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Directors Report of Banswara Syntex Ltd.

Mar 31, 2016

Dear Shareholders,

The Directors are pleased to present the 40th Annual Report of the Company together with its Audited Accounts for the year ended 31st March, 2016.

Financial review (Rs, in Lacs)

Current year 2015-16

Previous year 2014-15

Gross Income

127099

123565

Net Income

126465

122616

Profit before interest, extraordinary items, depreciation & tax

17136

15454

Profit before depreciation & tax

10137

7385

Less: Depreciation

5754

5939

Profit before tax

4383

1446

Tax Expenses

1663

643

Profit after Tax

2720

803

Dividend on Equity Shares

339

164

Tax on Dividend

69

33

Earnings per share (Rs) : Basic

16.12

5.06

Diluted

16.12

4.90

Operations & state of affairs

The production quantity during 2015-16, when compared with previous year is almost flat for yarn, increased by 2.50% for fabrics and has marginally declined in case of garments.

Your Company''s net income from operations during 2015-16 has been Rs,1265 Crores as against Rs,1226 Crores during 2014-15.

The profit before interest, depreciation and tax (PBIDT) during 2015-16 is Rs,171 Crores as against Rs, 155 Crores during 2014-15 - up by 10%. Similarly, the profit before depreciation and tax (PBDT) has been Rs,101 Crores as against Rs, 74 Crores during 2014-15. The post tax net profit of the Company during 2015-16 at Rs, 27.20 crores increased by more than 239% over the previous year.

The basic and diluted EPS for the year 2015-16 is same at Rs, 16.12 as against Rs, 5.06 and Rs, 4.90 respectively for 2014-15.

Your Company has charged depreciation on fixed assets as per the provisions of Schedule II of the Companies Act, 2013.

The Company has obtained approval of Shareholders, Secured Creditors and Unsecured Creditors for amalgamation of Banswara Global Limited (wholly Owned subsidiary of BSL) and Banswara Fabrics Limited (an associate company of BSL) with your Company in Court convened Meetings held on 28th March, 2016. The Company has also filed Company Petitions before Hon''ble Rajasthan High Court, Jodhpur, for approval of scheme of amalgamation.

There is no change in the nature of Company''s business during the year as it remains in the business of manufacturing and marketing of the textile products.

Exports

During the year, the export turnover of the Company has been Rs, 580 Crores as against Rs, 526 Crores during 2014-15. The share of export turnover in the net income has increased from 43% in 2014-15 to 46% during 2015-16.

During the year under report, the Company''s marketing as well as design and development teams continued to participate in the international trade fairs, meetings with the customers abroad for regular feedback of market trends, demand, etc. in the international market.

Dividend

Your Directors are pleased to recommend dividend of '' 2 per equity share (previous year Rs, 1/- per share). The total dividend payout on Equity shares for the year will absorb Rs, 3.39 Crores (previous year - Rs, 1.64 Crores) and Rs, 0.69 Crore by way of tax on dividend (previous year - Rs, 0.33 Crore).

The Company has transferred unclaimed dividend amount to the investor Education and Protection Fund for dividend declared up to the year 2007-08.

Increase in paid-up share capital

The Board had, in its meeting held on 13th November, 2013, issued 16,00,000 warrants to promoters and promoters'' group, convertible into an equal number of equity shares, at the price of '' 41.50 per warrant including premium of '' 31.50 per share.

Out of the warrants issued to the promoters and promoters'' group, your directors had converted 10,90,000 warrants into equal number of Equity Shares up to 31st March, 2015. On 8th May, 2015, balance 5,10,000 warrants were also converted into equal number of Equity Shares.

The Company has forfeited 27,015 partly paid up Equity shares on 27th May, 2015 due to nonpayment of call money due thereon.

The paid up equity share capital of the Company has increased from Rs, 1643.14 lacs as on 31st March, 2015 to Rs,1,692.93 lacs as on 31st March, 2016 due to conversion of above warrants into equity shares.

Expansion, diversification and modernization

During the year, the Company invested Rs, 30.29 Crores for acquisition of fixed assets as at 31st March, 2016, the capital-work-in progress stood at Rs, 7.86 Crores and advances to the capital goodsRs, suppliers aggregated Rs, 3.05 Crores, as against Rs, 10.04 Crores and Rs, 1.85 Crores respectively at the beginning of the year.

The total production capacity of the Company as at 31st March, 2016 for yarn production is 151672 ring spindles including 21120 spindles for worsted yarn spinning and 592 Air Jet spindles, 368 shuttle less looms, 34 Air Jet jacquard looms, 8 stenters with processing capacity of 5 million mtrs. per month and 3.82 lac pieces of garments per month.

Subsidiaries, Joint Ventures and Associates

In accordance with the General Circular, issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary, Joint Venture and Associate Company are not being attached with the Balance Sheet of the Company. However, Pursuant to Section 129 of the Companies Act, 2013, the financial information of the subsidiary Company is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who requests for the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary company. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiary, J.V. and Associate Companies.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of the subsidiary, joint venture and Associate companies in Form AOC-1 is furnished as Annexure I to this Report.

The Company has framed a policy for determining Material Subsidiaries, which has been uploaded on the Company''s website.

Subsidiary

Banswara Global Ltd. (BGL) is a wholly owned subsidiary company of Banswara Syntex Ltd.

During the year, Banswara Global Ltd. produced 47.15 lac mtrs. of fabric (previous year 43.32 lac mtrs.) on job work basis for your Company. Total turnover of BGL during 2015-16 was Rs, 931 lacs and the net profit after tax was Rs, 2.45 lacs.

Joint Venture

Your Company holds 50% of the paid up share capital in JV company i.e. Treves Banswara Private Limited. The balance 50% of share capital is held by Treves Textiles & Seats Components, France.

During the year 2015-16, Treves Banswara Private Limited produced 4.82 lac mtrs. of Laminated Fabric and 0.35 lac pcs. of Embossed Panels and Flex. Total turnover of this JV company during 2015-16 was Rs, 1118 lacs (previous year Rs,622 lacs).

Associates

The Company has an associate company namely Banswara Fabrics Ltd. (BFL). Your Company holds 39.13% of the paid up share capital of BFL.

During the year, this associate company produced 10.25 lac mtrs. of fabric. Total turnover of BFL during the year has been Rs,322 lacs and the net profit after tax has been Rs, 16.89 lacs.

Thermal Power Plant

The two units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is consuming coal from domestic sources as well from imports.

Finance

During the year 2015-16, the Company got disbursement of long term loan of Rs, 4.50 Crores from IDBI Bank, Rs, 0.80 Crore from Punjab National Bank and Rs, 5.32 Crores from Union Bank of India for acquisition of fixed assets. The repayments of term loans made during the year aggregated Rs, 63.50 Crores.

The Company''s bankers have been providing need-based working capital after the review of requirements from time to time.

Consolidated Financial Statements

In accordance with the (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures and also as per Section 129 of the Companies Act, 2013, the audited Consolidated Financial Statements are furnished in the Annual Report.

Contribution to Exchequer

During the year, your Company contributed Rs, 26.62 Crores to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

Corporate Governance/Management Discussion & Analysis Report

As per Clause 49 of the Listing Agreements with the Stock Exchanges and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Code of Conduct which is applicable to the members of the Board, Key Managerial Personnel (KMP) and Senior Management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements and SEBI (LODR) Regulations, 2015, Corporate Governance Report and Management Discussion & Analysis Report; these are annexed and form part of this report as Annexure-II.

Fixed Deposits

As per the provisions of the Companies Act, 2013, the Company has invited fixed deposits from members of the Company as approved by the shareholders in their meeting held on 12th September, 2015. The Company had such deposits aggregating Rs, 1175 lacs as on 31st March, 2016. There has been no default in repayment of deposits or interest thereon and no deposit is unclaimed or matured but not paid as on 31st March, 2016. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 2014.

Corporate Social Responsibility Initiatives

As a part of its initiatives under ''''Corporate Social Responsibility" (CSR), the Company has formed Corporate Social Responsibility Policy (CSR Policy) in terms of which, the Company has undertaken projects in the areas of environment, women and children empowerment, health, etc. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.

As required under Section 134 (3) (o) and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, the annual report on CSR activities, forming part of the Directors Report, is annexed as Annexure III.

Risk Management

The risk assessment and minimization procedures are in place and the Board is regularly informed about the business risks and the steps taken to mitigate the same.

Pursuant to requirement of Clause 49 of the Listing Agreements, the Company had constituted Risk Management Committee which was dissolved by the Board of Directors at their Meeting held on 11th February, 2016 as the same is not legally mandatory and the matter is fairly regularly discussed at the Board level.

Internal Control System and its adequacy

The Company has internal control system commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence of the audit, the Chief Internal Auditor reports to the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies at all locations of the Company and its Subsidiary and associate companies. Based on the reports of the internal auditors, the process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The report on major observation of internal auditors and action taken thereon is regularly reported to Audit committee on a quarterly basis.

Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Vigil Mechanism/Whistle Blower Policy to provide a vigil mechanism to its Directors and employees to report their concerns about unethical, behavior, actual or suspected trend of company''s code of conduct . The details of the policy is explained in the Corporate Governance Report and also posted on website of the Company at www.banswarasyntex.com

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance policy for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under.

The Company has not received any complaint on sexual harassment of women at work place during the financial year 2015-16.

Directors and Key Managerial Personnel

During the financial year 2015-16, Shri P. K. Bhandari (DIN: 00021923), Director, has resigned from the Board of Directors of the Company. His resignation was accepted by the Board in its Meeting held on 14th August, 2015. The Board wishes to place on record its deep appreciation for the contribution made by Shri P. K. Bhandari during his tenure as a member of the Board of Directors of the Company.

Shri Arun Agarwal (DIN: 00194010) a fellow member of Institute of Chartered Accountants of India was appointed as an additional Director by the Board of Directors of the Company, in their Meeting held on 4th November, 2015, to hold office till the next AGM. However, Shri Arun Agarwal has since resigned from Directorship of the Company due to his pre- occupation with others. The Board has accepted his resignation at its meeting held on 23rd May, 2016.

Shri Shaleen Toshniwal (Din: 00246432), Joint Managing Director of the Company is liable to retire by rotation pursuant to provisions of the Companies Act, 2013 and Articles of Association of the Company. He would retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment. The Board has decided to re-appoint him and, accordingly, an agenda item has been proposed in the notice to the shareholders for their approval.

A brief resume and other information required under Clause 49 of the Listing Agreements is included in the Annual Report/ Notice of Annual General Meeting. The Board recommends his re-appointment.

The Company has formulated a policy for performance evaluation of Independent Directors, Board, Committees and individual Directors which include criteria for performance evaluation of the non-executive independent directors and executive directors.

Declaration of Independent Directors

All Independent Directors have furnished declarations to the effect that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013, Clause 49 of the Listing Agreements and SEBI( Listing Obligations and Disclosure Requirement) Regulations, 2015.

Board evaluation

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges the Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and Individual Directors. The exercise was carried out through structured evaluation process through a questionnaire sent to all Directors followed by discussions in specific manner covering various aspects of the Board''s functioning such as its composition of the Board and Committees, effectiveness of the process etc.

Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman and Whole Time Directors on specific parameters such as attendance, contribution, independent judgment, safeguarding the interest of minority shareholders etc.

The evaluation of independent Directors was carried out by the Executive Directors. The Board of Directors expressed its satisfaction on the evaluation process.

Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for appointment of Directors, Key Management personnel and Senior Management and as also their remuneration. The Remuneration Policy is stated in the Corporate Governance Report and also posted on the website of the Company at www.banswarasyntex.com.

Related party transactions

All related party transactions executed during the financial year were carried out on an Arms'' Length basis and were carried out in the ordinary course of business.

Details of all related party transactions are reported to the Audit Committee and the Board for approval. The approval of the shareholders for related party transactions was also obtained in the Annual General Meeting of the Company held on 12.9.2015. The particulars of the contracts or arrangement enter into with related parties referred to in sub section (1) of Section 188 are indicated in Form AOC 2 which, forms part of this report as Annexure IV.

Board Meetings

Four meetings of the Board of Directors were held during the year i.e. on 27th May, 2015, 14th August, 2015, 4th November, 2015 and 11th February, 2016. Frequency and quorum, etc. at these meetings were in conformity with the provisions of the Companies Act, 2013.

Directors'' responsibility statement

As required under Section 134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) In the preparation of the annual accounts for the year ended March 31, 2016, the applicable Accounting Standards have been followed and there are no material departures from the same. The Notes to the Accounts are self-explanatory.

(b) The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

(d) The Directors have prepared the annual accounts of the

Company for the year ended March 31, 2016 on a "going concern" basis.

(e) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively.

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

Audit Committee

In accordance with the requirement of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which comprises 3 (three) Independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr. S.B. Agarwal besides Shri Ravindra Kumar Toshniwal, Managing Director, as members.

The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges and are furnished in Corporate Governance Report annexed hereto as Annexure II.

Auditors

Statutory Auditor

Kalani & Company, Chartered Accountants, Jaipur, were appointed as Statutory Auditors of the Company, for 3 years

i.e. 2014-15 to 2016-17, by the shareholders in their meeting held on 22.09.2014 subject to ratification of the appointment by the members at every General Meeting held thereafter. Accordingly, they hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that their re-appointment, if made, would fulfill the requirements under the provisions of the Sections 139 and 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

Tax Auditor

As per the requirement of Section 44AB of the Income Tax Act, 1961, M/s Kalani & Company, Chartered Accountants, Jaipur, have been appointed as Tax Auditors of the Company for the year 2015-16. It is proposed to re-appoint them for the year 2016-17 and to fix their remuneration as per the recommendation of the Audit Committee.

Cost Auditor

The Company has re-appointed K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors of the Company for the financial year 2016-17. They have furnished a Certificate to the effect that their appointment, if made, would be in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the Company had appointed V.M. & Associates, a firm of Company Secretaries in practice to undertake the secretarial audit of the Company for the financial year ended 31st March, 2016. The report of the Secretarial Audit is annexed herewith as Annexure V. As regards auditors observations, these are self explanatory and do not call for any comments.

On the recommendation of the Audit Committee, the Board of Directors has reappointed V.M. & Associates to carry out secretarial audit for the year 2016-17.

Auditors'' report

As regards the Statutory Auditors'' observations, the relevant Notes on Significant Accounting Policies, Notes on Accounts and other disclosures are self-explanatory and therefore, do not call for any further comments, except in the matter of nonpayment of Custom Duty of ''267.24 lacs for which the matter is under appeal before CESTAT, Ahmadabad and at Rajasthan High Court, Jodhpur. In addition to this, nonpayment of Income Tax of ''4.96 lacs for which the matter is under appeal with CIT (Appeals), Udaipur.

These liabilities will be met, if necessary, on final decision of the respective Appellate Authorities.

Particulars of loan given, investment made, guarantee given and security provided

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

Energy conservation, technology absorption & foreign exchange earnings and outgo

Information pursuant to the provisions of Section 134 (3) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, is annexed and marked Annexure VI, which forms part of this report.

Insurance

All the properties including buildings, plant and machinery and stocks have been adequately insured.

Dematerialization of shares

In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 98.18% shares have been converted into demat form up to 31st March, 2016, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN - INE 629 D01012. Particulars of employees

During the year under report, the relations between the Company''s management and staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

The information pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, of the employees is annexed as Annexure - VII.

Further pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure - VIII.

Significant and material orders passed by the Regulators or Courts

There are no significant or material orders passed by the Regulators or Court that would impact the going concern status of the Company and its future operations.

Extract of annual return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed as Annexure IX.

Acknowledgements

Your Directors wish to express their sincere appreciation for the guidance, co-operation and assistance extended to the Company by the financial institutions, banks, various Central

& State Government Departments, Customers and Suppliers during the year under report. The Directors, particularly, wish to acknowledge and place on record the continuous support and guidance of all the shareholders and, more importantly, the confidence reposed on the Company''s management.

For and on behalf of the Board

R. L. TOSHNIWAL

Place: Mumbai CHAIRMAN

Date: 23rd May, 2016 DIN: 00106933


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 38th Annual Report of the Company together with its Audited Accounts for the year ended 31st March, 2014.

FINANCIAL REVIEW

(Rs. in Lacs)

This year Previous year 2013-14* 2012-13

Gross lncome 123076 113044

Net Income 121220 109632

Profit before Interest, extra- 18131 15507 ordinary items, depreciation & tax

Prof it before depreciation & tax 10001 7277

Less: Depreciation 5196 5168

Prof it before tax 4805 2109

Tax on Income 2142 902

(a) Current Tax (Net of MAT Credit of (112.27 lacs) (previous year Rs. 142 lacs) 1458 323

(b) Deferred Tax 625 559

(c) Prior period tax 59 20

Profit after Tax 2663 1207

Dividend on Equity and Preference Shares 470.53 226.31

Tax on Dividend 79.96 36.71

Earning per share (Rs. ): Basic 16.86 8.14

Diluted 16.30 8.14

Rs. 1000 Lacs (Previous Year Rs. 500 Lacs) have been transferred to General Reserve out of Surplus.

*Stand alone working performance of the Company (without consolidation), there was no subsidiary company in 2012-13.

OPERATIONS

The production of yarn during 2013-14 has been 301 lac kgs. as against 310 lac Kgs. during 2012-13. During the year, the Company started production of cotton yarn and produced 18.73 lac Kgs. The production of worsted yarn has increased from 10.19 lac kgs. in 2012-13 to 11.19 lac kgs. in 2013-14. Your Company has almost maintained the fabric production at around 360 lac mtrs. while the garment production has increased by 28% over the year.

During the year, your Company''s net income from operations aggregated Rs. 1212 crore as against Rs. 1096 crore in 2012-13- an increase of 11%. The Company''s turnover in value terms has increased by 1 % for yarn, 9% for fabric and 39% lor garments. This confirms Company''s major thrust on sale of value added fabrics and the readymade garments.

Your Company has earned profit before interest, depreciation and tax (PBIDT) at Rs. 181 crore as against Rs. 155 crore during 2012-13. Similarly, the profit before depreciation and tax (PBDT) has been Rs. 100 crore as against Rs. 73 crore for the previous year. The post tax net profit of the company at Rs. 26,63 crore was higher by 121% over Rs. 12.07 crore for 2012-13 during the year, The basic and diluted EPS for the year 2013-14 works out to Rs. 16.86 and Rs. 16.30 respectively as against Rs. 8.14. (basic and diluted) for 2012-13.

EXPORTS

During the year, the export turnover of the company has been Rs. 605 crore as against Rs. 599 crore during 2012-13. Although the Company recorded export growth of 14% in fabric and 29% in garments.

During the year under report, the Company''s marketing as well as design and development team continued to participate in the international trade lairs, meetings with the customers abroad for regular feed back of trends, demand etc. in the international market. The Company has added some more new customers Worldwide. Its design studio for fabric and garments continued to help the Company to penetrate in the new areas/customers, both domestically and internationally.

DIVIDEND

Your Directors are pleased to recommend dividend of Rs. 3.00 per equity share. The Company has to make payment of 3% dividend on preference shares. The total dividend payout on Equity and Preference shares for the year will absorb Rs. 4.71 crore (previous year: Rs. 2.26 crore) besides Rs. 0.80 crore previous year Rs. 0.37 crore by way of tax on dividend.

INCREASE IN AUTHORIZED SHARE CAPITAL

The Board of Directors of the Company issued 600000 equity shares of Rs. 10/- each at a premium of Rs. 31.50 per share to a foreign company, on preferential basis, on 13th November, 2013. The Board, in the same meeting, also issued 1600000 warrants to promoters and promoters'' group, convertible into an equal number of equity shares, at the price of Rs. 41.50 per warrant including premium of Rs. 31.50 per share.

Out of the warrants issued to the promoters and promoters'' group, your directors have converted 170000 warrants into an equal number of Equity Shares on 12th February, 2014. As on date. 1430000 warrants still remain to be converted into an equal number of equity shares before 11.05.2015.

The paid up equity share capital of the Company stands increased from Rs. l475.64 lacs as on 31st March 2013 to Rs. 1552.64 lacs as on 31st March, 2014 due to issuance of these shares.

Both the above mentioned preferential issues were made as per the SEBI (ICDR) Regulations, 2009.

EXPANSION, DIVERSIFICATION AND MODERNIZATION

During the year, the Company invested Rs. 53.30 crore for acquisition of fixed assets;. As at 31st March, 2014 the capital- work-in progress stood at Rs. 8.54 crore and advances to the capita! goods'' suppliers aggregated Rs. 4.54 crore, as against Rs. 7.77 crore and Rs. 4.32 crore respectively as at the beginning of the year. Capacity expansion has taken place by adding 30 looms in weaving section and one line for trousers in garment division. Similarly, in the fabric processing unit, few more balancing machines viz. one continuous scouring and bleaching range, one continuous crabbing machine, one stenter of 8 chambers and one padding machine have been added.

The total production capacity of the Company as at 31st March, 2014 for yarn production is 151672 ring spindles including 21120 spindles for worsted yam spinning, 12096 spindles for cotton yarn, 592 Air Jet spindles, 380 shuttle less looms, 33 Air Jet jacquard looms, 8 stenters with processing capacity of 5 million mtrs. a month and Rs. 3,75 lac pieces of garments per month.

The Company has plans to invest about Rs. 25 crore for expansion and modernization of the plant during the year 2014-15. This would mainly add 4 lines for trousers and one line for jackets for garment section, modernization of inspection and packing for fabric, besides balancing equipment in dye house and spinning sections.

JOINT VENTURE

The Company has a Joint Venture namely Treves Banswara Private Limited with Treves S.A. France. The Company holds 50% of the share capital in the joint venture.

During the year Treves Banswara Private Limited, produced 2.49 lac mtrs. of Laminated Fabric. The JV company has also started produdion of Cut Panels, Embossed Panels and Flex and has produced 24200 pcs. of these qualities during 2013-14; total turnover of the JV company during the year aggregated Rs. 645 lacs.

The Company had another joint venture with Carreman, France. Both the Companies had 50;50 Equity Share in Carreman Fabrics India Limited CFIL. The Joint venture agreement dated 17th February, 2006 was terminated vide JV termination agreement dated 06.08.2013. Your company has purchased 60% of the equity shares held by Carreman, France. As such CFIL has become subsidiary company w.e.f. 19.10.2013. The Board of Directors of CFIL has since changed its name to Banswara Global Limited.

THERMAL POWER PLANT

The Company''s both units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is consuming coal from domestic sources as well from imports. The power plants availability factor during the year 2013-14 was 98.09% as against 97.70% during 2012-13.

FINANCE

During the year 2013-14, to augment the long term resources for meeting the Working Capital requirements, the Company requested and obtained Working Capital Term Loan of Rs. 21 crore from Punjab National Bank and Rs. 6.85 crore from Exim Bank. Term Loans of Rs. 18.91 crore got disbursed for investment in fixed assets. The total repayment of term loan got during the year was Rs. 45.62 crore.

Your Company is now engaged in balancing of its existing production capacities to achieve higher production with improvement in quality and has therefore, applied for a term loan of Rs. 10 crore from Punjab National Bank; the sanction is awaited. The Company''s bankers have been providing need based increase(s) in working capital limits based on review of requirements from time to time.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements, read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

SUBSIDIARIES

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary Company is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary company.

Details of the subsidiary Company and its business operations during the year under review are covered in the Management Discussion and Analysis Report.

CONTRIBUTION TO EXCHEQUER

During the year, your Company contributed RS. 34.96 crore to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per Clause 49 of the Listing Agreements with the Stock Exchanges, the Company has adopted a Code of Conduct which is applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements; Corporate Governance Report and Management Discussion & Analysis Report are annexed and marked Annexure-I, which form part of this report.

FIXED DEPOSITS

The Company has not issued any advertisement inviting fixed deposits from the public. However, it continues to accept deposits from public. As on 31st March, 2014, the Company had such deposits aggregating Rs. 1353.70 lacs. Deposits which matured during the year were either renewed or repaid. All the interest and principal dues are being paid regularly. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 1975.

The provisions relating to the acceptance of fixed deposit have been changed by the Companies Act, 2013 and, accordingly, now, before accepting any deposit from member of the Company or from public, the Company must comply with the provisions of the new Act, which includes shareholders'' approval, issuance of circular to its members obtaining credit rating from independent agency etc. The Company shall comply with these requirements before acceptance of new deposits.

DIRECTORS

During the year, the Export Import Bank of India has withdrawn the nomination of Shri C. P. Ravindranath from the Board. The tenure of Shri R. L. Toshniwal, Chairman, Shri Ravindra Kumar Toshniwal, Managing Director, Shri Rakesh Mehra, Vice Chairman and Shri Shaleen Toshniwal, Jt. Managing Director is expiring on 31st December, 2014. Based on the recommendation of the Nomination and Remuneration Committee, the Board has decided to re-appoint them for a further period of 3 years from 1st January 2015 to 31st December, 2017 subject to approval of the shareholders in the Annual General Meeting.

Shri R.L. Toshniwal, Chairman of the Company whose period of office is liable to retire by rotation pursuant to provisions of Company Act, 2013 and Articles of Association of the Company retires by rotation at the ensuring AGM and being eligible offers himself for re-appointment.

Further, Shri P. Kumar, Shri A.N. Jariwala, Shri Kamal Kishore Kacholia, Shri Vijay Mehta, Shri D.P. Garg, Dr. S.B. Agarwal, Shri Vijay Kumar Agarwal and Shri P.K. Bhandari who were appointed as a Director liable to retire by rotation and whose term expires at this Annual General Meeting, seek your support in confirming their appointment as independent Directors of the Company not liable to retire by rotation and to hold office for a term of five years commencing from 1st April, 2014 upto 31st March, 2019.

A brief resume and other information required under clause 49 of the listing agreement is included in the Annual Report/Notice of Annual General Meeting. The Board recommends their re- appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the year ended March 31, 2014, the applicable Accounting Standards have been followed and there are no material departures from the same. The Notes to the Accounts are self-explanatory.

II. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and of the profit of the Company for the year ended on that date.

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 detecting frauds and other irregularities.

IV. The Directors have prepared the annua! accounts of the Company for the year ended March 31, 2014 on a "going concern" basis.

AUDIT COMMITTEE

In accordance with the requirement of Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which comprises 3 (three) Independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr. S.B. Agarwal besides Shri Ravindra Kumar Toshniwal, Managing Director, as members.

The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges.

AUDITORS

Statutory Auditor

Kalani & Company, Chartered Accountants, Jaipur, hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. They have furnished a Certificate to the effect that then re-appointment, if made, would fulfill the criteria and the provisions of the Section 139 and 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014. Tax Auditor As per the requirement of Section 44AB of the Income Tax Act, 1961. M/s Kalani & Company. Chartered Accountants, Jaipur, have been appointed as Tax Auditors of the Company lor the year 2013-14. It is proposed to re-appoint them for the year 2014-15 and to fix their remuneration as per the recommendation of Audit Committee.

Cost Auditor

The Central Government has approved the appointment of K.G. Goyal & Company, Cost Accountants, Jaipur for conducting Cost Audit of the company for the financial Year 2013-14.

The Cost Audit Report for the year 2013-14 shall become due for filing on 27th September, 2014. The audit work is in progress, The Company has re-appointed K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors of the Company lor the financial year 2014-15. They have furnished a Certificate to the effect that their appointment, if made, would be in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

AUDITORS'' REPORT

As regards the Auditors'' observations, the relevant Notes in Significant Accounting Policies. Notes on Accounts and other disclosures are self-explanatory and, therefore, do not call for any further comments, except in the matter of non payment of Rs. 42.03 lacs towards Service Tax and Cess thereon. The matters pertaining to service tax refunds availed by the Company are under appeal with CESTAT, New Delhi and Commissioner Appeal, Jaipur, Rajasthan. In addition to this the issues of non payment of Excise duty of Rs. 209.75 lacs and custom duty of Rs. 1.70 lacs are under appeal before CESTAT, New Delhi, Commissioner appeal, Jamnagar. Gujarat and at Mumbai High Court.

These liabilities will be met, if necessary, on final decision of the respective Appellate

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to the provisions of Section 217(1 )(e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure '' II'', which forms part of this report.

DEMATERIALIZATION OF SHARES

In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to Irade the shares in the demat form. In response, 97.71% shares have been converted into demat form up to 31st March, 2014, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN INE 629 D01012.

PARTICULARS OF EMPLOYEES

During the year under report, the relations between the Company''s management and staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

As required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees of the Company who were in receipt of remuneration of Rs. 5,00,000/- per month or more are annexed and marked Annexure ''III,'' which forms part of this report.

ACKNOWLEDGMENTS

Your Directors wish to express their sincere appreciation for the guidance, co-operation and assistance extended to the Company by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under report. The Directors particularly wish to place on record acknowledge the continuous support and guidance of all the shareholders and, more importantly, the confidence reposed in the Company''s management.

For and on Behalf of the Board

Place:Mumbai R.L.TOSHNIWAL Date:24th May, 2014 Chairman DIN:00106933


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 37th Annual Report of the Company together with its Audited Accounts forthe year ended 31s''March, 2013.

FINANCIAL REVIEW

(Rs. in Lacs)

This year Previous year 2012-13 2011-12

Grosslncome 1,13,044 96,727

Net Income 1,09,632 92,384

Profit before Interest, extra- ordinary items, depreciation & tax 15,507 13,561

Profit before depreciation & tax 7,277 6,041

Less: Depreciation 5,168 4,311

Profit before tax 2,109 1,730

Tax on Income 902 241

(a) Current Tax 323 (Net of MAT Credit of Rs. 142 lacs) (Previous Year Rs. 349.34 lacs)

(b) Deferred Tax 559 241

(c) Prior period tax 20

Profit after Tax 1,207 1,489

Dividend on Equity and Preference Shares 226.31 226.31

Tax on Dividend 36.71 36.71

Earning per share(Rs.): Basic & Diluted 8.14 10.06 Rs. 500 Lacs ( Previous Year Rs. 1500 Lacs) have been transferred to General Reserve out of Surplus

OPERATIONS

During the year, the production of Synthetic yarn increased to 301 lac Kgs, up by 8%; however, due to demand recession for worsted fabric, the worsted yarn production reduced by 27% in comparison to the year 2011-12. Production of garments increased by 17% to 25.55 lac pieces. During the year, the Company produced more of value added fabric and technical textiles. The production of fabric increased by 16% to 360 lac meters. The Company has started production of cotton yarn, cotton yarn dyed shirting and piece-dyed suiting fabric also.

During the year, the Company''s net income from operations aggregated Rs.1096 crores as against Rs.924 crore in 2011-12-an increase of 19%. The Company''s turnover in value terms has increased by 16% for yarn, by 20% for fabric and by 27% for garments. This confirms the Company''s major thrust on value- added fabrics and the readymade garments.

During the year, the textile industry continued to face global recession but your company''s profit before interest, depreciation and tax (PBIDT) for 2012-13 improved to Rs.155 crore as against Rs.136 crore in 2011-12. Similarly, the profit before depreciation and tax (PBDT) was higher at Rs.73 crore as against previous year''s Rs.60 crore, mainly due to increased production and sales. However, inspite of better performance at PBT level, the net profit of Company at Rs. 12.07 crore during 2012-13 is lower than Rs. 14.89 crore achieved in the year 2011-12, mainly because of higher provision for tax liability.

The basic and diluted earnings per share works out to Rs.8.14 for the year 2012-13 as against previous year''s EPS at Rs. 10.06.

EXPORTS

During the year, the export turnover was at Rs.599 crore was up by about 13% over Rs.531 crore during 2011-12. The growth happened in all the 3 segments viz. yarn, fabric and garments.

During the year under report, the Company''s marketing as well as design and development team continued to collect the feed- back in the international market by participation in the international trade fairs, meetings with the customers, etc. The Company has added some more new customers Worldwide. Its design studio for fabric and garments helped the Company to penetrate in the new areas/customers, both domestically and internationally.

DIVIDEND

Your Directors are pleased to recommend dividend of Rs.1.50 per equity share i.e. the same as for the previous year. The total dividend payout on Equity and Preference shares for the year will absorb Rs.2.26 crore (previous year: Rs.2.26 crore) besides Rs.0.37 crore by way of tax on dividend. The Company has to make payment of 3% dividend on preference shares.

INCREASE IN AUTHORIZED SHARE CAPITAL

There has been no increase in equity and preference share capital during the year.

EXPANSION, DIVERSIFICATION AND MODERNIZATION

During the year, the Company has invested Rs.79.50 crore for acquisition of fixed assets including the capital-work-in progress at Rs.7.77 crores and advances aggregating Rs.4.32 crore as at 31st March, 2013 to the capital goods'' suppliers. Capacity expansion has taken place in all the areas of operations. The worsted spinning capacity increased by 8256 spindles besides addition of 19 looms in weaving section, and one line each for trousers and jackets production in garment division. Similarly, in the fabric processing unit also, few more balancing machines viz. one mercerizing, 6 jet and jiggars, one calendar, and one sizing machine have been added.

The total production capacity of the Company as at 31st March, 2013 for yarn production is 151672 ring spindles including 21120 spindles for worsted yarn spinning, 592 Air Jet spindles, 359 shuttle less looms, 32 Air Jet jacquard looms, 7 stenters with processing capacity of 5.0 million meters a month and 3.45 lac pieces of garments per month.

The Company has plans to invest about Rs.20 crore for expansion and modernization of the plant during the year 2013-14. This would add 21 looms and balancing equipment. Under the plan, the Company has proposed to replace 1 stenter in finishing unit which will increase fabric finishing capacity by 4 lac meters a month.

JOINT VENTURE

The Company has two Joint Ventures with two French Companies i.e. Carreman and Treves S.A. The Company holds 50% share capital both in Carreman Fabrics India Limited and Treves Banswara Private Limited.

Carreman Fabrics India Limited has a Weaving Unit doing Fabric Production on job work basis for your Company. It has woven 54.76 lac meters during 2012-13 as against 62.77 lac meters during 2011 -12. The production is low due to reduction in looms and lower utilization of available looms capacity.

Treves Banswara Private Limited manufactures Laminated, Knitted and Woven Textiles for internal furnishing of Trains, Buses and other Automobiles. 2012-13 was its first year of operation. The Company produced 1.52 lac meters laminated fabric and achieved turnover of 7633 lac during the year.

THERMAL POWER PLANT

The Company''s both units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is consuming imported coal, Lignite, Petcoke and Indian coal. The power plant availability factor during the year 2012-13 was 97.70% as against 95.01 % during 2011 -12.

FINANCE

During the year 2012-13, the IDBI Bank Ltd. sanctioned Term Loans aggregating 719.20 crore (Disbursed so far- 714.95 crore) to part finance the Company''s expansion- cum-modernization project of 724.62 crore. The Export Import Bank of India and Bank of Baroda have also disbursed balance amounts of 77.60 crore and 77.15 crore out of their Term Loans of 729 crore and 744 crore respectively. The Company has also applied for another term loan of 716 crore from Bank of Baroda to part finance its proposed expansion-cum- modernization project of 720 crore.

The Company''s bankers have provided the need-based increased working capital limits during the year.

CONTRIBUTION TO EXCHEQUER

During the year, your Company contributed 747.60 crore to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

SUBSIDIARY COMPANY

The Company did not have any subsidiary as on 31" March, 2013. However, it has 50% stake in equity capital of Carreman Fabrics India Ltd. and Treves Banswara Pvt. Ltd., Joint Venture Companies with Carreman and Treves S.A., both of France.

CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per Clause 49 of the Listing Agreements with the Stock

Exchanges, the Company has adopted a Code of Conduct which is applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements; Corporate Governance Report and Management Discussion & Analysis Report are annexed and marked Annexure-I, which form part of this report.

FIXED DEPOSITS

The Company has not issued any advertisement inviting fixed deposits from the public. However, it continues to accept deposits from public. As on 31 *" March, 2013, the Company had such deposits aggregating 71249.60 lacs. Deposits which matured during the year were either renewed or repaid. All the interest and principal dues are being paid regularly. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In accordance with the provisions of Articles of Association of the Company, Shri P. Kumar, Shri P.K. Bhandari and Shri D.P. Garg are retiring by rotation and, being eligible, offer themselves for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the year ended March 31,2013, the applicable Accounting Standards have been followed and there are no material departures from the same. The Notes to the Accounts are self-explanatory.

II. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31sl March, 2013 and of the profit of the Company for the year ended on that date.

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 detecting frauds and other irregularities.

IV. The Directors have prepared the annual accounts of the Company for the year ended March 31, 2013 on a "going concern" basis.

AUDIT COMMITTEE

In accordance with the requirement of Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which comprises 3 (three) Independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Shri S.B. Agarwal besides Shri Ravindra Kumar Toshniwal Managing Director as members.

The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges.

AUDITORS

Statutory Auditor

Kalani & Company, Chartered Accountants, Jaipur, hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. They have furnished a Certificate to the effect that the re-appointment, if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956.

Cost Auditor

The Central Government has approved the appointment of K.G. Goyal & Company, Cost Auditors, for conducting Cost Audit for the financial Year 2012-13.

The Cost Audit Report for the year 2012-13 shall become due for filing on 27* September, 2013. The audit work is in progress.

The Company has appointed K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors of the Company for the financial year 2013-14. They have furnished a Certificate to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956.

AUDITORS'' REPORT

As regards the Auditors'' observations, the relevant Notes in Significant Accounting Policies, Notes on Accounts and other disclosures are self-explanatory and, therefore, do not call for any further comments, except in the matter of non payment of Rs.27.05 lacs towards Service Tax and Cess thereon. The matter pertaining to service tax refunds taken by the Company are under appeal with CESTAT, New Delhi and Commissioner Appeal, Jaipur, Rajasthan.

These liabilities will be met, if necessary, on final decision of the respective Appellate Authorities.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure ''II'', which forms part of this report.

DEMATERIALIZATION OF SHARES

In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 97.49% shares have been

converted into demat form up to 31s'' March, 2013, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN - INE 629 D01012.

PARTICULARS OF EMPLOYEES

During the year under report, the relations between the Company''s management and its staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

As required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees of the Company who were in receipt of remuneration of 5,00,000/- per month or more are annexed and marked Annexure ''III,'' which forms part of this report.

ACKNOWLEDGEMENTS

Your Directors wish to express their grateful appreciation for the guidance, co-operation and assistance extended to the company by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under report. The Directors particularly acknowledge the continuous support and guidance of all the shareholders and, more importantly, for the confidence reposed in the Company''s management.

For and on behalf of the Board

Place: Mumbai R. L. TOSHNIWAL

Date: 24th May, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present the 36th Annual Report of the Company together with its Audited Accounts for the year ended 31st March, 2012.

FINANCIAL REVIEW

The financial performance of the Company for the year ended 31st March, 2012 is summarized below.

(Rs. in Lacs)

This year Previous year 2011-12 2010-11

Gross Income 96,728 83,805 Net Income 92,384 80,850 Profit before Interest, extra- ordinary items, depreciation & tax 13,561 13,899 Profit before extra-ordinary items,

depreciation & tax 6,041 9,509

Profit before depreciation & tax 6,041 9,653

Less: Depreciation 4,311 3,402

Profit before tax 1,730 6,251

Tax on Income 241 1,558

(a) Current Tax - 1,264 (Net of MAT Credit of Rs. 349.34 lacs)

(Previous Year Rs. 35.71 lacs)

(b) Deferred Tax 241 294

Profit after Tax 1,489 4,693

Dividend on Equity and Preference Shares 226 788

Tax on Dividend 37 72

Earning per share (Rs): Basic 10.06 32.05

Diluted 10.06 31.79

Rs.1500 Lacs (Previous Year Rs. 3500 Lacs) have been transferred to General Reserve out of Surplus

OPERATIONS

During the year 2011-12, the production of Synthetic yarn increased to 279 lac Kgs, up by 2% and that of worsted yam increased to 14.02 lac Kgs, up by 16%. Production of garment increased by 7% to 21.93 lac pieces. During the year the Company produced more of value added fabrics and technical textiles. However, the overall production of fabric at 311 lac meters was down by 4%. Over the previous year the Company has started production of shirting fabric also.

During the year the Company's net income from operations at Rs. 924 crore recorded growth of 14% over Rs. 809 crore in 2010-11. The Company's turnover in value for yarn increased by 13%, fabric by 14% and garments by 29%. This confirms the Company's thrust on value-added fabrics and readymade garments.

During the year, the textile industry faced global recession and the Indian currency witnessed sharp fluctuations in its valuation against US Dollars. The finance cost during the year also increased substantially. The profit before interest, depreciation and tax for F.Y. 2011-12 was Rs. 136 crore as against Rs. 139 crore

in 2010-11. The profit before depreciation and tax has been Rs. 60 crore as against previous year's Rs. 97 crore. The reduction is mainly attributed to the additional finance cost. In the wake of higher quantum and increase in interest rate on borrowings besides withdrawal of subvention. The net profit after tax at Rs. 14.89 crore is almost one third of Rs. 46.93 crore for 2010-11. The Company has paid 1349 lacs, (Previous Year Rs. 1,300 lacs) as income tax besides providing Rs.241 lacs as deferred tax liability for the year under report.

The basic and diluted earnings for the year 2011 -12 works out to Rs. 10.06 per share as against previous year's EPS at Rs. 32.05 and Rs. 31.79 respectively.

EXPORTS

During the year, the export turnover excluding export benefits was at Rs. 472 crores as against Rs. 461 crores during 2010-11, up by about 2.37%. The growth took place in all the 3 segments of yarn, fabric and garments. The export performance of the Company was adversely affected by the sharp fluctuations in exchange rate of Indian rupee against US Dollar.

During the year under report, the Company's marketing as well as design and development teams collected the feed-back in the international market by participation in the international trade fairs, meetings with the customers, etc. The Company has added few more new customers World wide. Its design studio for fabric and garments helped the Company to penetrate in the new areas/customers domestically and internationally.

DIVIDEND

Your Directors now pleased to recommend dividend of Rs. 1.50 per equity share against the previous year's total dividend of Rs.5/- per equity share of Rs. 10/- each. The total dividend payout for the year will absorb Rs. 221 lacs (Previous Year Rs. 733.45 lacs) besides Rs. 36.71 lacs by way of tax on dividend. The Company is also to pay 3% dividend on preference shares.

INCREASE IN AUTHORIZED SHARE CAPITAL

There has been no increase in equity and preference share capital during the year.

EXPANSION, DIVERSIFICATION AND MODERNIZATION

During the year the Company has invested Rs. 82.64 crore for acquisition of fixed assets, besides the capital-work-in progress at Rs. 25.67 crore and advances to the capital goods' suppliers at Rs. 7.76 crore as at 31st March, 2012. Capacity expansion has taken place in all the areas of operations. The ring spinning capacity increased by 2004 spindles, besides addition of 112 looms in weaving section; one mercerizing machine and one Raising machine have been installed in finishing house and one line each has been added for production of Trousers and Jackets. The Company discarded/sold 4908 spindles, 144 Airjet spindles and 12 looms during the year.

The total production capacity of the Company as at 31M March, 2012 for yarn production is 143416 ring spindles including 14400 spindles for worsted yarn spinning, 592 Air Jet spindles, 340 shuttle less looms, 28 Air Jet jacquard looms, 7 stenters with processing capacity of 5 million meters a month and 2.95 lac pieces of garments per month.

The Company has plans to invest about Rs. 34 crore for expansion and modernization of the plant during the year 2012-13. This would add 8256 ring spindles, 6720 worsted spindles, 30 looms and some yarn dyeing machines to increase yarn dying capacity by 2 MT per day.

JOINT VENTURE

Carreman Fabrics India Ltd. the Joint Venture (JV) Company has a weaving unit having installed capacity of 60 Rapier Looms of its own along with 17 additionally installed looms of your Company in its premises. Your Company has 50% stake In JV's equity share capital with an equal stake of Carreman, France.

During the year 2011-12, JV Company produced 62.77 lacs meters of gray fabric as against 64.83 lacs meters in the previous year. The net profit during the year 2011-12 increased to Rs. 29.21 lacs as against Rs. 24.13 lacs up by 21%.

Your Company, as a measure of further diversification of business, has entered into another Joint Venture agreement with Treves S.A., France with 50:50 partnership and incorporated a Special Purpose Vehicle (SPV) to be known as "Treves Banswara Pvt. Ltd." The JV Company will produce laminated knitted and woven textiles for internal furnishing of trains, buses and other automobiles.

POWER PLANT

The Company's two units of Captive Thermal Power Plant of 33 MW capacity are working satisfactorily. The Company is mainly consuming imported Coal for these power plants. It has also signed a fuel supply agreement with South Eastern Coalfields Limited (SECL) for purchase of Indian Coal. The Company has also purchased lignite from Rajasthan State Mines and Minerals Corporation Limited (RSMM) and GMDC, Gujarat. The purchase of this coal has reduced the cost of power generation. The Company's application for sanction of Government Coal Quota for 2nd Unit of its power plant is under consideration with Ministry of Coal/Power.

FINANCE

During the year 2011 -12, the Company availed Term Loans aggregating Rs. 63.28 crore from Banks and Financial Institutions. The Company has applied for additional term loan of Rs. 19.20 crore from IDBI Bank to part finance its expansion-cum- modernization project of Rs. 34 crore.

The Company's bankers have provided the need base increased working capital limits during the year.

CONTRIBUTION TO EXCHEQUER

During the year, your Company contributed Rs. 5,810.73 lacs to the Government Exchequer by way of Excise Duty,

Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

SUBSIDIARY COMPANY

The Company did not have any subsidiary as on 31st March, 2012. However, it has 50% stake in equity capital of Carreman Fabrics India Ltd. and Treves Banswara Pvt. Ltd., Joint Venture Companies with Carreman and Treves S.A., both of France.

CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per Clause 49 of the Listing Agreements with the Stock Exchanges, the Company has adopted a Code of Conduct which is applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements; Corporate Governance Report and Management Discussion & Analysis Report are annexed and marked Annexure-I, which form part of this report.

FIXED DEPOSITS

The Company has not issued any advertisement inviting fixed deposits from the public. However, it continues to accept deposits from public. As on 31st March, 2012, the Company had such deposits aggregating Rs. 939.95 lacs. Deposits which matured during the year were either renewed or repaid. All the interest and principal dues are being paid regularly. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

Export Import Bank of India (EXIM Bank) has withdrawn the nomination of Dr. R. Swaminathan from the Board of the Company from 18.04.2012 and, in his place, nominated Shri C.P. Ravindranath as their Nominee Director on the Board of Directors of the Company. The Board wishes to place on record its deep appreciation of the contribution made by Dr.Swaminathan during the deliberations in Board meetings.

In accordance with the provisions of Articles of Association of the Company, Shri Vijay Kumar Agarwal, Shri Kamal Kishore Kacholia and Shri Vijay Mehta are retiring by rotation and, being eligible, offer themselves for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the year ended March 3,1,2012, the applicable Accounting Standards have been followed and the Notes to the Accounts are self- explanatory.

II. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31a March, 2012 and of the profit of the Company for the year ended on that date.

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 detecting frauds and other irregularities.

IV. The Directors have prepared the annual accounts of the Company for the year ended March 31, 2012 on a going concern basis.

AUDIT COMMITTEE

In accordance with the requirement of Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted (the Audit Committee which comprised as at 31.03.2012, 3(three) Independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Shri S.B. Agarwal as members. Shri Ravindra Kumar Toshniwal, Managing Director has been included into the committee w.e.f. 2131 May, 2012.

The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges.

AUDITORS

Statutory Auditor

Kalani & Company, Chartered Accountants, Jaipur, hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the re-appointment, if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956.

Cost Auditor

The Central Government has approved the appointment of the K.G. Goyal & Company, Cost Auditors for conducting Cost Audit for the financial year 2011-12.

The Cost Audit Report for the year 2011 -12 shall become due for filing on 27th September, 2012. The audit work is under process.

K.G. Goyal & Company, Cost Accountants, Jaipur, have been appointed as Cost Auditors of the Company for the financial year 2012-13. They have furnished a Certificate to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1-B) of the Companies Act, 1956.

AUDITORS'REPORT

As regards the Auditors' observations, the relevant Notes on Account are self-explanatory and, therefore, do not call for any further comments, except in the matter of non payment of Service Tax and Cess thereon of Rs. 27.05 lacs and disputed liabilities of Rs. 1.96 lacs towards the excise duty. The matter pertaining to service tax refunds taken by the Company are under appeal with CESTAT, New Delhi and Commissioner Appeal, Jaipur, Rajasthan. Excise duty demand is under appeal with Hon'ble High Court, Rajasthan & Joint Secretary, Govt, of India. Income Tax demand of Rs. 26.35 lacs on account of additions and disallowances made in the Assessment by the authority against which appeal has been filed before Commissioner of Income Tax (Appeals) Udaipur.

These liabilities will be met, if necessary, on final decision of the respective Appellate Authorities.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure 'II', which forms part of this report.

DEMATERIALIZATION OF SHARES

In pursuance of SEBI / Stock Exchange directions, your Company offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 97.41% shares have been converted into demat form up to 3181 March, 2012. The stock code number in NSDL and CDSL for equity shares of the Company is ISIN INE 629D01012.

PARTICULARS OF EMPLOYEES

During the year under report, the relations between the Company's management and its staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees of the Company who were in receipt of remuneration of Rs. 5,00,000/- per month or more are annexed and marked Annexure 'III,' which forms part of this report.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation for the co-operation and assistance extended to the company by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under review. The Directors thankfully acknowledge the continuous support and guidance of all the shareholders and, more importantly, for the confidence reposed in the Company's management.

For and on behalf of the Board

Place:Mumbai R. L. TOSHNIWAL

Date: 21st May,2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors are pleased to present the 35th Annual Report of the Company together with its Audited Accounts forthe year ended 31st March, 2011.

FINANCIAL REVIEW

(Rs. in Lacs) This year Previous year 2010-11 2009-10

Gross Income 83,801 64,683

Net Income 80,845 63,097

Profit before exceptional items, depreciation & tax 10,140 6,799

Profit before extra-ordinary items, depreciation & tax 9,509 6,799

Profit before depreciation & tax 9,653 7,407

Less: Depreciation 3,402 3,073

Profit before tax 6,251 4,334

Tax on Income 1,558 1,246

(a) Current Tax 1,300 736

(b) Deferred Tax 294 530

1,594 1,266

Less: MAT Credit Entitlement 36 20

Profit after Tax 4,693 3,088

Balance brought forward 1,044 536

Excess Dividend Amount Written Back 38 -

Amount available for appropriation 5,775 3,623

Appropriations:

Interim Dividend and Tax thereon (paid during the year) 344 229

Proposed Dividend on Preference Shares 5.19 5,19

Proposed Final Dividend on Equity Shares 439 295

Tax on Dividend 72 50

Transferto General Reserve 3,500 2,000

Balance Carried to Balance Sheet 1,415 1,044

Earning per share (Rs): Basic : 32.05 23.56

Diluted: 31.79 20.92

OPERATIONS

During the year 2010-11, your Company's performance in all the areas of operations has improved significantly. Production of synthetic yarn increased to 274 Lac Kgs., up by 7%, and that of worsted yarn increased to 12.13 Lac Kgs., up by 92%. Similarly, the production of suitings at 324 Lac Mtrs. went up by 26%. The Company's garment production also increased by about 30% to 20.45 Lac pes. The Company also made its forays in the production of technical textiles.

During the year 2010-11, the Company's net income from operations at Rs.808 Crores recorded a growth of 28% over Rs.631 Crores in 2009-10. The Company's turnover of yarn increased by 18%, fabric by 37% and garments by 36% as compared to previous year. This conforms to the Company's future business plan for a major thrust on value- added fabric and garment business.

The profit before depreciation and tax for the year 2010-11 at Rs.96.53 Crores recorded an impressive growth of about 30%.

The profit before tax and net profit for the year at Rs.62.51 Crores and Rs.46.93 Crores were up by 44% and 52% respectively over the previous years to gives. During the current financial year, the Company has provided forthe liability of entry tax and interest thereon pertaining to the financial years from 2006-07 to 2010-11. The Company has paid Rs.1300 Lacs as income tax besides providing Rs.294 Lacs as deferred tax liability forthe year under report.

The basic and diluted earning per share for the year 2010-11 works out to Rs.32.05 and Rs.31.79 respectively. (Previous year Rs.23.56 and Rs.20.92).

EXPORTS

During the year 2010-11, the export turnover at Rs.461 Crores, as against Rs.367 Crores during 2009-10, recorded an increase of 26%. Your Company recorded export growth in yarn by 31 % and fabric by 27%. The Company has maintained 65% share of export sales in the total turnover.

During the year under report the Company's marketing as well as design and development teams collected the feed-back in the international market by participation in the international trade fairs, meeting with the customers etc. The Company has added few more new customers World wide. Its design studio for fabric and garments helped the Company to penetrate in the new areas/customers domestically and internationally.

DIVIDEND

The Company has already paid interim dividend of Rs.2.00 per equity share in November, 2010. Your Directors are now pleased to recommend final dividend of Rs.3.00 per equity share. Thus, the total dividend is Rs.5.00 per equity share (Previous Year- Rs.3.50 per equity share) of Rs. 10/- each of the Company. The dividend payout for the year would aggregate Rs.733.45 Lacs besides dividend tax of Rs.120.13 Lacs. The Company has also paid 3% dividend on preference shares.

INCREASE IN AUTHORIZED SHARE CAPITAL

During the year 2010-11, the authorized share capital of the Company was increased from Rs.25 Crores divided into 2 Crores equity shares of Rs.10/- each and 5 Lacs Redeemable Preference shares of Rs.100/- each to Rs.50 Crores divided into Four Crores Fifty Lacs Equity Shares of Rs.10/- each and Five Lacs Redeemable Preference Shares of Rs.100/- each.

On 27.04.2010, the Company has converted 16,50,000 warrants (issued on preferential basis to persons other than promoters @ Rs.41/- per warrant) into equal number of equity shares. In view of this issued share capital has increased from Rs.1,310.64 Lacs to Rs. 1,475.64 Lacs.

In addition, during the year, 19160 partly paid up shares were made fully paid up, on receipt of allotment money from the concerned shareholders. In view of conversion of the above warrants and partly paid up shares into fully paid up shares, Paid up capital has increased from Rs.1,308.14 Lacs to Rs.1,474.09 Lacs.

EXPANSION, DIVERSIFICATION AND MODERNIZATION

During the year the Company has invested Rs.149.91 Crores for acquisition of fixed assets besides the capital work in progress at Rs.16.16 Crores and advances to the capital goods' suppliers of Rs.7.65 Crores as at 31st March, 2011. Capacity expansion has taken place in all the areas of operations. The Ring spinning capacity increased by 7824 spindles, Air Jet spinning by 160 spindles, besides addition of 66 looms in weaving section, 2 stenters in finishing house and 3 No. lines of production of Trousers & Jackets. The Company discarded 3768 spindles and 22 looms, 2 looms were sold during the year. Besides this, the Company's 2"" unit of Captive Thermal Power Plant of 15 MW capacity was also commissioned in March, 2011.

The total production capacity of the Company as at 31st March, 2011 for yarn production is 141412 ring spindles including 14400 spindles for worsted yarn spinning, 736 Air Jet spindles, 248 shuttle less looms, 20 Air Jet jacquard looms, 7 stenters with processing capacity of 5 million meters a month and 2.70 Lac pieces of garments per month.

The Company has plans to invest about Rs.80 Crores for expansion and modernization of the plant during the year 2011-12. This would add 18432 ring spindles, 96 looms and 2 No. lines for garments.

JOINT VENTURE

The Joint Venture (JV) Company, Carreman Fabrics India Ltd., has a fabric weaving plant of 60 Rapier Looms of its own along with 17 additionally installed looms of your Company in its premises. Your Company has 50% stake in JV's equity share capital. The JV Company manufactures fabric on job work basis for your Company, the total production during the year 2010-11 being Rs.64.83 Lacs grey meters as against Rs.65.65 Lacs grey meters in the year 2009-10. The JV Company earned net profit of Rs.24.13 lac during 2010-11 as against Rs.46.87 Lacs during 2009-10; the shortfall in the profitability is attributed to lower productivity, increase in manufacturing expenses, repairs and employee cost.

POWER PLANT

The 2nd unit of Captive Thermal Power Plant of 15 MW capacity started generation of power from 9th March, 2011. The 1st unit of Captive Thermal Power Plant is also working satisfactorily. The total power generation capacity of the Company is now 33 MW. During the year, the Company purchased coal from South Eastern Coalfields Ltd. (SECL) against the Fuel Supply Agreement. The coal purchases from SECL have reduced the cost of power generation. The Company has also applied for sanction of Govt, coal quota for the second unit of its Power Plant.

FINANCE

During the year 2010-11, the Company availed Term Loans aggregating Rs.94.67 Crores from Banks and Financial Institutions. The Company has applied for additional term loan of Rs.29 Crores to Exim Bank to part finance company's expansion cum modernization project of Rs.36.25 Crores.

The Company's bankers has provided the need base increase working capital limit during the year.

CONTRIBUTION TO EXCHEQUER

During the year, the Company contributed Rs.4,720 Lacs to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

SUBSIDIARY COMPANY

The Company did not have any subsidiary as on 31st March, 2011. However, it has 50% stake in equity capital of Carreman Fabrics India Ltd., a Joint Venture Company between Banswara Syntex Ltd. and Carreman, France.

CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per Clause 49 of the Listing Agreements with the Stock Exchanges, the Company has adopted a Code of Conduct which is applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements; Corporate Governance Report and Management Discussion & Analysis Report are annexed and marked Annexure-I, which form part of this report.

FIXED DEPOSITS

The Company has not issued any advertisement inviting fixed deposits from the public. However, it continues to accept deposits from public. As on 31st March, 2011, the Company had such deposits aggregating Rs.793.64 Lacs. Deposits which matured during the year were either renewed or repaid. All the interest and principal dues are being paid regularly. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

The Board of Directors has, in its meeting held on 6th February, 2011 appointed Shri P.K. Bhandari as an additional Director. He holds office until the conclusion of ensuing Annual General Meeting. A proposal for his re-appointment is being placed before the Annual General Meeting for approval by the shareholders.

In accordance with the provisions of Articles of Association of the Company, Shri D.P. Garg, Shri A. N. Jariwala and Shri S.B. Agarwal, are retiring by rotation and, being eligible, offer themselves for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the year ended 31st March, 2011 the applicable Accounting Standards have been followed and the Notes to the Accounts are self-explanatory.

ii. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date.

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 detecting frauds and other irregularities.

iv. The Directors have prepared the annual accounts of the Company for the year ended 31st March, 2011 on a going concern basis.

AUDIT COMMITTEE

In accordance with the requirement of Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which presently comprises three independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholiaand Shri S. B. Agarwal as members. The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges.

AUDITORS

Statutory Auditor

M/s. Kalani & Company, Chartered Accountants, Jaipur, hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. They have furnished a Certificate to the effect that the re-appointment, if made, would be within the limits prescribed under Section 224(1 -B) of the Companies Act, 1956.

Cost Auditor

The Central Government has approved the appointment of the M/s. K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors for conducting Cost Audit for the financial Year 2010-11. The Cost Audit Report for the year 2010-11 shall become due for filing on 27th September, 2011. The report is under process. M/s. K.G. Goyal & Company, Cost Accountants, Jaipur, have been appointed Cost Auditors of the Company for the financial year 2011 -12. They have furnished a Certificate to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1 -B) of the Companies Act, 1956.

AUDITORS'REPORT

As regards the Auditors' observations, the relevant Notes on Accounts are self-explanatory and, therefore, do not call for any further comments, except in the matter of non payment of Service Tax and Cess thereon of Rs.26.20 Lacs and disputed liabilities of Rs.11.74 Lacs towards the excise duty and Rs.631.56 Lacs towards entry tax. The matter pertaining to service tax refunds taken by the Company are under appeal with CESTAT, New Delhi and Commissioner Appeal, Jaipur, Rajasthan. Excise duty demand is under appeal, with Hon'ble High Court Rajasthan & Joint Secretary Govt, of India while the Entry Tax case is pending with Hon'ble High Court, Rajasthan. The Company has paid Rs.201.81 Lacs on 11.04.2011 against Entry Tax Dues. The Company has also given Solvent Security Undertaking of Rs.315.28 Lacs to Commercial Taxes Department.

These liabilities will be met, if necessary, on final decision of the respective Appellate Authorities.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to the provisions of Section 217 (1) (e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure 'II', which forms part of this report.

DEMATERIALIZATION OF SHARES

In pursuance of SEBI / Stock Exchange directions, your Company offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 97.25% shares have been converted into demat form up to 31st March, 2011. The stock code number in NSDL and CDSL for equity shares of the Company is ISIN - INE 629 D01012.

PARTICULARS OF EMPLOYEES

During the year under report, the relations between the Company's management and its staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

As required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees of the Company who were in receipt of remuneration of Rs.5,00,000/- per month or more are annexed and marked Annexure 'III,' which forms part of this report.

ACKNOWLEDGMENT

Your Directors wish to express their grateful appreciation for the co-operation and assistance extended to the company by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under review. The Directors thankfully acknowledge the continuous support and guidance of all the shareholders and, more importantly, for the confidence reposed in the Company's manaqement.

For and on behalf of the Board

R.L.TOSHNIWAL Chairman & Managing Director

Place: Mumbai Date : 16th May, 2011


Mar 31, 2010

The Directors are pleased to present the 34th Annual Report of the Company together with its Audited Accounts for the year ended 31st March, 2010.

FINANCIAL REVIEW

(Rs. in Lacs)

This year Previous year 2009-201 2008-2009

Gross Income 64,683 55,895

Net Income 63,097 54,894

Profit before extra-ordinary items, depreciation & tax 6,799 4,822

Profit before depreciation & tax 7,407 4,069

Less: Depreciation 3,073 2,939

Profit before tax 4,334 1,129

Tax on Income 1,246 170

(a) Current Tax 736 128

(b) Deferred Tax 530 140

(c) Fringe Benefit Tax _ 30

1,266 298

Less : MAT Credit Entitlement 20 128

Profit after Tax 3,088 959

Balance brought forward 536 608

Profit available for appropriation 3,623 1,567

Appropriations :

Interim Dividend and Tax thereon

(paid during the year) 230 -

Proposed Final Dividend 300 241

Tax on Dividend 50 41

Transfer to General Reserve 2,000 750

Balance Carried to Balance Sheet 1,044 536

Earning Per Share (Rs) : Basic 23 7.29

Diluted 20.92 7.29

OPERATIONS

During the year 2009-10, your Companys performance realed new heights, both in terms of gross income and profitability. The net income from operations during the year at Rs.631 crores went up by 15% over Rs.549 crores achieved in 2008-09. The production of yarn increased by 11%, fabrics by 15% and garments by 45%. The Company also started production of technical fabrics during the year. There is good scope for further increase in production all along the value chain.

Profit before depreciation and tax for the year 2009-10 at Rs.7,407 lacs recorded in impressive growth of 82% over Rs.4,069 lacs of 2008-09. The profit before tax and net profit for the year worked out to Rs.4,334 lacs and Rs.3,088 lacs, i.e. up by 284% and 222% respectively over the previous year. The Company has paid Rs.736 lacs as income tax besides providing Rs.530 lacs as deferred tax liability for the year under report.

The basic and diluted Earning Per Share (EPS) for the year 2009-10 works out to an all time high of Rs.23.56 and Rs.20.92 respectively.

EXPORTS

During the year 2009-10, the export turnover at Rs.36,674 lacs as against Rs.32,759 lacs during 2008-09, recorded an increase of 12% mainly due to increase of 15% in yarn exports. The Company has increased production and export of readymade garments and as such the export growth in garments was more than 48% over the year 2008-09.

During the year under report, your Company added few more important customers of world repute. The Companys marketing as well as, design and development teams participated in the international trade fairs to acquaint themselves with the latest market trends and acquire better understanding of the customers requirements. The Company has developed a design studio for fabrics and garments to boost the export sales by introducing new designs. It is continuously making efforts to attract the new customers domestically and internationally.

DIVIDEND

The Company has already paid interim dividend of Rs.1.50 per equity share in January, 2010. Your Directors are now pleased to recommend final dividend of Rs.2.00 per equity share. Thus, the total dividend is Rs.3.50 per equity share (previous year- Rs.1.80 per equity share) of Rs.10/- each of the Company. The dividend payout for the year would aggregate Rs.490.85 lacs besides dividend tax of Rs.82.29 lacs. The Company has also paid 3% dividend on preference shares.

INCREASE IN SHARE CAPITAL

During the year 2009-10, the Company issued 16,50,000 warrants on preferential basis to persons other than promoters @ Rs.41 per warrant based on the prevailing rules and regulations.

The Board of Directors, in its meeting held on 27th April, 2010 has converted these warrants into an equal number of equity shares, as per the terms of issue of these warrants. Accordingly, the equity share capital of the Company has increased to 1,47,56,361 equity shares of Rs.10/- each.

EXPANSION, DIVERSIFICATION AND MODERNIZATION

During the year under review, the Company has added fixed assets of Rs.4,585 lacs besides-the-capital work-in-progress of Rs.828 lacs and advances to capital goods suppliers of Rs.1,622 lacs as at 31.03.10. These expenses were incurred on expansion, diversification and modernization of all the areas of its operations viz. spinning, weaving, finishing and readymade garments.

The Company has made investment of Rs.2,280 lacs in spinning for modernization and replacement of spindles, Rs.447 lacs on fabric weaving for replacing 20 looms, and Rs.951 lacs on fabric processing facility adding various value adding machines suitable for technical fabrics and increase in the processing capacity by about one million meter a month besides Rs.907 lacs in readymade garments division for 4 additional lines for trousers and 1 line for production of Jackets at Daman and Surat.

The total production capacity of the Company as at 31s March, 2010 for yarn production is 133588 ring spindles, including 14400 spindles for worsted yarn spinning, 576 air jet spindles, 190 shuttleless looms, 12 air jet jacquard looms, 5 stenters with processing capacity of 4 million meters a month and 2.50 lac pieces of garments per month.

The Company has arranged the requisite funds for the expansion, diversification and modernization schemes through term loans from banks and financial institutions as well as ploughing back of internal accruals of the Company. The term loans availed during the year aggregate Rs.3,541 lacs out of which Rs.2,964 lacs were under TUFS.

The Companys ongoing expansion plan i.e. 2nd unit of captive Thermal Power Plant of 15/18 MW capacity and increase in production capacities in all the areas of its operations is under implementation. Further capital outlay expected during 2010-11 is Rs.90 crores. The means of financing the same have been fully tied up.

JOINT VENTURE

The Joint Venture Company Carreman Fabrics India Ltd., has a fabric weaving plant of 60 Rapier Looms. Your Company has 50% stake in JVs equity share capital. The JV Company manufactures fabric on job work basis for your Company, the total production during the year 2009-10 being 65.65 lac meters as against 62.35 lac meters in the year 2008-09. The JV Company earned net profit of Rs.46.87 lac during 2009-10 as against Rs.95.22 lac in the previous year; the shortfall in profitability is attributed to increasing power maintenance and employees cost.

POWER PLANT

The 1st unit of captive Thermal Power Plant of 15/18 MW capacity is working satisfactorily. The Companys power requirement has increased on account of expansion of capacity of various division at Banswara over the years. The Company is in the process of installation of 2nd unit of coal based Thermal Power Plant of the same capacity, which is expected to become operational in the last quarter of the current financial year, 2010-11. The Company has also signed a fuel supply agreement for purchase of coal from South Eastern Coalfields Ltd. The availability of Indian Coal at Government supply rates will reduce the cost of power generation. The Government coal supply is expected to commence from June/ July, 2010.

FINANCE

During the year 2009-10, the Company availed term loans aggregating Rs.3,541 lacs from Banks and Financial Institutions. It also received increase in need based working capital from all the bankers of the Company.

CONTRIBUTION TO EXCHEQUER

During the year, your Company contributed Rs.2,478 lacs to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.

SUBSIDIARY COMPANY

The Company did not have any subsidiary as on 31st March, 2010. However, it has 50% stake in equity capital of Carreman Fabrics India Ltd., a Joint Venture Company between Banswara Syntex Ltd. and Carreman, France.

CORPORATE GOVERNANCE/MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per Clause 49 of the Listing Agreements with the Stock Exchanges, the Company has adopted a Code of Conduct

applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements; Corporate Governance Report and Management Discussion & Analysis Report are annexed and marked Annexure-I, which form part of this report.

FIXED DEPOSITS

The Company has not issued any advertisement inviting fixed deposits from the public. However, it continues to accept deposits from public. As on 31s March, 2010, the Company had such deposits aggregating Rs.743.17 lacs. Deposits which matured during the year were either renewed or repaid. All the interest and principal dues are being paid regularly. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS

Appointment of Shri Shaleen Toshniwal as a Whole-time Director is expiring on 30th September, 2010. The Board of Directors, in its meeting held on 27th April, 2010 has re-appointed Shri Shaleen Toshniwal as Whole-time Director for further period of 3 years from 1st October, 2010 to 30th September, 2013. Necessary resolution for appointment of Shri Shaleen Toshniwal shall be placed before the shareholders at the forthcoming Annual General Meeting for their approval.

In accordance with the provisions of Articles of Association of the Company, Shri Kamal Kishore Kacholia, Shri Vijay Mehta and Shri P. Kumar, Directors, are retiring by rotation and, being eligible, offer themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the year ended 31st March, 2010 the applicable Accounting Standards have been followed and the Notes to the Accounts are self-explanatory.

II. The Directors have selected such Accounting Policies and applied them consistently and made judgements and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date.

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 detecting frauds and other irregularities.

IV. The Directors have prepared the annual accounts of the Company for the year ended 31st Marcri, 2010 on a going concern basis.

AUDIT COMMITTEE

In accordance with the requirement of Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which presently comprises three independent Directors viz. Shri P. Kumar, (Chairman), Shri Kamal Kishore Kacholia and Shri S.B. Agarwal as members.

The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges.

AUDITORS

M/s. Kalani & Company, Chartered Accountants, Jaipur, hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the re-appointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956.

AUDITORS REPORT

As regards Auditors observations, the relevant Notes on account are self-explanatory and, therefore, do not call for any further comments, except in the matter of non payment of Service Tax and Cess thereon of Rs. 19.10 lacs and disputed liabilities of Rs.11.75 lacs towards the excise duty and Rs.403.61 lacs towards entry tax. While the matter pertaining to Excise duty refunds taken by the Company are under appeal with Joint Secretary, Govt, of India, Service Tax demand with CESTAT, New Delhi and Entry Tax is pending with Honble High Court, Rajasthan.

These liabilities will be met if necessary on final decision of the respective Appellate Authorities.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to the provisions of Section 217 (1) (e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure II, which forms part of this report.

DEMATERIALIZATION OF SHARES

In pursuance of SEBI / Stock Exchange directions, your Company offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 95.60% shares have been converted into demat form up to 31st March, 2010. The stock code number in NSDL and CDSL for equity shares of the Company is (SIN - INE 629 D01012.

PARTICULARS OF EMPLOYEES

During the year under report, the relations between the Companys management and its staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.

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, the particulars of employees of the Company who were in receipt of remuneration of Rs.2,00,000/- per month or more are annexed and marked Annexure III, which forms part of this report.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation for the co-operation and assistance extended by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under review. The Directors thankfully acknowledge the continuous support and guidance of all the shareholders and, more importantly, for the confidence reposed in the Companys management.

For and on behalf of the Board

Place : Mumbai R.L. TOSHNIWAL

Date : 2691 May, 2010 Chairman & Managing Director

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