Home  »  Company  »  Eastern Silk Indust.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Eastern Silk Industries Ltd.

Mar 31, 2015

Dear members,

The Directors have pleasure in presenting their sixty-ninth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Rs. in Lacs)

2015 2014

Profit/(Loss) before depreciation / Exceptional items and taxation (3,411.77) (11,771.01)

Less : Depreciation 2,023.08 1,567.52

Profit/(Loss) before taxation (5,434.85) (13,338.53)

Add /(Less) : Exceptional Items 1,746.61 (306.21) (3.688.24) (13,644.74)

Add/ (Less) : Provision for Earlier Year Taxation - - (3.688.24) (13,644.74)

Add/ (Less) : Deferred Tax Liability - -

Profit/(Loss) after tax (3,688.24) (13,644.74)

Add: Balance brought forward from previous year (18,337.52) (4,692.78)

Add: Transferred from Depreciation Adjustments 75.94 -

(Less): Depreciation on Revalued Assets (817.64) -

Which the Directors have decided to carry forward to the next year (22,767.46) (18,337.52)

PERFORMANCE REVIEW

Highlights of performance during the financial year 2014-15 are:

* Total Revenue from Operation of the Company is Rs..6,101.77 lacs as against Rs..7,962.76 lacs in the previous year.

* Operating Profit / ((Loss) is Rs..(3,411.77) lacs as against Rs..(11,771.01) lacs in the previous year.

* Profit / (Loss) before taxation is Rs..(5,434.85) lacs as against Rs..(13,338.53) lacs in the previous year.

* Profit / (Loss) after Tax is Rs..(3,688.24) lacs as against of Rs..(13,644.74) lacs in the previous year.

The performance of the Company for the year has not been very encouraging as the markets did not support and the off-take of the company's products also slowed down resulting in sluggish sales.

The Company is a referred company under the Sick Industrial Companies (Special Provision) Act, 1985 (SICA) and the process of registering the same in the Board for Industrial and Financial Reconstruction (BIFR) is under way. The notices in respect of the same have already been issued to all the stakeholders.

The company's main stay i.e. Silk Textiles have undergone sea change in terms of tapering of demand on a year-to-year basis. As compared to the previous year the sale of silk products have come down by more than 15% - 18%. The resultant gap created is filled by low-end products fetching a very meager realization. Your company in spite of all the hardships and difficulties in the market has been diligently introducing new designs and new blends and also exploring new markets.

FUTURE OUTLOOK

To bring down the cost of production, your company will have to increase the scale of operation which requires infusion of machineries and technology. But unfortunately, considering financial condition of the company it may not be possible to undertake this exercise. However, the management is doing its best by ploughing back the small surplus created from weaving capacity and wherever re-engineering is required, the same is being done. Within the limited scope under restricted market condition, your management is very positively responding to matching situation in the global market.

DIVIDEND

In view of the accumulated losses the Board of Directors does not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Sri G.D. Harnathka, Director of the Company retires from the office by rotation and is eligible for re-appointment in accordance with the provisions of the Act and Articles of Association of the Company.

The members approved the re-appointment of Sri S.S. Shah, Managing Director for a period of 3 years effective from 1s September, 2014 to 31st August, 2017, during the year under review. Members also approved the re-appointment of Sri. H.S. Gopalka and Sri R.S. Rungta, Non-Executive Directors for a period of 3 years.

Requisite declarations from all the Independent Directors of the Company confirming that they met the criteria of Independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the NSE, Mumbai has been received.

Necessary policies and the criteria for the performance evaluation of Directors as Individual, Board and Committees are devised by the Company. Evaluation of Board and Committees are being done under best practices prevalent in the Industry. The Company ensures constitution of the Board of Directors with an appropriate composition, size, diversified expertise and experience and commitment to discharge their responsibilities and duties effectively. Nomination & Remuneration Committee formulated by the Company's Board in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement evaluates the each individual whether they met the specified criteria and provides valuable contribution to the Company. At the time of appointment/re-appointment of Independent Director, Nomination & Remuneration Committee assess the independence of the directors as referred in Section 149(6) of the Companies Act, 2013 and Clause 49(II)(B) of the Listing Agreement and re-assess the same when any new interest or relationships are disclosed by them. The Independent Directors shall abide by the "Code of Independent Directors" as specified in Schedule IV to the Companies Act, 2013. Nomination & Remuneration Committee ensures that all the requisite and applicable provisions of the Companies Act, 2013 rules and regulations made thereunder and Clause 49 of the Listing Agreement as amended from time to time are complied with.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31,2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

ii) that 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 at the end of the financial year and of the loss of the Company for the year under review.

iii) that the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a going concern basis.

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors' Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report as "Annexure II".

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note 41 to the financial statement which sets out related party disclosures.

CORPORATE SOCIAL RESPONSIBILITY

The Company has formulated the Corporate Social Responsibility Committee (CSRC) in consultation with the Board during the year pursuant to introduction of Section 135 under the Companies Act, 2013. Sri Sundeep Shah, Sri H. S. Gopalka and Sri G.D Harnathka are the members of the CSRC. Since the Company has been incurring cash losses in the last three preceding financial years, the Board does not recommend any amount to be spent on the CSR activities. However the Board ensures that once the Company will start earning profits, they shall after taking into account the recommendations of the CSRC, approve the Corporate Social Responsibility Policy of the Company and shall disclose contents of such policy in its report and will also place the same on the Company's website.

BANK LOANS

The One Time Settlement proposal given by the management to the banks for the outstanding dues to them, have been in the process of negotiation bilaterally with the Company. Two banks namely ICICI Bank and State Bank of Hyderabad have settled on One Time Settlement basis. Your management has paid the entire amount of the money to them. Negotiation with the other banks on a bilateral basis is going on.

RISK MANAGEMENT

The Company has been addressing various risks impacting the Company and the policy of the Company. During the year, your Directors made sure that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its strategic long term objectives. The risk management process is reviewed periodically in order to keep it aligned with the emerging risks across the globe. Various programmes involve risk identification, assessment and risk mitigation planning for strategic, operational, financial and compliance related risks across various levels of the organization.

INTERNAL FINANCIAL CONTROLS

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

DISCLOSURE OF PARTICULARS

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the Companies (Accounts) Rules, 2014 is annexed as "Annexure I":

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, holds office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

The remarks of the Auditors regarding losses of the company, interest on debt outstanding, reference to BIFR, provision for bad and doubtful debts, recognition of Net Deferred Assets have been duly explained in Note No. 33(b), 35, 36(a) and 37 to the accounts respectively.

COST AUDITORS

Pursuant to the Companies (Cost Records And Audit) Rules, 2014 notified w.e.f 30th June, 2014 Textile Industry has been exempt from maintaining the cost records and for conducting the audit of such records. However Your Company is continuing its association with M/s. N. Radhakrishnan & Co., a firm of Cost Auditors, for assisting and directing the Company with regard to allocation of direct and indirect costs to the various products and suggesting various measures lowering the cost without compromising with the quality.

SECRETARIAL AUDITOR

The Board has appointed Ms. Garima Gupta, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as "Annexure III" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as "Annexure IV" to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Your Directors appreciate the significant contribution made by the employees to the operations of your Company during the period. In terms of provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars and disclosures of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, the Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees of the Company for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the code of conduct of the Company as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. This vigil mechanism shall provide a channel to the employees and Directors to report to the management concerns about unethical behaviour, and also provide for adequate safeguards against victimization of persons who use the mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Policy is available on the website of the Company.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the period under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistance received from the government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board 19 R. N. Mukherjee Road S. S. SHAH Kolkata 700 001 Chairman & Managing Director Dated: The 30th May, 2015.


Mar 31, 2014

The Directors have pleasure in presenting their sixty-eighth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs. in Lacs)

2014 2013

Profit/(Loss) before depreciation / Exceptional items and taxation (11,771.01) (9,759.52)

Less: Depreciation 1,567.52 1,782.17

Profit/(Loss) before taxation (13,338.53) (11,541.69)

Less: Exceptional Items 306.21 186.88

(13,644.74) (11,728.57)

Less/Add: Provision for Earlier Year Taxation - 0.37

(13,644.74) (11,728.20)

Less/Add: Deferred Tax Liability - (2,193.03)

Profit/(Loss) after tax (13,644.74) (9,535.91)

Add: Balance brought forward from previous year (4,692.78) 1,981.36

Add: Transferred from General Reserve - 5,450.00

Less: Impairment of Revalued Assets - 2,588.23 Which the Directors have decided to carry forward to the next year (18,337.52) (4,692.78)

PERFORMANCE REVIEW

Highlights of performance during the financial year 2013-14 are:

- Total Revenue from Operation of the Company is Rs. 7,962.76 lacs as against Rs. 7,586.10 lacs in the previous year.

- Operating Profit / (Loss) is Rs. (11,771.01) lacs as against Rs. (9,759.52) lacs in the previous year.

- Profit / (Loss) before taxation is Rs. (13,338.53) lacs as against Rs. (11,541.69) lacs in the previous year.

- Profit / (Loss) after Tax is Rs. (13,644.74) lacs as against ofRs. (9,535.91) lacs in the previous year.

The Company has incurred substantial losses and the same was compounded due to debiting of the interest for the past for Working Capital and Term Loan for modernization coupled with bad markets resulting in poor sales.

Further the year ended 31.03.2014 the net worth of the Company has eroded and the Company has become Sick Industrial Company as per the provisions of Sick Industrial Companies (Special Provision) Act, 1985 (SICA) and the Company is required to make reference with the Board for Industrial and Financial Reconstruction (BIFR). Necessary compliances will be made in accordance with the provision of SICA.

The markets, in which the Company operates, are undergoing serious stagflation. In spite of the Company''s best efforts to increase its share in the market in Europe and US, have faced serious resistance. Your Company has more or less achieved the same level of operations by introducing new products, new designs and new blends. Wherever offtake in the market is low, the customers/buyers are demanding more performance from the suppliers. This cycle of market phenomena is being faced by us also. On standalone basis without considering any interest and depreciation, there is a small surplus during the year.

FUTURE OUTLOOK

The outlook of the economic growth across the globe with positive vibrations will fuel a growth and demand recovery. At the present moment there is a lull in the market and the management is looking forward for changing situation in the global market. While optimism rears for new vigour and thrust like emphasis on colourways and new designs, it is expected these changes will bring in positive response from the overseas buyers and will trigger growth and profitability in due course of time.

DIVIDEND

In view of the accumulated losses the Board of Directors does not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors'' Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report.

DIRECTORS

Shri R.S. Rungta and Shri H.S. Gopalka, Directors of the Company retire from the office by rotation and are eligible for re- appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) That in preparation of the annual accounts, the applicable accounting standards have been duly followed.

ii) That 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 at the end of the financial year and of the loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Companies Act, 1956 (Disclosure of Particulars in the Report of Board of Directors Rules, 1988) relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The remarks of the Auditors regarding losses of company, provision for bad and doubtful debts, recognition of Net Deferred Tax Assets have been duly explained in Note No. 35, 36 and 38 to the Accounts respectively.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 148 of the Companies Act, 2013 (Corresponding to Section 233 B of the Companies Act, 1956), the Cost account records maintained by your Company are subject to yearly audit by qualified Cost Auditors. Your Company has appointed M/s. N. Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit of such records for the financial year 2013-14.

PERSONNEL

There was no employee employed during the financial year or a part of the financial year who was in receipt of remuneration for that year or any part of that year at a rate prescribed under Section 217(2A) of the Companies Act, 1956 record with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistance received from the government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board

19, R. N. Mukherjee Road S. S. SHAH

Kolkata 700 001 Chairman & Managing Director

Dated: The 28th May, 2014


Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting their sixty-seventh Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs.in Lacs)

2013 2012 Profit/(Loss) before depreciation and taxation (9759.52) 932.73

Less/Add: Depreciation 1782.17 2123.45

Profit/(Loss) before taxation (11541.69) (1190.72)

Add: Exceptional Items 186.88 (10478.33)

(11728.57) (11669.05)

Less/Add: Provision for Earlier Year Taxation 0.37 (113.84)

(11728.20) (11555.21)

Less/Add: Deferred Tax Liability (2193.03) (2394.78)

Profit/(Loss) after tax (9535.91) (9160.43)

Add: Balance brought forward from previous year 1981.36 11141.79

Add: Transferred from General Reserve 5450.00

Less: Impairment of Revalued Assets 2588.23

Which the Directors have decided to carry forward to the next year (4692.78) 1981.36

PERFORMANCE REVIEW

The demand for silk fabrics and made-ups tapered down both in Europe market and US market leading to lower sales during the year. To make up for the volume loss in the silk, the Company had to resort to polyester, cotton, viscose and other blended fabric. Although the volumes remain the same but the realization per unit came down considerably which resulted in lower profit margin. The Company''s stand alone operation without considering interest and depreciation left small positive cash surplus. The interest in the carry over debts could not be absorbed because of the lower turnover and stiff competition in the market in spite of the management''s best efforts.

The conditions stipulated under the CDR mechanism which is to be complied within 31.03.2013, were duly complied and the promoters infused a sum of? 740.00 lakhs as their contribution.

FUTURE OUTLOOK

Going forward unless there is a recovery in the overseas markets for the demand for silk fabrics and garments, the future outlook for the time being looks bleak. However, the management is trying to change the product mix and lot of emphasis is made on new designs and colourways. It is expected that these changes will bring in additional business and also improve the bottom line. Limited success has come in the supplies made in the domestic market and we are expecting it to grow gradually over the years.

DIVIDEND

In view of the accumulated losses the Board of Directors do not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors'' Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report.

DIRECTORS

Shri G.D Harnathka and Shri R.S Rungta, Directors of the Company retires from the office by rotation and are eligible for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) That in preparation of the annual accounts, the applicable accounting standards have been duly followed.

ii) That 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 at the end of the financial year and of the loss of the Company for the year under review.

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

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2013 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Companies Act, 1956 (Disclosure of Particulars in the Report of Board of Directors Rules, 1988) relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The remarks of the Auditors regarding provision for bad and doubtful debts, recognition of Net Deferred Tax Assets have been duly explained in Note No. 37 and 39 to the Accounts respectively.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233 B of the Companies Act, 1956, the Cost account records maintained by your Company are subject to yearly audit by qualified Cost Auditors. Your Company has appointed M/s. N. Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit of such records for the financial year 2012-13.

PERSONNEL

There was no employee employed during the financial year or a part of the financial year who was in receipt of remuneration for that year or any part of that year at a rate prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistance received from the government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board

19, R. N. Mukherjee Road S. S. SHAH

Kolkata 700 001 Chairman & Managing Director

Dated: The 29th May, 2013


Mar 31, 2012

The Directors have pleasure in presenting their sixty-sixth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs in Lacs)

2012 2011

Profit / (Loss) before depreciation and taxation 932.73 (4410.42)

Less/Add : Depreciation 2123.45 (2467.22)

Profit / (Loss) before taxation (1190.72) (6877.64) Add : Exceptional Items (10478.33) -

(11669.05) (6877.64)

Less/Add : Provision for Earlier Year Taxation (113.84) 0.37

(11555.21) (6878.01)

Less / Add : Deferred Tax Liability (2394.78) (1084.39)

Profit / (Loss) after tax (9160.43) (5793.62)

Add : Balance brought forward from previous 11141.79 16935.41 year Which the Directors have decided _ _

to carry forward to the next year 1981.36 11141.79

PERFORMANCE REVIEW

As a consequence of downsizing of the business as decided last year, the sales and processing income during the year was Rs 8952.29 lacs which is not comparable with that of the last year. The net loss for the year was Rs 9160.43 lacs.

The proposal for restructuring of debts under CDR mechanism was approved by CDR Empowered Group at their meeting held on 20/12/2011. The conditions as put forth in the Letter of Approval of CDR have been complied with by the Management and a sum of Rs 734 lacs has been brought in by the Promoters and infused in the Company. Most of the bankers have restructured their loans.

FUTURE OUTLOOK

As planned last year, your Company has done away with outsourcing business and is concentrating only on the in-house production facilities. Anticipated demand recovery in the overseas markets should act as a conduit to the Company's path of recovery. Supplies in the domestic market have also commenced during the year, and it is expected to grow in the coming years.

DIVIDEND

In view of the accumulated losses the Board of Directors do not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors' Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report.

DIRECTORS

Shri R.S. Rungta, a Director of the Company retires from the office by rotation and is eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

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

i) That in preparation of the annual accounts, the applicable accounting standards have been duly followed.

ii) That 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 ofthe Company at the end of the financial year and of the loss of the Company for the year under review.

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

iv) That the Directors have prepared the accounts for the financial year ended 31s1 March, 2012 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Companies Act, 1956 (Disclosure of Particulars in the Report of Board of Directors Rules, 1988) relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The remarks of the Auditors regarding provision for bad and doubtful debts, recognition of Net Deferred Tax Assets have been duly explained in Note No. 36 and 37 of Notes on Financial Statements respectively.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233 B of the Companies Act, 1956, the Cost account records maintained by your Company are subject to yearly audit by qualified Cost Auditors. Your Company has appointed M/s. N. Radha krishnan &Co., a firm of Cost Auditors, for conducting the audit Of such records for the financial year 2011-12.

PERSONNEL

There was no employee employed during the financial year or a part of the financial year who was in receipt of remuneration for that year or any part of that year at a rate prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistance received from the Government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board

19, R. N. Mukherjee Road S. S. SHAH

Kolkata 700 001 Chairman & Managing Director

Dated : 1st August 2012


Mar 31, 2011

DIRECTORS' REPORT TO THE MEMBERS

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

FINANCIAL RESULTS

(Rs. in Lacs)

2011 2010

Profit/(Loss) before depreciation and taxation (4410.42) 2219.01

Less/Add: Depreciation 2467.22 1533 58

Profit/(Loss) before taxation (6877.64) 685.43

Less: Provision for Current Taxation - 275.00

(6877.64) 410.43

Less/Add: Provision for Earlier Year Taxation 0.37 (5.99)

(6878.01) 416.42

Less/Add: Deferred Tax Liability (1084.39) (157.35)

Profit/(Loss) after tax (5793.62) 573.77

Add: Balance brought forward from previous year 16935.41 16702.72

11141.79 17276.49

Which the Directors have appropri -ated as follows :

General Reserve - 100 00

Proposed Dividend On Equity Shares - 94.74

Proposed Dividend On Preference Shares - 112.00

Corporate Dividend Tax - 34 34

Balance carried forward to next year 11141.79 16935.41

11141.79 17276.49

PERFORMANCE REVIEW

Although the sales and processing income during the year increased to Rs.62892.52 lacs as against Rs.54393.09 lacs of the previous year, profitability came down considerably due to high cost of raw materials, increased interest rates, pressure on margin due to recession in overseas markets resulting in loss during the year. Your management had to take a decision for reworking of valuation of the closing stock of finished goods due to lower realization and a sum of Rs.34.70 crores was written off during the year for lower realization in the value of stocks. This also increased the loss for the year. It was also decided to downsize the business and only concentrate on profit making products and do away with products with no margin or lower margin.

FUTURE OUTLOOK

The budget proposal for the year 2011-12 has rendered outsourcing business of the Company totally unprofitable. Your management have decided to do away outsourcing business and only concentrate on the in-house production facilities which will result in a turnover of approx. Rs.150 crores a year. With this change the benefits of the new modernization and expansion programme undertaken during the year for production of velvet fabrics and enhancing capacity of the embroidered fabrics may be reaped during the year.

SinrP the Company's turnover would be Rs.150 crores, there will be considerable release of current assets the value of which will be untocked in a staggered manner over the years. To service the bank loans the Company has filed a flash report of Corporate Debt Restructuring with the CDR Empowered Committee and the same has been admitted for appraisal by the Committee. The scheme envisages a period of 8 -10 years to bring back the Company on a strong foothold.

DIVIDEND

In view of the accumulated losses the Board of Directors does not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

CORPORATE GOVERNANCE

A seoarate section on Corporate Governance and Management Discussion and Analysis together with the Auditors' A separate section on corporate Governance conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report.

DIRECTORS

Shri O P Agarwaf and Shri R.L. Gaggar resigned effective from 11th February, 2011. Shri Sunil V. Diwakar ceased to be a Director with effect from 4th March, 2011 on withdrawl of his nomination by IL&FS Investment (Managers) Ltd.

The Board would like to place on record the valuable contributions made by Shri O.P. Agarwal, Shri R.L. Gaggar and Shri Sunil V. Diwakarduring theirtenure as the Directors of the Company.

Shri G.D. Harnathka and Shri H.S. Gopalka, Directors of the Company retire from the office by rotation and are eligible for re- appointment.

The term of office of Shri Sundeep Shah. Executive Director of the Company, expires on 30th August 2011. He has expressed his intension for not to be re-appointed. He will, however, continue to act as a Promoter Director of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

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

i) That in preparation of the annual accounts, the applicable accounting standards have been duly followed.

ii) That the Directors have selected such accounting policies and applied them consistency 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 at the end of the financial year and of the loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance ShThe provfsions' of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st, March, 2011 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Compnaies Act, 1956 (Disclosure of Particulars in the Report of Board of Directors Rules, 1988) relating to conservation of energy, technology absorption, foreign exchange and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The Auditors have qualified that the diminution in the value of stocks has not been fully captured in the accounts. The Auditors have taken the value of the entire inventories as at 31st March 2011 at diminished value, whereas the Company adopted the prudent method of only estimating the current assets which could be sold during the next one year and diminution of the value of such stock which worked out to Rs.34.70 crores and hence provided in the books of accounts. Your management believes that there is enough market value that is left in the stock and will review the same at the end of the current year for future write offs, if any.

The Auditors have further referred to delay in payment of statutory dues amounting to Rs.42.93 lacs. Your Directors have to state that this amount pertained to a demand of Income Tax for the assessment year 2007-08 and the same was adjusted by the Income Tax authorities on 28th June 2011 against the refund due to the Company for the assessment year 2010-11.

The Auditors have also pointed out that there was delay in repayment of term loan installment of Rs. 150 lacs and interest installment thereon to State Bank of India and one interest installment to Exim Bank. Your Directors have to explain that the delay in the said payments had occurred due to liquidity crisis arising from non realization of payments from the buyers in time.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233 B of the Companies Act, 1956, the Cost account records maintained by your Company are subject to yearly audit by qualified Cost Auditors. Your Company has appointed M/s. N. Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit of such records for the financial year 2010-11.

RESEARCH & DEVELOPMENT

Your Directors are pleased to inform that in house R&D unit of the Company at both the units of Anekal, Bangalore have been accorded recognition by the Department of Scientific and Industrial Research, Government of India. The Company has always given due importance to the R&D and has been investing regularly in this area. Capital expenditure of Rs. 16.58 lacs (Previous year - Rs. 307.28 lacs) and revenue expenditure of Rs. 259.90 lacs (Previous year - Rs. 156.77 lacs) incurred by the Company's R&D unit constituting 0.44% (Previous year - 0.85%) of the turnover were approved by the Board of Directors of the Company.

PERSONNEL

There was no employee employed during the financial year or a part of the financial year who was in receipt of remuneration for that year or any part of that year at a rate prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the oo-operation and assistance received from the government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board 19,R.N.Mukherjee Road S.S.SHAH Kolkata 700 001 Chairman & Managing Director Dated: The 2nd August, 2011.


Mar 31, 2010

The Directors have pleasure in presenting their sixty-fourth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

2010 2009

Profit before depreciation and taxation 2219.01 3559.38

Less: Depreciation 1533.58 1647.56

Profit before taxation 685.43 1911.82

Less: Provision for Current Taxation 275.00 125.00

410.43 1786.82

Less: Provision for Earlier Year Taxation (5.99) -

416.42 1786.82

Less: Provision for Fringe Benefit Tax - 15.00

416.42 1771.82

Less/Add: Deferred Tax Liability (157.35) (149.23)

Profit after tax 573.77 1921.05

Add: Balance brought forward from previous year 16702.74 15637.47

17276.49 17558.52

Which the Directors have appropriated as follows:

General Reserve 100.00 300.00

Preference Share Redemption Reserve - 240.00

Proposed Dividend On Equity Shares 94.74 157.91

Proposed Dividend On Preference Shares 112.00 112.00

Corporate Dividend Tax 34.34 45.87

Balance carried forward to next year 16935.41 16702.74

17276.49 17558.52

PERFORMANCE REVIEW

During the financial year 2009-10, the sales of your Company increased to Rs.54393.09 lacs as compared to Rs.51003.75 lacs in the previous year. Profit after tax declined to Rs.573.77 lacs as against Rs.1921.05 lacs largely on account of shift of overseas customers to different varieties of textiles coupled with increase in input cost including Raw Material cost.

Your Directors are pleased to inform that the EOU Status of Unit I has been converted into Domestic Tariff Area Unit pursuant to the Company having fulfilled the export obligation. On such debonding the old and accumulated stocks of 1,07,319.18 mtrs of silk fabrics and other stocks were destroyed under the order of Customs Department. The necessary accounting entries have been passed in the books of accounts.

Due to adverse market conditions and recession in Europe, the Companys major buyers in Italy have declined to purchase spun silk and noil yarn manufactured at the Companys Unit 3 at Nanjangud, Karnataka. Hence the management decided to close down the said unit, for which the permission has been sought for from Labour Department, Government of Karnataka. The Unit shall be revived as and when the overseas market improves.

POST BALANCE SHEET DEVELOPMENT

The sales for the quarter ended 30th June, 2010 was Rs.132.26 crores as against Rs.151.78 crores in the corresponding quarter last year. The net profit was Rs.1.09 crores as against Rs.4.39 crores in the corresponding quarter of the previous year.

DIVIDEND

Your Directors recommend payment of the following Dividends for the year:

i) On 14,00,000 - 8% Cumulative Redeemable

Preference Shares of Rs.100/- each Rs.1,12,00,000/-

ii) On 7,89,52,620 Equity Shares of Rs.2/- each @ Rs.0.12 per share Rs.94,74,315/-

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchanges form part of the Annual Report.

DIRECTORS

Shri R.L. Gaggar and Shri R.S. Rungta, Directors of the Company retire from the office by rotation and are eligible for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

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

i) That in preparation of the annual accounts, the applicable accounting standards have been duly followed.

ii) That 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 at the end of the financial year and of the profit of the Company for the year under review.

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

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Companies Act, 1956 (Disclosure of Particulars in the Report of Board of Directors Rules, 1988) relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The Auditors have mentioned about the delay in the repayment of two term loan installments of Rs.18.85 lacs each due to UCO Bank and interest thereon aggregating to Rs.2.01 lacs. Your Directors would like to explain that the repayment of term loan installments are normally auto debited by the concerned bank in the current account of the Company. The debit of these two installments were not made by the Bank on the due date and when this was noticed, the Company made the payment.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section 233 B of the Companies Act, 1956, qualified Cost Auditors have been appointed to conduct Cost Audits relating to products of the Company subject to the approval of the Central Government.

PERSONNEL

The particulars of employees required to be furnished under Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended is as under.

Name, Age, Qualification, Designation, Nature of Employment, Remuneration (Rs), Experience (Years), Date of Commencement of Employment, Last Employment held, Relationship to any Director.

a) Employees employed throughout the financial year under review who are in receipt of remuneration in the aggregate of not less than Rs.24,00,000/- during the year:

i) S.S. Shah, 75, B.Com, LL.B., Chairman & Managing Director, Contractual, 4032000/-, 56, 01.9.1952, Nil, Father of Sri Sundeep Shah, Executive Director.

ii) Sundeep Shah, 48, B.Com., Executive Director, Contractual, 3513600/-, 30, 01.12.1980, Nil, Son of Sri S.S. Shah, Chairman & Managing Director.

b) Employed for part of the year and were in receipt of remuneration at the rate of not less than Rs.2,00,000/- per month. - NIL

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistance received from the government, the financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets.

By Order of the Board

S.S. SHAH

Chairman & Managing Director Kolkata 700 001

Dated: the 10th August, 2010.