Listing Agreement.

Acknowledgement

Your Directors wish to place on record their deep appreciation of the timely support provided by the Company's bankers, all the vendors and the dedication and commitment of the employees at all levels. We are sure we will continue to dare and reach the pinnacle of our journey called success.

Your Directors convey their grateful thanks to all the Government authorities and shareholders for their continued and unstinted assistance, co-operation and patronage.

We also take this opportunity to thank all the valued customers who have appreciated our products and have patronised them.

For and on behalf of the Board

Place : Chandigarh Satish Bagrodia

Dated : 30.05.2012 Chairman

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Mar 31, 2011

The Directors have pleasure in presenting the 21st Annual Report together with the audited statement of Accounts of the Company for the financial year ended 31st March, 2011.

Financial Highlights Year ended Year ended

31.3.2011 31.3.2010

(Rs.in lacs) (Rs.in lacs)

Sales 33012.56 22225.71

Profit before Interest , Depreciation & Tax 7436.77 3394.73

Less: Interest 4132.60 3173.93

Profit /(Loss) before Depreciation 3304.17 220.80

Less: Depreciation 2179.58 2014.09

Profit/ (Loss) before Taxes 1124.59 (1793.29)

Less : - Current Tax -- --

- Previous years Tax 46.13 --

- Fringe Benefit Tax -- 0.15

- Deferred Tax Liability/ (Asset) 467.56 (586.02)

Net Profit/ (Loss) after Taxes 610.90 (1207.42)

Add : Surplus brought forward from previous year 1306.83 2514.25

Balance Carried to Balance Sheet 1917.73 1306.83

Operations & Performance

The year under review was an extremely trying one. A runaway inflation touching a high point of 13.9% during the year, the tight monetary policies followed by the authorities for most of the year to control inflation with the consequent high interest rates, the precipitous fall in the value of the Rupee during the year, increase in cotton prices from Rs. 29000 per candy (approximately) in May, 2010 to Rs.63000 per candy (approximately) in March, 2011 i.e an increase of 117%, all lead to an extremely challenging environment in which the Company had to operate. Further the government of India restricted the total quantity of export of cotton yarn to 720 million kgs which had an adverse impact on the sales during the year.

During the year, there was a progressive recovery in the Textile industry, both in India and overseas. Further, a series of planned steps that were taken during the year ensured that the Company remains competitive through stringent cost control and fiscal prudence. The Constant introduction of strategic marketing without affecting the quality of the product, enabled your company to achieve better performance as compared to previous year. Your Company has achieved a turnover of Rs. 33012.56 lacs against the previous years turnover of Rs. 22225.71 lacs i.e registering an increase of 49% (approx.). The Company has earned a net profit (after tax) of Rs. 610.90 lacs against previous years net loss after tax of Rs. 1207.42 lacs.

During the current financial year with the improved production, it is expected that the performance will be substantially better.

Expansion Projects

The management is pleased to inform you that out of five Micro Hydel Power Projects having a total capacity to produce 3.9 MW of electricity, two Micro Hydel Projects have been commissioned during the year. The implementation of three Micro Hydel Power Projects is at an advanced stage and are expected to be commissioned with in current financial year 2011-2012.

Subsidiary Companies & Overseas Operations

According to the provisions of Section 212 of Companies Act, 1956, the holding company is required to attach the balance sheet etc. of its subsidiary companies along with its balance sheet. However, pursuant to provisions of general circular no. 2/2011 issued by Ministry of Corporate Affairs on 8th February 2011, a general exemption is granted to attach the balance sheet of the subsidiary companies. Accordingly, the annual accounts of Winsome Yarns (Cyprus) Limited has not been attached in this Annual Report, but the same is available for inspection at the registered office of the company. Due to Global recession of which European Countries are the worst affected, the second, third and fourth step down subsidiaries of the Company namely; S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l. went in to liquidation and their balance sheet etc. is not available. The exemption from attaching the balance sheet etc. of these three subsidiary companies was sought, pursuant to Section 212(8) of Companies Act, 1956, and in response to which, Ministry of Corporate Affairs vide its letter no. 47/177/2011-CL-III dated 06.04.2011 informed that pursuant to General Circular No. 2/2011 issue by Ministry of Corporate Affairs the approval of Ministry of Corporate Affairs is no more required.

The present status of these three subsidiary companies is given as under:-

Sr. No. Name of Subsidiary Start of liquidation process Present status

1 IMM Winsome Italia S.r.l. 30.09.2008 Liquidation process is going on.

2 S.C. Winsome Romania S.r.l. 26.11.2008 Liquidation process is going on.

3 S.C. Textil S.r.l . 09.02.2010 Liquidation process is going on.

Allotment of equity shares pursuant to conversion of equivalent number of convertible warrants

During the year 2010-11, the company has allotted 130325000 equity shares of Re. 1/- each on 30.09.2010 to promoter and Public Financial Investors pursuant to conversion of equivalent number of convertible warrants, out of total number of 251000000 convertible warrants issued on 19.02.2010. The Company is utilising these funds for purposes as stated in Notice for convening the Extraordinary General Meeting held on 05.02.2010 vide which approval of members was received for the issue of said allotment.

Issue of Global Depository Receipts

During the year the Company has allotted 199412500 equity shares of Re. 1/- each underlying 1994125 Global Depository Receipts (GDRs) @ US$ 6.64 per GDR on 29.03.2011. Each GDR represents 100 equity shares of the company. The total proceeds from the GDRs issue was US$ 13.24 Milion. The GDRs are listed on:

Luxembourg Stock Exchange/ LuxSE

Societe de la Bourse de Luxembourg S.A.

B.P. 165, L-2011 Luxembourg

Siege Social, 11, av de la Porte-Neuve.

Telehpone: (352) 47 79 36216, Fax: [phone]

After the allotment of underlying equity shares, the paid up equity capital of the company stands increased from Rs. 386984790 to Rs. 586397290 comprising of 586397290 equity shares of Re. 1/- each.

ISO 9001/ 2008

Your directors are pleased to inform you that your company continue to be the holder of ISO 9001/2008 certificate.

Dividend

Your Directors are unable to recommend any dividend on Equity Shares for the year under review.

Directors

In accordance with the Companys Articles of Association, Shri Chandra Mohan and Shri Ashish Bagrodia, Directors retire by rotation and being eligible, offer themselves for re-appointment.

During the year 2010-11, the Punjab National Bank has nominated Shri Yashpal Barar as nominee director of the Company in place of Shri Gulshan Kumar Sawhney. Board of Directors in their meeting held on 17.03.2011 appointed to Shri Yashpal Barar as Nominee Director of the Company. Shri Yashpal Barar is DGM & Circle Head of PNB, Ludhiana. The Punjab National Bank is entitled to nominate one Director on the Board of the Company pursuant to LOA dated 28.03.2010 in respect of restructuring of Companys accounts under CDR mechanism.

Consolidated Accounts

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, your directors provide the Audited Consolidated Financial Statement of Winsome Yarns Limited and Winsome Yarns (Cyprus) Limited in the Annual Report.

Insurance

All the properties of your Company have been adequately insured against fire, flood, earthquake and explosive risks etc.

Public Deposit

The Company did not accept any Fixed Deposit during the year.

Auditors

M/s. Lodha & Co., Chartered Accountants (FRN 301051E), who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2011-12. As required under the provisions of the Section 224(1B) of the Companies Act, 1956, the Company has obtained written confirmation from M/s. Lodha & Co. that their appointment, if made would be in conformity with the limits specified in the Section.

Cost Audit

The Central Governments Cost Auditor order specified an audit of cost accounting records of the textile Companies every year. This is applicable to the products manufactured by the Company. The Board of Directors, subject to approval of Central Government, appointed M/s V. Kumar & Associates, Cost Accountants, having its office at SCO 124-25, 1st Floor, Sector 34-A, Chandigarh to carryout this audit for the current year.

Auditors Report

Observations made in the Auditors’ Report are self explanatory and therefore do not call for any further explanation.

Corporate Governance

During the financial year, the company has continued its commitment to the principles of good Corporate Governance. The company believes that best board practices and transparent disclosures are necessary for enhancing shareholders value.

A report on Corporate Governance, along with a Certificate of compliance from the Auditors of the Company is attached as ANNEXURE B to this report.

Statutory Information

(A) Directors Responsibility Statement

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

i. that in the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. that the accounting policies are applied consistently and reasonable prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the year under review; iii. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the company and for preventing and defecting fraud and other irregularities; iv. that the directors have prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

(B) Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo.

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

Statutory Disclosures

None of the Directors are disqualified under the provisions of Section 274(1)(g) of the Companies Act, 1956. The Directors have made the requisite disclosures, as required under the provisions of Companies Act, 1956 and Clause 49 of the Listing Agreement.

Acknowledgement

Your Directors wish to place on record their deep appreciation of the timely support provided by the Companys bankers, and all the vendors and of the dedication and commitment of the employees at all levels. We are sure that we will continue to dare and reach the pinnacle of our journey called success.

Your Directors convey their grateful thanks to all the Government authorities and shareholders for their continued and unstinted assistance, co- operation and patronage.

We also take this opportunity to thank all the valued customers who have appreciated our products and have patronised them.

For and on behalf of the Board

Place : Chandigarh Satish Bagrodia

Dated : 12.05.2011 Chairman

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Mar 31, 2010

The Directors have pleasure in presenting the 20th Annual Report together with the audited statement of Accounts of the Company for the financial year ended 31 st March, 2010.

Financial Highlights

Year ended 31.3.2010 Year ended 31.3.2009 (Rs.in lacs) (Rs. in lacs)

Sales 22225.71 14767.71

Profit before Interest, Depreciation & Tax 3394.73 159.96

Less: Interest 3173.93 2600.24

Profit/(Loss) before Depreciation 220.80 (2440.28)

Less: Depreciation 2014.09 1910.02

Profit/(Loss) before Taxes (1793.29) (4350.30)

Less: —Current Tax

- Credit against MAT

- Fringe Benefit Tax 0.15 10.47

- Deferred Tax Liability/(Asset) (586.02) (1577.88)

Net Profit J (Loss) after Taxes (1207.42) (2782.89)

Add: Surplus brought forward from previous year 2514.25 5297.14

Balance carried to Balance Sheet 1306.83 2514.25

Operations & Performance

In the backdrop of the financial crisis witnessed in the previous financial year and the subsequent fallout, FY 2010 was an extremely challenging year for your Company. However, the resilience and inherent strengths of your companys brands, quality manufacturing and deep network relationships enabled your company to weather the downturn and achieve better performance as compared to previous year. Your company continues to be the market leader in its core business. A number of rationalization and restructuring initiatives were taken during the year under review to further consolidate its strengths and position itself to take advantage of the upturn. During the year under review, your Company has achieved a turnover of Rs. 22225.71 lacs against the previous years turnover of Rs. 14767.11 lacs i.e registering an increase of 50% (approx.). However the Company incurred a net loss (after tax) of Rs. 1207.42 lacs (previous year net loss after tax Rs. 2782.89 lacs). With the increased turnover the Company managed to reduce its net losses by 56% (approx.). The performance during the year had been severely affected due to increase in raw material prices, shortage of manpower and electricity. Further, the general inflationary conditions of the country have also affected the performance of the company.

However, during the current year the yarn markets have been bullish and along with the improved production, your company has started to perform better as compared to the last year. With this trend it is expected that the current year performance will be substantially better.

Expansions

The Company had undertaken following expansion projects:

(a) Addition of 60,000 spindles in two phases at it existing Derabassi Plant.

(b) Installation of another 180 knitting machines in three phases at Mohali; and

(c) Implementation of 3.9 MW Micro Hydel Power Project at 5(five) locations near Ludhiana, Punjab.

The Board is pleased to inform the members that installation of 30,000 spindles and 180 knitting machines have successfully completed. The implementation of five mini hydel power projects to produce 3.9 MW of electricity is underway. The first project has already commissioned on 12th June, 2010. The second is expected to be commissioned in September, 2010. The rest three projects are at advanced stage of implementation.

Subsidiary Companies & Overseas Operations

According to the provisions of Section 212 of Companies Act, 1956, the holding company is required to attach the balance sheet etc. of its subsidiary companies along with its balance sheet. Due to Global recession of which European Countries are the worst affected, the second, third and fourth step down subsidiaries of the Company namely; S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l. went in to liquidation and their balance sheet etc. is not available. The exemption from attaching the balance sheet etc. of these three

subsidiary companies was sought, pursuant to Section 212(8) of Companies Act, 1956, which has since been granted by Ministry of Corporate Affairs, Govt, of India vide its letter no. 47/644/2010-CL-III dated 11.08.2010. The present status of these three subsidiary companies is given as under:-

S.No. Name of Subsidiary Start of liquidation process Present status

1. IMM Winsome Italia S.r.l. 30.09.2008 Liquidation process is going on.

2. S.C. Winsome Romania S.r.l. 26.11.2008 Liquidation process is going on.

3. S.C. Textil S.r.l. 09.02.2010 Liquidation process is going on.

However, as soon as the accounts of subsidiary companies, for which exemption has been granted by Govt, of India, received by the Company, the same shall be circulated to the shareholders of Winsome Yarns Limited.

Sub-division of equity shares of the company

During the year the face value of equity shares of the company has been sub-divided from Rs. 10/- each to Re. 1/-eachw.e.f. 23.01.2010.

Preferential Allotment of Convertible Warrants:

During the year, as approved by shareholders in their meeting held on 5th February, 2010, the Board of Directors have allotted 25,10,00,000 convertible warrants to promoter and strategic investors at the rate of Re. 1.60 per warrant convertible into one equity share of Re. 1/- each.

IS/ISO 9002/ 14001

Your directors are pleased to inform you that your company continue to be the holder of IS/ISO 9002/ 14001 certificates.

Dividend

Your Directors are unable to recommend any dividend on Equity Shares for the year under review.

Directors

In accordance with the Companys Articles of Association, Shri Satish Bagrodia and Shri Brij Mohan Khanna, Directors retire by rotation and being eligible, offer themselves for re-appointment.

During the year on 30th July, 2009, Shri G.K. Sawhney had been appointed by Punjab National Bank as Nominee Director of the Company, who was entitled to nominate one Director on the Board of the Company pursuant to LOA dated 28.03.2010 in respect of restructuring of Companys debts under CDR mechanism.

Consolidated Accounts

(n accordance with Accounting Standards AS-21 on Consolidated Financial Statements, your directors provide the Audited Consolidated Financial Statement in the Annual Report.

Insurance

All the properties of your Company have been adequately insured against fire, flood, earthquake and explosive risks.

Public Deposit

The Company did not accept any Fixed Deposit during the year. Directors Responsibility Statement

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

i. that in the preparation of the annual accounts for the financial year ended 31st March, 20t0, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that the accounting policies are applied consistently and reasonable prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the year under review;

iii. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and otter irregularities;

iv. that the directors have prepared the accounts for the financial year ended 31s March, 2010 on a going concern basis.

Audit

M/s. Lodha & Co., Chartered Accountants, who are Statutory Auditors of the Company and hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2010-11. As required under the provisions of the Section 224(1 B) of the Companies Act, 1956, the Company has obtained written confirmation from M/s. Lodha & Co. that their appointment if made would be in conformity with the limits specified in the Section.

As per the requirement of Central Government and pursuant to Section 233B of the Companies Act, 1956 your Company carries out an audit of cost records every year.

Conservation of Energy, Technology Absorption and Foreign Exchange earning and outgo.

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

Particulars of the Employees

The Particulars of the employees as required by the provisions of section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, is annexed to this report.

Auditors Report

Auditors observations regarding non provision for shortfall in recovery (amount unascertained) against overdue debt and non provision for diminution in the value of investment in a subsidiary company and remuneration paid to the managing director have been explained in detail in Note No. 16, 10B and 8 of Schedule 15(B) on Accounting Policies and Notes on Accounts, respectively.

Corporate Governance

During the financial year, the company has continued its commitment to the principles of good Corporate Governance. The company believes that best board practices and transparent disclosures are necessary for enhancing shareholders vaiue.

A report on Corporate Governance, alongwith a Certificate of compliance from the Auditors of the Company is attached as ANNEXURE B! to this report.

Acknowledgement

Your Directors place on record their deep appreciation of the devoted and sincere services rendered by the officers, staff and workers who have contributed significantly for its performance and for enhancing the Companys inherent strength. Your Directors are also grateful for the cooperation and assistance received from financial institutions, banks and customers, during the year under review.

By order of the Board

Place : Chandigarh Satish Bagrodia

Dated : 24.08.2010 Chairman