Directors Report of Bombay Swadeshi Stores Ltd.

Mar 31, 2014

Dear Members,

The Directors present the ONE-HUNDRED AND EIGHTH ANNUAL REPORT of your Company together with the Audited Statements of Accounts for the year ended 31st March, 2014.

The Indian economy has continued to be in a state of flux and uncertainty even with the advent of financial year 2013-2014. The real GDP growth during the financial year continued to be at alarmingly low levels which has hampered the Industrial growth. With the political scenario having undergone a sea change, it is hoped that there will be a favourable impact on the national economy.

FINANCIAL RESULTS

Amount (Rs. lacs)

Year ended Year ended 31st March, 31st March, 2014 2013

Profit/(Loss) for the year 23.09 19.84

Less: Provision for Current Tax 7.10 4.10

Total 15.99 15.74

Less: Prior Year Tax adjustments -- 0.55

Add: Balance of Profit brought 260.83 245.64 forward

Balance carried to Balance Sheet 276.82 260.83

DIVIDEND

With a view to conserve resources, your Directors do not recommend any dividend for the year under report.

FIXED DEPOSITS

As on 31st March, 2014, there were no fixed deposits remaining overdue.

ALTERATIONS TO THE ARTICLES OF ASSCOIATION

With the introduction of the Companies Act, 2013 and the notification of 288 sections, several regulations of the existing Articles will require suitable alteration or deletions, to make the Articles in conformity with the provisions of the new Act. Given such a scenario, it is considered expedient to replace the existing Articles by a fresh set of Articles which will be in conformity with the provisions of the new Act. The proposed new Articles are based on Table ''F'' of the new Act which sets out the model Articles of Association for a company limited by shares.

A Special Resolution for the purpose forms part of the Notice conveying the Annual General Meeting.

Your Directors recommend the same for approval of the Members.

DIRECTORS

In terms of the Articles of Association of the Company, Mr.Milan Dalai and Mr.Bharat Patel retire at the ensuing Annual General Meeting.

The re-appointment of Mr.Milan Dalai, who is not an Independent Director, as Director liable to retire by rotation, forms part of the Notice convening the One Hundred and Eighth Annual General Meeting.

Further, the Company has received a notice in writing from a member proposing the candidature of Mr.Bharat Patel for appointment as Independent Director. The Company has received declaration from Mr.Bharat Patel confirming that he meets with the criteria of independence as prescribed under of Section 149(6) of the Companies Act, 2013.

Your Directors recommend the re-appointment of Mr.Milan Dalai as Director liable to retire by rotation as also the re-appointment of Mr.Bharat Patel as Independent.

PARTICULARS OF EMPLOYEES

During the year under report, there was no employee of the category mentioned in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence information in this regard is not required to be furnished.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year covered under this Report and of the profit of your Company for the year;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts have been prepared on a going concern basis.

COMPLIANCE CERTIFICATE

A compliance certificate received from M/s Sanjay Soman & Associates, Practicing Company Secretaries, pursuant to Section 383A(1) of the Companies Act, 1956, read together with the Companies (Compliance Certificate) Rules, 2001 is attached hereto and forms part of this Report.

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

The nature of business being retailing, providing information with regard to conservation of energy and technology absorption as required under Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of this Report does not arise for your Company.

The total foreign exchange used during the year was Rs.4,64,163/- (previous year Rs.1,61,344/-) and earned during the year was Rs.2,38,51,961/- (previous year Rs.3,14,04,496/-).

SUBSIDIARY COMPANY AND 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 Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report, the Consolidated Financial Statements are attached and form part of this Annual Report. These Consolidated Financial Statements provide financial information about the Company and its Subsidiary as a single entity.

The Ministry of Corporate Affairs, Government of India, vide General Circular No:2/2011 dated February 8, 2011, has granted general exemption under Section 212(1) of Companies Act ,1956 to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in Section 212(1) of Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of its Subsidiary are not attached with the financial statements of the Company. A summary of the financial performance of the Subsidiary is given in this Annual Report. The Annual Accounts of the Subsidiary and the related detailed information are made available to shareholders of the Company as well as the Subsidiary seeking such information. The Annual Accounts of the Subsidiary are also open for inspection by any member at the Registered Office of the Company and of the Subsidiary.

AUDITORS

M/s M.D.Pandya & Associates, Chartered Accountants, Mumbai, hold office as Auditors of your Company upto the conclusion of the forthcoming Annual General Meeting. A certificate has been obtained from them pursuant to Section 224(1-B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the limits prescribed thereunder.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the co-operation and diligent efforts of the employees of your Company.

For and on behalf of the board

Mumbai Asim Dalai Pratul Dalai

Dated: 30™ May, 2014 Managing Director Director

---

Mar 31, 2013

The Directors present the ONE-HUNDRED AND SEVENTH ANNUAL REPORT of your Company together with the Audited Statements of Accounts for the year ended 31st March, 2013.

The financial year gone by has been one of the most challenging and turbulent periods for the retail industry. The overall performance of the industry was average and the Company was no exception. With the Company having effectively pursued cost-saving measures and inventory control management, the profits for the year were marginally higher compared to that of the financial year 2011-2012, despite the drop in sales. The Company continued to channelize its resources towards outlets wherein operations were encouraging.

FINANCIAL RESULTS

Amount (Rs. lacs)

Year ended Year ended 31st March, 31st March, 2013 2012

Profit/Loss for the year 19.84 7.38

Less: Provision for Current Tax 4.10 0.70

Total 15.74 6.68

Less: Prior Year Tax adjustments 0.55 -

Add: Balance of Profit brought forward 245.64 238.96

Balance carried to Balance Sheet 260.83 245.64

DIVIDEND

With a view to conserve resources, your Directors do not recommend any dividend for the year under report.

FIXED DEPOSITS

As on 31s1 March, 2013, there were no fixed deposits remaining overdue.

ALTERATIONS TO THE ARTICLES OF ASSCOIATION

In terms of the General Circular No.28/2011 dated 20th May, 2011, issued by the Ministry of Corporate Affairs, directors of a company may, if permitted by the Articles of Association, participate in Meetings of the Board or any Committee of the Board through the electronic mode.

Accordingly it is proposed to make appropriate alterations to the Company''s Articles of Association.

A Special Resolution for the purpose forms part of the Notice conveying the Annual General Meeting.

Your Directors recommend the same for approval of the Members.

DIRECTORS

During the year under report, Mr.PratuI Dalai and Mr.Hetal Gandhi retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re- appointment.

PARTICULARS OF EMPLOYEES

During the year under report, there was no employee of the category mentioned in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence information in this regard is not required to be furnished.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial vear covered under this Report and of the profit of your Company for the year;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. The Annua! Accounts have been prepared on a going concern basis.

COMPLIANCE CERTIFICATE

A compliance certificate received from M/s Sanjay Soman & Associates, Practicing Company Secretaries, pursuant to Section 383A(1) of the Companies Act, 1956, read together with the Companies (Compliance Certificate) Rules, 2001 is attached hereto and forms part of this Report.

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

The nature of business being retailing, providing information with regard to conservation of energy and technology absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of this Report does not arise for your Company.

The total foreign exchange used during the year was Rs.1,61,344.07 (previous yearRs.2,68,248/-) and earned during the year was Rs.3,14,04,495.63 (previous year Rs.3,85,53,870/-).

SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standards AS-21 on consolidated financial statements, the Consolidated Financial Statements are attached and form part of this Annual Report. These Consolidated Financial Statements provide financial information about the Company and its Subsidiary as a single entity.

The Ministry of Corporate Affairs, Government of India, vide General Circular No:2/2011 dated February 8, 2011, has granted general exemption under Section 212(1) of Companies Act ,1956 to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in Section 212(1) of Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of its Subsidiary are not attached with the financial statements of the Company. A summary of the financial performance of the Subsidiary is given in this Annual Report. The Annual Accounts of the Subsidiary and the related detailed information are made available to shareholders of the Company as well as the Subsidiary seeking such information. The Annual Accounts of the Subsidiary are also open for inspection by any member at the Registered Office of the Company and of the Subsidiary.

AUDITORS

M/s. M. D. Pandya & Associates, Chartered Accountants, Mumbai, hold office as Auditors of your Company upto the conclusion of the forthcoming Annual General Meeting. A certificate has been obtained from them pursuant to Section 224(1-B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the limits prescribed thereunder.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the co-operation and diligent efforts of the employees of your Company.

FOR AND ON BEHALF OF THE BOARD

Mumbai Asim Dalai Pratul Dalai

Dated: 31st May, 2013 Managing Director Director

---

Mar 31, 2012

The Directors present the ONE-HUNDRED AND SIXTH ANNUAL REPORT of your Company together with the Audited Statements of Accounts for the year ended 31st March, 2012.

The financial year gone by has been one of the most challenging and turbulent periods for the retail industry. The overall performance of the industry was moderate and the Company was no exception with the profits having fallen substantially. Certain prudent cost-saving measures pursued by the Company and effective inventory control management contributed largely to the Company being able to register profits. Some of the outlets not beneficial to the Company's endeavour to grow were closed down. Further, the Company opened outlets during the year in a very judicious manner.

FINANCIAL RESULTS

Amount (Rs.)

Year ended Year ended 31st March, 31st March, 2012 2011

Profit/Loss for the year 7,38,114 38,05,951

Less: Provision for Current Tax 70.000 11.90.000

Total 6,68,114 26,15,951

Less: Prior Year Tax adjustments - 13,98,449

Add: Balance of Profit brought forward 2.38.95.864 2,26,78.362

Balance carried to Balance Sheet 2.45.63.978 2„,38l95J864

DIVIDEND

With a view to conserve resources, your Directors do not recommend any dividend for the year under report.

FIXED DEPOSITS

As on 31st March, 2012, there were no fixed deposits remaining overdue.

DIRECTORS

During the year under report, Mr.Milan Dalai and Mr.Bharat Patel retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re- appointment.

PARTICULARS OF EMPLOYEES

During the year under report, there was no employee of the category mentioned in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence information in this regard is not required to be furnished.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year covered under this Report and of the profit of your Company for the year;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts have been prepared on a going concern basis.

COMPLIANCE CERTIFICATE

A compliance certificate received from M/s Sanjay Soman & Associates, Practicing Company Secretaries, pursuant to Section 383A(1) of the Companies Act, 1956, read together with the Companies (Compliance Certificate) Rules, 2001 is attached hereto and forms part of this Report.

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

The nature of business being retailing, providing information with regard to conservation of energy and technology absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of this Report does not arise for your Company.

The total foreign exchange used during the year was Rs.2,68,248/- (previous year Rs.14,44,501/-) and earned during the year was Rs.3,85,53,870 (previous year Rs.42,967,410/-).

SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standards AS-21 on consolidated financial statements, the Consolidated Financial Statements are attached and form part of this Annual Report. These Consolidated Financial Statements provide financial information about the company and its Subsidiary as a single entity.

The Ministry of Corporate Affairs, Government of India, vide General Circular No:2/2011 dated February 8, 2011, has granted general exemption under Section 212(1) of Companies Act ,1956 to the holding companies, from attaching the specified documents of Its subsidiary companies, as referred in Section 212(1) of Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of its Subsidiary are not attached with the financial statements of the Company. A summary of the financial performance of the Subsidiary is given in this Annual Report. The Annual Accounts of the Subsidiary and the related detailed information are made available to shareholders of the Company as well as the

Subsidiary seeking such information. The Annual Accounts of the Subsidiary are also open for inspection by any member at the Registered Office of the Company and of the Subsidiary.

AUDITORS

M/s. M. D. Pandya & Associates, Chartered Accountants, Mumbai, hold office as Auditors of your Company upto the conclusion of the forthcoming Annual General Meeting. A certificate has been obtained from them pursuant to Section 224(1-B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the limits prescribed thereunder.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the co-operation and diligent efforts of the employees of your Company.

FOR AND ON BEHALF OF THE BOARD

Milan Dalai Chairman

Mumbai

Dated: 14th August, 2012

---

Mar 31, 2010

The Directors take pleasure in presenting the ONE- HUNDRED AND FOURTH ANNUAL REPORT of your Company together with the Audited Statements of Accounts for the year ended 31s1 March, 2010.

We began our journey in this business of retailing 104 years ago with two simple ideas, to encourage the sale of Swadeshi products and to grow by ensuring the satisfaction of our customers. Our concern for satisfaction has over a time taken a deep meaning and we have extended our horizon to actively fulfilling the aspirations of our stakeholders, our vendors, our employees and most importantly our investors.

Retailing is one of the pillars of Indian economy and accounts for about 35% of GDP. The retail industry is divided into organised and unorganised sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sq ft in size. This includes the corporate-backed hyper markets and retail chains as well as the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing. India has topped the AT. Kearneys Annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment.

GLIMMER OF HOPE FOR INDIAS RETAIL SECTOR

The Indian retail sector has seen a remarkable turn around after bearing the impact of the global economic slowdown that started in September 2008, and is currently experiencing a time of renewed optimism with growth momentum picking up gradually in the recent months. Indias retail sector is pegged at $ 370 billion and is estimated to grow more than double over the next 10 years. Consumer market in India is the next big thing on the Indian retail sectors future, organized retail is expected to rise by 20-25% by the close of 2010. Over the past few years retail Sales in India are hovering around 33- 35% of GDP as compared to 20% in US.

Analyst feel that worst is over and the retail sector in India is likely to witness a steady growth. Consumers have started trickling back to malls and stores as the economy is reviving. The Company firmly believes in recognising opportunities, moulding them to fit the business in order to capitalize on them, this would definitely help us to improve growth in income and profitability and improve return on investment for stakeholders in long term.

In the year under review The Bombay Store expanded by opening new outlets at Inorbit Mall Navi Mumbai, High Street Phoenix Mumbai, Those Mall at Lonavala and are looking at opportunities to open new outlets at major Airports in India as well as in major cities in India. Moreover, at Bengaluru, we have re-located our M.G. Road Store to 100 Feet, Indira Nagar due to extensive Metro Rail construction work on M.G. Road. This year our Company has introduced branded Alphonso Mangoes and Designer umbrellas which received overwhelming response. Further, we have added two more outlets in May 2010 at Mumbai Airport, one at Domestic Terminal 1C and the other one at International Terminal of Mumbai Airport, as a shop in shop arrangement with the Lotus House. FINANCIAL RESULTS;

Amount (Rs.)

Particulars 31st March, 31st March,

2010 2009

Profit for the year 1,934,941 1,518,450

Less: Provision for Current Tax 1,530,000 8,60,000

Less: Provision for Fringe

Benefit Tax Nil 3,70,000

TOTAL 404,941 288,450

Add: Balance of profit 22,273,421 21,984,970

brought forward

Balance carried to Balance

22,678,362 22,273,420

Sheet

OBSERVATIONS IN THE AUDITORS REPORT:

Explanations given in Notes to Accounts are self explanatory.

DIVIDEND:

With a view to conserve resources, your Directors do not recommend any dividend for the year under report.

FIXED DEPOSITS:

As on 31st March, 2010, there were no fixed deposits remaining overdue.

DIRECTORATE:

- Mr. Bharat Patel retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers him- self for re-appointment.

- Mr. Pratul Dalai retires by rotation at the forthcoming An- nual General Meeting and, being eligible, offers himself for re-appointment.

- Mr. Kamlesh Gandhi, independent Director of the Company has resigned from his post with effect from 22nd June, 2010.

PARTICULARS OF EMPLOYEES PURSUANT TO THE SECTION 217 (2A) OF THE COMPANIES ACT. 1956

During the year under report, there were no employees of the category mentioned in Section 217 (2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence the information in this regard is not required to be furnished.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 as inserted vide Companies Amendment Act, 2000 your Directors report that,

a) In preparation of the Annual Accounts, the applicable accounting standards have been followed;

b) They have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and a fair view of the state of affairs of your Company at the end of the relevant financial period covered under this report and of the profit of your Company for the year;

c) They have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the accounts on a going concern basis.

COMPLIANCE CERTIFICATE:

A Compliance Certificate received from M/s Mehta & Mehta, Practicing Company Secretaries, pursuant to Section 383A(1) of the Companies Act, 1956, read together with the Companies (Compliance Certificate) Rules, 2001 is attached hereto and forms part of this Report.

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

The nature of the business being retailing, providing information with regard to conservation of energy & technology absorption as required under Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of this report does not arise for your Company.

The total foreign exchange used during the year was Rs. 5,500/-(Previous year Rs. 4,11,496/-) and earned during the year was 4,61,43,509/- (Previous year 5,54,61,265/-). Thus the Company continues to add considerable amount of foreign exchange. The relevant details are given in the Notes to Accounts.

AUDITORS:

M/s M.D. Pandya & Associates, Chartered Accountants, Mumbai hold office as Statutory Auditors of your Company upto the conclusion of the forthcoming Annual General Meeting. A certificate has been obtained from them pursuant to Section 224 (1B)of the Companies Act, 1956 to the effect that their appointment, if made, would be within the limits prescribed there under.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to thank all the Shareholders, Employees and Bankers to the Company for their valuable support and co-operation during the year under review.



For Mehta & Mehta

Company Secretaries

Dipti Mehta

Mehta & Mehta

Company Secretaries

C.P.No.: 3202

Mumbai, 26thAugust, 2010 ACS No.: 3667