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Directors Report of E-Land Apparel Ltd.

Mar 31, 2014

The Members of Mudra Lifestyle Limited,

The Directors present the 17th Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2014.

FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31st March, 2014 is summarized below:

(Rs. In Lakhs)

Particulars 2013-14 2012-13 (12 Months) (6 Months)

Operational & Other Income 34,670.43 13,399.07

Profit before Interest, Depreciation, Exceptional Items & Tax (5,427.15) (1,147.63)

Interest 3,579.34 2,839.12

Depreciation & Amortization 2,489.79 1,247.69

Profit/(Loss) before exceptional items and tax (11,496.28) (5,234.44)

Less: Exceptional Items 8013.88 -

Profit/(Loss) before tax (3,482.40) (5,234.44)

Less/(Add): Provision for Taxation including prior period adjustments 1138.14 290.03

Deferred Tax 1,010.80 -

Net Profit /(Loss) after tax (1,333.45) (5,524.47)

Balance brought forward (35,515.42) (29,990.95)

Balance carried to Balance Sheet (36,848.87) (35,515.42)

EPS Basic (2.78) (11.51)

EPS Diluted (2.78) (11.51)

Note:The above mentioned figures for current year are for 12 months i.e. from 1st April, 2013 to 31st March, 2014 whereas the previous period figures are for 6 months i.e. from 1st October, 2012 to 31st March, 2013, hence the current year figures are not comparable with the previous period figures.

OPERATIONS OF THE COMPANY:

During the year under review, the Company earned total revenue of Rs. 34,670.43 Lakhs (Previous year Rs. 13,399.07 Lakhs). Total Expenses were Rs. 46,166.71 Lakhs (Previous year Rs. 18,633.5 Lakhs). Loss before tax stood at Rs. 3,482.40 Lakhs (Previous year Rs. 5,234.43 Lakhs). The previous period figures are for 6 months i.e. from 1st October, 2012 to 31st March, 2013, hence the current year figures are not comparable with the previous period figures.

DIVIDEND:

As there are no profits, the Board of Directors of the Company do not recommend any payment of dividend on the shares for the financial year 2013-14. Accordingly, no amounts are proposed to be transferred to reserves.

REGISTERED OFFICE:

During the year under review, the Registered Office of the Company was shifted to 509, 5th Floor, Western Edge-I, Western Express Highway, Magathane, Borivali (East), Mumbai-400066 with effect from Monday, 18th November, 2013.

BOOK CLOSURE:

The Register of Members and Share Transfer Books shall remain closed from Monday, 22nd September, 2014 to Friday, 26th September, 2014 (both days inclusive). The Annual General Meeting of the Company is scheduled to be held on 30th September, 2014 in Mumbai.

SLUMP SALE OF UNIT D-1 LOCATED AT TARAPUR:

During the year under review, the Company has transferred its Unit D-1 of Fabric Business located at Tarapur on a going concern basis by way of slump sale to E-Land Fashion India Pvt. Ltd., wholly owned subsidiary of the holding company viz. E-Land Asia Holding Pte Ltd. for cash consideration of INR 46.49 Crores.

Approval of the shareholders as required under Section 180(1)(a) of the Companies Act, 2013 for the said transaction of Slump Sale of Unit D-1 was sought by way of Postal Ballot process, result of which was declared on 21st March, 2014.

SALE OF NON-CORE ASSETS:

The Company also decided to sell its Non-Core Assets to prospective Buyers for an appropriate consideration. The Non- Core Assets identified by the Company are as follows:

* All Units of Daman

* All Units of Bhiwandi

* Unit N-12 of Tarapur

Approval of the shareholders as required under Section 180(1)(a) of the Companies Act, 1956 for the said Non-Core Assets was sought by way of Postal Ballot process, result of which was declared on 21st March, 2014.

The Company has already commenced the process of the sale of the above mentioned Non-Core Assets and ascertained the prospective buyers for the same. Majority of the transactions are on advanced stage of completion.

CORPORATE DEBT RESTRUCTURING (CDR):

In order to overcome debt repayment obligations, the Company had applied for the restructuring of its debts through CDR Mechanism envisaged under the Reserve Bank of India (RBI) guidelines dated 23rd August, 2001 and subsequent amendments thereto.The CDR Scheme was approved by the CDR Cell vide its Letter of Approval dated 27th June, 2012 subject to the compliance of the conditions mentioned therein.The implementation of the CDR Scheme was to be made within a period of 120 days from the issuance of the said Letter of Approval. The Company has already executed Master Restructuring Agreement (MRA) and has opened the Trust and Retention Account (TRA) with SBI on the terms and conditions set out in Trust and Retention Account Agreement. Other follow-on procedures such as Security creation in favour of SBI Cap Trustee Ltd., as a security Trustee for beneficial interest of all existing CDR lenders for majority of its properties is completed and for rest of the properties it is in advanced stage for creation of security.

REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION ("BIFR") UNDER THE PROVISIONS OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985:

The total losses of the Company as on 31st March, 2014 have exceeded its entire Net Worth. Accordingly, your Company is required to make a reference to the BIFR under the provisions of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 for determination of the measures that can be adopted by your Company to revive the Company. Your Company is in the process of collating all the requisite data needed for making the reference to the BIFR.

SEBI NOTICE:

As per provisions of Rule 19A of the Securities Contracts (Regulations) Rules, 1957, and Clause 40A of the Listing Agreement, every listed company shall maintain public shareholding of at least 25% of its listed share capital. However, the promoters of the Company, comprising of Mr. Murarilal Agarwal, Mr. Ravindra Agarwal, Mr. Vishwambharlal Bhoot (Old Promoters) and E-Land Asia Holdings Pte Ltd. hold 85.79% of Equity Shares. Accordingly, at present, the public shareholding of the Company falls short of the required MPS by 10.79%, which is not in compliance with the said rule and clause.

Your Company had received an order dated 4th June, 2013, issued under Sections 11(1), 11(2)(j), 11(4) and 11(B) of the SEBI Act, 1992 read with section 12A of SCRA Act, 1956 in relation to the said non- compliance with requirement of Minimum Public Shareholding.

The Company''s officials and old promoters of the Company along with Legal Advisors attended the personal hearing before Securities and Exchange Board of India (SEBI) on 26th June, 2014. The Company officials deliberated the various options to comply with MPS requirement including Offer for Sale. However in view of the extremely low volume of trading in the shares of the Company and also due to the shares being categorized for trading in the "Periodic Call Auction" system, the Company shall require more time to meet the MPS requirements. SEBI adjourned the meeting till next three months.

SHARE CAPITAL:

The Company''s Authorised Share Capital is Rs. 6,001 Lakhs comprising of 6,00,10,000 Equity Shares of Rs. 10/- each and paid up share capital is Rs. 4,799.05 Lakhs comprising of 4,79,90,469 Equity Shares of Rs. 10/- each fully paid up. There was no change in capital of the Company during the period under review.

LISTING:

The Equity Shares of the Company are listed on BSE Limited (BSE) with Scrip Code ''532820'' and on The National Stock Exchange of India Limited (NSE) having symbol as ''MUDRA.

The listing fee for the year 2014-15 has been paid to both the Stock Exchanges.

DIRECTORS:

Mr. Eung Kyun Shin, Executive Chairman, Mr. Gagan Rai and Mr. Wan Ki Eun, Independent Directors of the Company resigned from directorship of the Company with effect from close of working hours of 31st March, 2014, 3rd June, 2014 and 5th August, 2014 respectively due to their other occupations. Your Directors take this opportunity to express their deep sense of appreciation for the valuable services rendered by Mr. Eung Kyun Shin, Mr. Gagan Rai and Mr. Wan Ki Eun during their tenure as Directors.

Mr. Kyoung Hur has been appointed as an Additional Independent Director of the Company with effect from 5th August, 2014 and holds office upto the date of ensuing 17th Annual General Meeting of the Company. The Company has received a notice from a member of the Company under Section 160 of the Companies Act, 2013 in respect of his appointment as the Director at the ensuing Annual General Meeting of the Company, along with the deposit as prescribed there under.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Jung Ho Hong is liable to retire by rotation at the ensuing 17th Annual General Meeting of the Company. Mr. Jung Ho Hong, being eligible, offers himself for re-appointment.

In terms of provisions of Section 149 and 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 which became effective from 1st April, 2014 an Independent Director of a Company can be appointed for a term of 5 consecutive years and shall not be liable to retire by rotation.

To comply with the above provisions, it is proposed to appoint Mr. Chong Tae Baek and Mr. Sivabalan Paul Pandian, Independent Directors of the Company to hold office as such upto 31st March, 2019 and Mr. Kyoung Hur as an Independent Director of the Company to hold office as such upto 4th August, 2019, who shall not be liable to retire by rotation. Your Board recommends for the above appointments.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered with the Stock Exchanges.

Brief resume of the Directors proposed to be appointed/re-appointed as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges where the shares of the Company are listed are given in the Notice convening 17th Annual General Meeting.

The Company had filed requisite Form 25A for approval of appointment and payment of remuneration for Mr. Jung Ho Hong on 10th May, 2013. The Central Government approval for appointment and payment of remuneration of Mr. Jung Ho Hong is pending and the follow up for the same is in process.

CORPORATE GOVERNANCE REPORT:

Pursuant to Clause 49 of the Listing Agreement entered with the Stock Exchanges, the following have been made a part of the Annual Report and are attached to this report:

! Management Discussion and Analysis Report

! Corporate Governance Report

! Auditors'' certificate regarding compliance of conditions of Corporate Governance

FIXED DEPOSITS:

The Company has not accepted/renewed any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A):

The Company has no employee drawing remuneration above the limits mentioned in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, hence no such particulars are furnished.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state that:- (1) In the preparation of the annual accounts, for the year ended 31st March, 2014 the applicable Accounting Standards have been followed and that there are no material departures;

(2) Appropriate accounting policies have been selected 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 loss of the Company for the year ended 31st March, 2014;

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

(4) They have prepared the annual accounts on a "Going Concern" basis.

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

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in annexure forming part of this report.

INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has constituted an Internal Complaint Committee under Section 4 of the Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint was made before the Committee.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:

Your Company has adequate internal controls for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets and appropriate reporting of financial transactions.

The Company has Internal Audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It comprises of experienced professionals who conduct regular audits across the Company''s operations. The Company has also appointed a firm of Chartered Accountants as Internal Auditors, who reviews the various functions of the Company thoroughly and report to the Audit Committee.

The adequacy of the same has been reported by the Statutory Auditors of your Company in their report as required under the Companies (Auditor''s Report) Order, 2003.

AUDITORS:

The Statutory Auditors, M/s. K C P L And Associates LLP, Chartered Accountants, Mumbai, hold the office till the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them expressing their unwillingness to continue as Statutory Auditors of the Company.

The Company has received a letter from M/s. S R B C & CO LLP, and Associates LLP, Chartered Accountants, Mumbai regarding their willingness to act as Statutory Auditors of the Company.The Company has also received a certificate from them to the effect that their appointment, if made, would be in compliance with the conditions as prescribed under Section 139 of the Companies Act, 2013 and they satisfy the criteria as provided under Section 141 of the Act. They have also confirmed their compliance pursuant to clause 41(1) (h) of the Listing Agreement in respect of "Peer Review Certificate" issued by the Peer Review Board of ICAI.The Company has also received a special notice as required under Section 140(4)(i) of the Companies Act, 2013, regarding appointment of M/s. S R B C & CO LLP, Chartered Accountants as Statutory Auditors of the Company.

Your Directors recommend the appointment of M/s S R B C & CO LLP, Chartered Accountants, Mumbai as Statutory Auditors of the Company to hold office from the conclusion of the ensuing 17th Annual General Meeting upto the conclusion of 22nd Annual General Meeting of the Company subject to ratification of the appointment by members at every Annual General Meetings.

The observations and comments given by the Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

COST AUDITORS:

Pursuant to the provisions of Section 233B of the Companies Act, 1956, the Company was under the purview of Cost Audit. Based on the recommendations of the Audit Committee and approved by the Board of Directors, the Company appointed M/s. Rohit & Associates, Cost Accountants, Mumbai as the Cost Auditors of the Company for audit of the cost accounting records for the financial year 2013-14, with the approval of Central Government.

RECONCILIATION OF SHARE CAPITAL AUDIT:

In compliance of Circular No. D&CC/FITTC/CIR-16/2002 dated 31st December, 2002 further amended by Circular No.CIR/ MRD/DP/30/2010 dated 6th September, 2010 issued by the Securities and Exchange Board of India ("SEBI"), Reconciliation of Share Capital Audit has been carried out at the specified intervals by a Practicing Company Secretary and have been submitted to the Stock Exchanges where the Company is listed within due dates.

INDUSTRIAL RELATIONS & EMPLOYEE SAFETY:

Garment Manufacturing Industry is one of the high labour and low capital intensive industries. Like any other organization in the manufacturing sector, garment sector have to sustain intense competition and perpetual changes. Well motivated workforce that performs up to its potential can make all the difference between a successful organization and the one that aspires to be the one of the leading garment manufacturers.

Employee safety is of paramount importance for the Company. All the executives in the Company have a personal objective of ensuring a safe working environment for its employees. The safety performance is analyzed in all important forums.

Various Employee related welfare activities were also undertaken by the Company for the welfare of all the employees on the occasion of Women''s Day, World Environment Day, World AIDS Day, Christmas, etc.

Also various Employee Recreation/ Cultural/ Sports/ activities are undertaken by the Company on occasions of New Year, Labour Day, Gandhi Jayanthi, Dussehra, Kannada Rajyotsava etc.

We strongly believe that trained and motivated people determine the future growth of the Company.

Your Company endeavors to attract and recruit best possible talent and considers the quality of its human resources to be most important.

APPRECIATION / ACKNOWLEDGEMENT:

Board of Directors wish to express their gratitude and record sincere appreciation for the dedicated efforts of all the employees of the Company. Directors are thankful to the esteemed shareholder for their continued support and confidence reposed in the Company. The Board takes this opportunity to express its gratitude for the valuable assistance and co-operation extended by Government Authorities, Banks, Corporate Debt Restructuring (CDR) Cell, Financial Institutions, Vendors, Customers, Advisors and other business partners.

FOR AND ON BEHALF OF THE BOARD

Sd/- Sd/- Date: 14th August, 2014 YangweonYoo Jung Ho Hong Place: Mumbai Managing Director Executive Director DIN:03629831 DIN:02229634


Sep 30, 2012

To, The Members of Mudra Lifestyles Limited,

The Directors take pleasure in presenting their 15th Annual Report of the Company together with the Audited Financial Statement of Accounts for the year ended 30th September, 2012.

FINANCIAL RESULTS:

The financial performance of the Company for the year ended 30th September, 2012 is summarized below:

(Rs in Lacs)

Particulars 2011-12 2010-11

Operational & Other Income 31364.23 42991.00

Profit Before Interest, Depreciation & Tax (22799.75) 4214.99

Interest 6942.03 4171.88

Depreciation & Amortization 4115.26 2619.25

Profit before tax (33857.04) (2576.14)

Less/(Add): Provision for Taxation including prior period adjustments (1331.67) (200.86)

Deferred Tax (2426.33) (251.57)

Net Profit /(Loss)after tax (32762.38) (2525.43)

Appropriations NIL

Proposed Dividend NIL NIL

Dividend Tax NIL NIL

Balance brought forward 2771.43 5296.86

Balance carried to Balance Sheet (29990.95) 2771.43

EPS Basic (68.27) (6.30)

EPS Diluted (68.27) (6.30)

Note: The Company''s current financial year is 18 months ending 30th September, 2012, hence the current year figures are not comparable with the previous year figures.

OPERATIONS OF THE COMPANY

The Company''s total revenue stood at Rs 31,364.23 Lakhs. Total Expenses were Rs 65,221.27 Lakhs. Loss before tax stood at Rs 34,076.09 Lakhs and Loss after tax stood at Rs 32,762.38 Lakhs. The current Financial Year consist of 18 months (as the same was extended by 6 months upto 30th September, 2012), hence current year figures are not comparable.

DIVIDEND

As there are no profits for the year, your Directors has not recommended any dividend on the shares for the financial year 2011-12. Accordingly, no amounts are proposed to be transferred to reserves.

The register of members and share transfer books will remain closed from Monday, 18th March, 2013 to Friday, 22nd March, 2013 both days inclusive. The Annual General Meeting of the Company is scheduled to be convened on 22nd March, 2013 at Mumbai.

CORPORATE DEBT RESTRUCTURING(CDR):

During the year, due to factors affecting economies at macro-economic level and industry downtown and substantial working capital erosion, the Company started facing liquidity crunch and it was not able to fulfill its repayment obligations on timely basis. In order to overcome debt repayment obligations, the Company had applied for the restructuring of its debts through CDR Mechanism envisaged under the Reserve Bank of India (RBI) guidelines dated August 23, 2001 and subsequent amendments thereto which was approved by the CDR Cell vide their letter of approval dated June 27, 2012 subject to the compliance of the conditions mentioned therein and the implementation of the CDR Scheme within a period of 120 days from the issuance of the Letter of Approval. The Company executed Master Restructuring Agreement (MRA) on 24th September 2012 and other follow-on procedures such as Security creation in favour of SBI Cap Trustee Ltd., as a Security Trustee for beneficial interest of all existing lenders , opening of Trust & Retention Accounts (TRA) are at advance stage of completion.

SHARE CAPITAL

During the year under review, your Company''s Authorised Share Capital is at Rs 6,001.0 Lakhs comprising of 60,010,000 Equity Shares of Rs. 10/- each. The Company''s paid up capital Rs 4,799.05 Lakhs comprising of 4,79,90,469 Equity Shares of Rs. 10/- each fully paid up.

SUBSIDIARY COMPANIES:

Your Company do not have any subsidiary company hence the compliance of provisions of section 212 of the Companies Act, 1956 are not applicable.

SHIFTING OF REGISTERED OFFICE OF THE COMPANY

The Board of Directors at its meeting held on 4th August, 2012 had decided to shift the registered office of the Company to 3026, A-Wing, 3rd Floor, Oberoi Garden Estate, Chandivali Farm Road, Chandivali, Andheri (East), Mumbai-400072 within the same city i.e. Mumbai with effect from 11th August, 2012, accordingly, e-Form 18 was filed with Registrar of Companies, Mumbai which was duly approved.

DIRECTORS

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Sivabalan Paul Pandian and Mr. Chong Tae Baek are liable to retire by rotation at the ensuing 15th Annual General Meeting of the Company, Mr. Sivabalan Paul Pandian and Mr. Chong Tae Baek, being eligible, offers themselves for re-appointment.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the company, Mr. Wan Ki Eun, was appointed as Additional Director of the Company whose term expires on the date of ensuing Annual General Meeting of the Company. It is proposed to appoint him as an Independent Director of the Company liable to retire by rotation.

The above appointment / re-appointment forms part of the notice convening the Annual General Meeting and the resolutions are recommended for your approval.

The details of their appointment/re-appointment together with nature of their expertise in specific functional areas and names of the companies in which they hold office as Director and/or the Chairman/ Membership of Committees of the Board, if any are provided in the Notice of this Annual General Meeting.

During the year under review, Mr. Surendra Ambalal Dave( w.e.f. 11th May, 2011) ; Mr. Parameshwaran Nair( w.e.f. 13th August, 2011) ; Mr. S.C Bhargava (w.e.f 9th November, 2011); Mr. Murarilal Agarwal ( w.e.f. 22nd March, 2012); Mr. Ravindra Agarwal( w.e.f. 22nd March,2012); Mr. Kyoung Hur ( w.e.f. 4th August, 2012) and Mr. Mrithyunjay Amblimath(w.e.f 4th August, 2012), Directors of the Company had expressed their inability to continue as Directors of the Company due to their other professional pre-occupations and had rendered their resignation.

The Board places on record its appreciation for the valuable services rendered by them during their tenure as Directors of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT

Management Discussion & Analysis and Corporate Governance Report for the year under review as stipulated under Clause 49 of Listing Agreement with the Stock Exchange in India is presented in the separate section forming part of this Annual Report.

The Practicing Company Secretary has certified the Company''s compliance of the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement and the same is annexed to the Report of the Corporate Governance.

FIXED DEPOSITS

The Company has not accepted any deposit, within the meaning of section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975, made there under.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A):

The Company has no employee drawing remuneration above the limits mentioned in section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

DIRECTOR''S RESPONSIBILITY STATEMENT

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

(1) In the preparation of the annual accounts for the year ended 30th September 2012, the applicable accounting standards have been followed and that there are no material departures.

(2) Appropriate accounting policies have been selected 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 30th September 2012 and of the loss of the Company for the year ended 30th September 2012.

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

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

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

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

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your Company has adequate internal controls for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets and appropriate reporting of financial transactions.

The Company has Audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It comprises of experienced professionals who conduct regular audits across the Company''s operations. The Company has also appointed a firm of Chartered Accountants as Internal Auditors, who review the various functions of the Company thoroughly and report to the Audit Committee.

The adequacy of the same has been reported by the Statutory Auditors of your Company in their report as required under the Companies (Auditor''s Report) Order, 2003.

AUDITORS'' REPORT

- As regards observations in point no. 4 of Auditors'' Report, the Statutory Auditors have qualified their report with a remark that the company has not filed the requisite applications with Central Government in terms of the provisions of Section 269 read with Schedule XIII of the Companies Act, 1956 (''the Act''), to seek approval for the appointment & remuneration of eight foreign national Directors.

In the opinion of the Directors, approval of the Central Govt. is to be sought for the appointment and payment of remuneration for only 4 foreign national Directors i.e. the Chairman of the Board, Managing Director and 2 Whole Time Directors. Availing of No-Objection Certificate (NOC) from the Bankers is a prerequisite for availing for the approval of the Central Government in respect of the appointment and payment of remuneration to the Managerial Personnel pursuant to Schedule XIII of the Act. Since your company was under the process of the restructuring of its debts, availing of NOC from the Bankers got delayed, which would result in applying for condonation of delay to the Company Law Board (CLB).

However, as on date the NOC has been availed from most of the bankers and the process of filing of application to Central Government along with the condonation of delay shall be complied at the earliest.

- With regard to observation of the Auditors on Sr No. 5 in the Auditor''s Report relating to Note 4 "Long Term Borrowings" and Note 8 "Short Term Borrowings" of the Financial Statements, your Company has taken necessary steps to ensure the reconciliation in order to determine the accuracy of the interest working reversed by all the banks as stated in Master Restructuring Agreement (MRA) read along with CDR.

- With regard to observation of the Auditors on Sr no. 6 in the Auditor''s Report, the Auditors have stated that "Inventories"(Note 16) of Financial Statements, wherein the company has shown Inventory of Rs. 6,677.14 Lakhs (P.Y.20,451.23 Lakhs). During the period the Company has carried out physical stock taking by independent auditors appointed by the Company

in the month of September 2011 onwards, wherein the Company has discovered that it does not have stock amounting to Rs. 13,225.60 Lakhs and accordingly, the Company has written off such non-existent stock in the books of accounts. As per information and explanation given to us the company is in the process of investigating reasons for non existence of such stock. In absence of final conclusion of such investigation we are unable to ascertain as to whether the amount of Profit/Loss of the period and relevant assets have been under or overstated."

Your Directors state that pursuance to preliminary investigation, your Company has collected documentary evidence to enable them to substantiate case of deterioration in the value of the stock including the deficiency in the stock and accordingly written off the non-moving, obsolete and non existing stock Company is also in the process of further detailed investigation to know the exact cause of non existence of physical stocks and reasons thereon. Pending investigation, Company has already given accounting effect to such non-existing stocks. Hence, the Company opinioned contrary to auditors opinion as to whether the amount of Profit/Loss of the period and relevant assets have been under or overstated.

- As regards the observation in point no. 7 in the Auditor''s Report, the Statutory Auditors has qualified their report with a remark that the Company has not considered all the direct costs in valuation of raw Material and work-in-Progress and the finished goods have been valued at net realizable value without ascertaining the cost thereof, hence AS 2 was not complied with.

In the opinion of the Directors, Company has taken appropriate corrective measure to ensure compliance with Accounting Standard 2 "Valuation of Inventories". Company has also appointed cost Auditors who are helping Company in proper valuation of inventories. Company was successfully able to do the valuation of inventories as per AS 2 for the quarter ended December 2012 and the statutory auditors has removed the said qualification from their limited review report.

- As regards the observation in point no. 8 in the Auditor''s Report, the Statutory Auditors have qualified their report with a remark that in Note 19 to the Accounts "Short -Term Loans & Advances" of Financial Statements amounting to Rs. 190.14 Lakhs has been recorded as "Focus Product Receivable" and corresponding income has been credited in the Statement of Profit & Loss, in the absence of requisite licence under the scheme, the income and assets has been overstated to that extent.

In the opinion of the Directors, your Company is taking necessary steps to obtain the requisite licence under the scheme so that the benefit can be availed.

- As regards the observation in point no. 9 in the Auditor''s Report, the Statutory Auditors have qualified their report with a remark that there have been certain misappropriation of funds of the Company during the period of financial year 2003-04 to financial year 2009-10. The Company''s investigation is under process hence, no provision for the misappropriations of funds have been made in the books of accounts. Since the matter is under investigation and the amounts are pending detailed explanation and quantification, the Auditors were unable to comment as to whether the books of accounts give a true and fair view.

Your Directors states that your Company is under process of carrying out detailed investigation in the said matter, as already mentioned above, also, due to change in management, senior staff, voluminous and complex nature of work involved, process of investigation is taking longer time than expected.

AUDITORS

The Statutory Auditors, M/s. KCPL & Associates, Chartered Accountants, Mumbai, holds the office till the conclusion of the ensuing Annual General Meeting. The Company has received a certificate from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956.

The Statutory Auditors have also confirmed their compliance pursuant to clause 41(1) (h) of the Listing Agreement in respect of "Peer Review Certificate" issued by the Peer Review Board of ICAI.

The Board recommends their reappointment.

COST AUDITORS

The Company has come under the purview of Cost Audit for the first time for the financial year 2012-13 and onwards. Based on the recommendations of the Audit Committee, the Board of Directors has approved the appointment of M/s Rohit & Associates as the Cost Auditors of the Company for the financial year 2012-13, subject to the approval of the Central Government. As required under the provisions of Section 224(1B) read with Section 233B(2) of the Companies Act, 1956, the Company has obtained a written confirmation from M/s Rohit & Associates of their eligiblility for appointment as Cost Auditors under Section 233B of the Companies Act, 1956. The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company.

RECONCILIATION OF SHARE CAPITAL AUDIT

In compliance of circular no. D&CC/FITTC/CIR-16/2002 dated 31st December, 2002 further amended by Circular No.CIR/ MRD/DP/30/2010 dated 6th September, 2010 issued by the Securities and Exchange Board of India ("SEBI"), Reconciliation of Share Capital Audit has being carried out at the specified intervals by a Practising Company Secretary and have been submitted to the Stock Exchanges where the Company is listed within due dates.

INDUSTRIAL RELATIONS & EMPLOYEE SAFETY

Garment Manufacturing Industry is one of the high labour and low capital intensive industries. Like any other organization in the manufacturing sector, garment sector have to sustain intense competition and perpetual changes. Well motivated workforce that performs up to its potential can make all the difference between a successful organization and the one that aspires to be the one of the leading garment manufacturers.

Employee safety is of paramount importance for the Company. All the executives in the Company have a personal objective of ensuring a safe working environment for its employees. The safety performance is analyzed in all important forums.

We strongly believe that trained and motivated people determine the future growth of the Company.

Your Company endeavors to attract and recruit best possible talent and considers the quality of its human resources to be most important.

CAUTIONARY STATEMENT

Statements in this report, particularly those which relate to Management Discussion and Analysis, describing the Company''s objective, projections, estimates and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Forward looking Statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company''s actual results, performance or achievements might differ materially from those either expressed or implied herein.

APPRECIATION / ACKNOWLEDGEMENT:

Board of Directors wish to express their gratitude and record sincere appreciation for the dedicated efforts of all the employees of the Company. Directors are thankful to the esteemed stakeholders for their continued support and confidence reposed in the Company. The Board takes this opportunity to express its gratitude for the valuable assistance and co operation extended by Government Authorities, Banks, Corporate Debt Restructuring (CDR) Cell, Financial Institutions, Vendors, Customers, Advisors and other business partners.

FOR AND ON BEHALF OF THE BOARD

Sd/-

Eung Kyun Shin

Chairman

Date: 4th February, 2013

Place: Mumbai


Mar 31, 2011

The Members of Mudra Lifestyles Limited,

The Directors take pleasure in presenting their 14th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2011.

FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31 st March, 2011 is summarized below:

Rs. in Lakhs

Particulars 2010-11 2009-10

Operational & Other Income 42937.99 36391.86

Profit Before Interest, Depreciation & Tax 4165.17 5527.07

Interest 4100.77 2222.47

Depreciation & Amortisation 2640.54 1615.49

Profit before tax (2576.14) 1689.11

Less/(Add): Provision for Taxation including prior period adjustments (200.86) 232.88

Deferred Tax (251.57) 395.87

Net Profit /(Loss)after tax (2525.43) 1060.36

Appropriations

Proposed Dividend NIL 215.94

Dividend Tax NIL 35.86

Balance brought forward 5296.86 4488.30

Balance carried to Balance Sheet 2771.43 5296.86

OPERATIONS OF THE COMPANY:

The Company has achieved total income for the year of Rs. 42937.99 Lacs as against Rs. 36391.86 Lacs in the previous year. The net profit/ (Loss) for the year was Rs. (2525.43) Lacs as against Rs. 1060.36 Lacs in the previous year. The Profit before Interest, Depreciation & Tax decreased from Rs. 5527.07 Lacs in previous year to Rs. 4165.17 Lacs in the current year, Due to increase in interest and depreciation cost, net Loss is Rs. (2525.43) Lacs in the current year as against net profit of Rs. 1060.36 Lacs in the previous year. The export sales increased to Rs. 6809.02 Lacs as against export sales of Rs. 3242.49 Lacs in the previous year.

During the year performance of the company suffered due to various factors such as very high volatility in the prices of Cotton Yarn, our main raw material, all round increase in other input cost, continuous increase in interest cost etc. The company has completed II phase of expansion during the year, but, due to shortage of working capital and other repayment obligations, the company could not work at full capacity,

The Company is hopeful that going forward from second half of current year performance of the company should improve gradually as now The Company has positioned itself as an integrated multi product, multi fiber and multi market player covering the entire textile value chain at length. The Company's target market is a diverse mix of the domestic market, garment export trade and international market (exports) to ensure risk diversification and stability of earning. After commissioning of both phase of mega project at Tarapur, the company has positioned itself in upper segment of the textile market.

SHARE SUBSCRIPTION AGREEMENT, PREFERENTIAL ISSUE:

During the year the Company has entered into Share Subscription Agreement with E Land Fashion China Holdings Limited (the investor), and 3 Promoters of the Company, on 15th October, 2010. Pursuant to this Agreement, the investor E Land Fashion China Holdings Limited has been allotted 1,20,00,000 (One Crore Twenty Lacs) equity shares of Rs. 10/- (Rupees Ten) at a price of Rs.60/- (Rupees Sixty).

The members of the company had accorded their consent to the preferential allotment of equity shares to the investor E Land Fashion China Holdings Limited, vide extra ordinary general meeting held on 13th November, 2010. Subsequently equity shares were allotted vide Board resolution dated 27th November, 2010.

The Company has received In Principle Approval, for listing of these shares, from Bombay Stock Exchange Limited (BSE) vide its letter dated 16th November, 2010 and from National Stock Exchange of India Limited (NSE) vide its letter dated 24th November, 2010.

Pursuant to provisions of Share Subscription Agreement, Mr. Eung Kyun Shin was appointed as a Director of the Company with effect from 27th November, 2010 and Mr. Jung Ho Hong, as an Observer of the company.

OPEN OFFER FOR ACQUISITION OF EQUITY SHARE OF THE COMPANY:

As Company has entered into Share Subscription Agreement with E Land Fashion China Holdings Limited (the investor) and 3 promoters of the Company and preferential issue of 1,20,00,000 (One Crore Twenty Lac), equity shares was made to the Investor, this amounted to acquisition of 25.005% of post issue capital of the Company by the investors.

The provisions of SEBI (Substantial Acquisition of Shares and Transfer) Rules, 1997, become applicable to this transaction and requiring the investor to make open offer for the acquisition of at least 20% of equity shares of the same.

The investor has made the open offer for acquisition of 95,98,094 (Ninety Five Lacs Ninety Eight Thousand Ninety Four) equity shares, vide public announcement dated 21 st October, 2010.

Pursuant to Agreement entered between existing promoters and the investor, the investor has purchased further shares from the existing promoters of the Company and the Company has recognize the Investor as the majority Shareholder and promoter of the Company.

MEGA EXPANSION PROJECT:

During the year, the company has completed and implemented Expansion of processing and garmenting project of phase II of Mega Expansion Project.

DIVIDEND:

Your Directors regret their inability to declare any dividend for the year due to loss incurred during the year.

LISTING:

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai (BSE) with script code no. 532820 and The National Stock Exchange of India (NSE) with script code as Mudra.

The listing fee for the year 2011-12 has been paid.

SUBSIDIARY COMPANIES:

Your Company do not have any subsidiary company hence the compliance of provisions of section 212 of the Companies Act, 1956 are not applicable.

DIRECTORS:

Pursuant to provisions of Share Subscription Agreements entered by the Company, Mr. Eung Kyun Shin, was inducted, as an Additional Director, on the Board of the Company on 27th November, 2010. Mr. Eung Kyun Shin will hold office of Director till the conclusion of the Annual General Meeting. The Board has received notice under section 257 of the Companies Act, 1956, recommending his candidature for reappointment, along with necessary deposit amount. Hence the Board recommends his appointment as Director, at the ensuing Annual General Meeting.

During the year Dr. G. Parmeshwaran Nair was appointed as an Additional Director of the Company with effect from 11th May, 2011 but due to his other preoccupations he expressed his inability to continue as Director of the Company and tendered his resignation with effect from 13th August, 2011. The Board has accepted his resignation in its meeting held on 23rd August, 2011.

During the year under review, Mr. Vishwambharlal Bhoot and Dr. S. A. Dave, Directors of the Company has expressed their inability to continue as Directors of the Company due to their other pre occupations and rendered their resignation with effect from 27th November, 2010 and 24th March, 2011 respectively. Board took on record their devotion and effort put in, during their tenure as Director.

In accordance with the provisions of the Companies Act, 1956, Mr. S. C. Bhargava is liable to retire by rotation at the forthcoming annual general meeting and being eligible, have offered himself for re-appointment.

It is brought to the notice of the members that at the meeting of the Board of Directors, held on 23rd August, 2011, the Board has resolved to appoint Mr. LeeEun Hong as a Chairman of the Board in place of Mr. MurarilalAgarwal. Mr. LeeEun Hong will be acting as a Chairman for all the meeting of the Board, as well as meetings of the members, after the conclusion of the ensuing Annual General Meeting.

It is further brought to the notice of the members that at the meeting of the Board of Directors held on 23rd August, 2011, the Board has discussed about the appointment of Mr. Eung Kyun Shin, as a Managing Director of the Company. As discussed and resolved, Mr. Eung Kyun Shin was appointed as a Managing Director of the Company with effect from 23rd August, 2011 (currently without paying any remuneration). The other terms and conditions, including the remuneration, will be discussed at the next Board Meeting after the Annual General Meeting. If discussed and resolved in this regards, the approval of the members will be sought accordingly.

CORPORATE GOVERNANCE:

Report on Corporate Governance of the Company and Management Discussion and Analysis Report for the year under review, as per the requirements of Clause 49 of the Listing Agreement(s), have been given under a separate section and forms part of this Annual Report.

FIXED DEPOSITS:

The Company has not accepted any deposit, within the meaning of section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975, made there under.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A):

The Company has no employee drawing remuneration above the limits mentioned in section 217 (2A)of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

DIRECTORS' RESPONSIBILITY STATEMENT:

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

1. In the preparation of the Annual Accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures, if any.

2. In preparation of Accounts, the Company has selected accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and Loss of the Company for the year.

3. In the preparation of accounts, the Company has 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.

4. In the preparation of Accounts, the going concern concept has been followed.

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

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

AUDITORS:

The Statutory Auditors, M/s. Churiwala & Co., Chartered Accountants, Mumbai, holds the office till the conclusion of the ensuing Annual General Meeting. The Company has received a certificate from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1 B) of the Companies Act, 1956.

The Statutory Auditors have also confirmed their compliance pursuant to clause 41(1 )(h) of the Listing Agreement in respect of "Peer Review Certificate" issued by the Peer Review Board of ICAI.

The Board recommends their reappointment.

INDUSTRIAL RELATIONS:

Your Company has an enviable track record of successful human capital management, which has remained the source of sustainable competitive advantage. Your Company's growth and success has generated due to talent and expertise of its employees. The relations with employees at all levels have been cordial throughout the year.

APPRECIATION /ACKNOWLEDGEMENT:

Board of Directors wish to express their gratitude and record sincere appreciation for the dedicated efforts of all the employees of the Company. Directors are thankful to the esteemed shareholder for their continued support and confidence reposed in the Company. The Board takes this opportunity to express its gratitude for the valuable assistance and co operation extended by Government Authorities, Financial Institutions, Banks, Vendors, Customers, Advisors and Other business partners.

FOR AND ON BEHALF OF THE BOARD

Place: Mumbai MURARILAL B. AGARWAL

Dated: 23rd August, 2011. Chairman & Managing Director






Mar 31, 2010

The Directors have pleasure in presenting their 13th Annual Report together with the audited statement of accounts of the Company for the year ended 31 st March, 2010.

FINANCIAL RESULTS (Rs. in Lacs)

2009-10 2008-09

Operational & Other Income 36391.86 31476.70

Pofit Before Interest, Depreciation & Tax 5527.07 4144.19

Interest 2222.47 1290.45

Depreciation 1615.49 797.65

Profit before tax 1689.11 2056.09

Less. Provision for Taxation including

period adjustments 232.88 249.50

Deferred Tax 395.87 434.05

Net Profit after tax 1060.36 1372.54

Appropriations

Proposed Dividend 215,04 215.94

Dividend Tax 35.86 44.92

Balance brought forward 4488.30 3840.19

Balance carried to Balance Sheet 5296.86 4488.30



OPERATIONS OF THE COMPANY

The Company has achieved total income for the year Rs. 36391.86 Lacs as against Rs. 31476.70 Lacs in the previous year. The net profit for the year was Rs. 1060.36 Lacs as against Rs. 1372.54 Lacs in the previous year. The Profit before Interest, Depreciation & Tax improved from Rs. 4144.19 Lacs in previous year to Rs. 5527.07 Lacs in the current year, however, due to increase in interest and depreciation cost, net profit declined to Rs. 1060.36 lacs in the current year as against net profit of Rs. 1372.54 Lacs in the previous year.

The Company has positioned itself as an integrated multi product, multi fiber and multi market player covering the entire textile value chain at length. The Companys target market is a diverse mix of the domestic market, garment export trade and international market (exports) to ensure risk diversification and stability of earning. After commissioning of mega project at Tarapur, the company has positioned itself in upper segment of the textile market. The Company is making continuous efforts in up-gradation of technology and also expanding its capacity to reduce the cost and to remain as a competitive supplier of high quality products in the domestic as well as in the international market.

MEGA EXPANSION PROJECT

During the year, the company implemented weaving and yarn dyeing project of phase It of Mega Expansion Project. Expansion of Processing and Garmenting segment is expected to be completed by first half of the Current Year 2010-11.

DIVIDEND

Your Directors are pleased to recommend dividend of Rs 0.60/- per Equity Share on face value of Rs. 10/- per equity share i.e @ 6% for your approval Total outgo Including dividend tax would be Rs 251.80 lacs

JDIRECTORS

During the year, there were no change in the Directorship of the Company. Mr. V.K.Bhoot, Director of the Company retire by rotation at this Annual General Meeting and is eligible for re-appointment which the Board recommends.

FIXED DEPOSITS

During the year, the Company has not accepted any fixed deposits u/s 58Aof the Companies Act, 1956.

RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act. 1956, your Directors state Ihat:-

1. In the preparation of the Annual Accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures, if any.

2. In preparation of Accounts, the Company had selected accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and Loss of the Company for the year.

3. In the preparation of accounts, the Company has 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.

4. In the preparation of Accounts, the going concern concept has been followed.

PARTICULARS OF EMPLOYEES

The Company has no employee drawing remuneration above the limit mentioned at 217(2A) of the Companies Act, 1956 and accordingly no statement Is annexed.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO

Astatement showing particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules. 1988. read with Section 217(1)(e) of the Companies Act, 1956, in the prescribed forms (Form Aand Form BJ is attach herewith and marked asAnnexure A.

During the year foreign exchange earnings were Rs. 3242.49 Lacs and Foreign Exchange outgoings were Rs. 3789.87 Lacs. Thus the Company is a net foreign exchange user with net flow of Rs. 547.38 Lacs.

AUDITORS

Tha Company has received a letter under section 224 (2) (b) of the Companies Act, 1956 from M/s V. K. Beswal, retiring auditors, informing their intension to discontinue as auditor and also received a confirmation tetter under section 224 (1 B) of the Companies Act,1956, from Churiwata & Co.. Chartered Accountants mentioning there in that their appointment lf made, will be within prescribed limit as per section 224(1 B) of the Companies Act, 1956.

CORPORATE GOVERNANCE

Tha Securities and Exchange Board of India (SEBI) has prescribed Corporate Governance Standards. Your Directors reaffirm their commitment to these standards and this Annual Report carries a section on Corporate Governance.

INDUSTRIAL RELATIONS

Your Company has an enviable track record of successful human capital management, which has remained the sou rce of sustainable competitive advantage. Your Companys growth and success has generated due to talent and expertise of its employees. The relations with employees at all levels have been cordinal throughout the year.

APPRECIATION

The Board wishes to express its thanks to the Stakeholders, Companys bankers and various Government authorities for their support and co-operation, during the year under review. The Board also wishes to express its appreciation to the employees of the Company and their families for their dedication, contribution and support during the year under review.

ON BEHALF OF THE BOARD

Place: Mumbai MURARILAL B. AGARWAL

Dated: 25thAugust. 2010 CHAIRMAN & MANAGING DIRECTOR

 
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