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Directors Report of Ganesha Ecosphere Ltd.

Mar 31, 2014

To the Members of Ganesha Ecosphere Ltd.

The Directors have pleasure in presenting the Twenty Fifth Annual Report together with the Audited Statements of Accounts of the Company for the financial year ended 31st March, 2014.

FINANCIAL RESULTS

The summarised financial results of the Company for the year ended 31st March, 2014 as compared to the preceding year are as under:

(H in crores)

Current Year Previous Year

(2013-14) (2012-13)

Total Revenue 501.03 436.36

Profit before Finance Costs, Depreciation and Amortisation Expense 56.30 48.19

Less: Finance Costs 15.86 10.26

Less: Depreciation & Amortisation Expense 12.56 11.46

Profit before Extra Ordinary Items & Tax 27.88 26.47

Extra Ordinary Item (Loss by Fire) 1.56 -

Profit before Tax 26.32 26.47

Tax Expense 1.78 2.35

Profit after Tax 24.54 24.12

Surplus brought forward from Previous Year 62.81 40.98

Balance available for appropriation 87.35 65.10

Less: Appropriations:

Taxation/MAT Credit adjustments for earlier years (Net) (0.91) 0.33

Reserves

- Capital Redemption 0.50 4.00

- Debenture Redemption (1.13) (4.99)

- General 0.61 0.60

Interim Dividend of Preference Shares (Including Dividend Distribution Tax) 0.03 0.16

Proposed Dividend

- Preference Shares 0.00 0.05

- Equity Shares 1.82 1.82

Dividend Distribution Tax on Proposed Dividend 0.31 0.32

Surplus carried to Balance Sheet 86.12 62.81

FINANCIAL AND OPERATIONAL PERFORMANCE

Financial Year 2013-14, was a challenging year in which Indian economy witnessed lower economic growth. Rising inflation, depreciating currency and rising cost of inputs were the buzz word during the year under review. Despite this unfavourable, volatile and uncertain business environment, your Company has recorded revenues from operations of H499.48 crores in financial year 2013-14, as compared with previous year''s revenues of H435.29 crores, thus registering rise of 14.75%. Earnings before Depreciation, Interest and Taxation (EBITDA) stood at H56.30 crores in the current year, as compared with 48.19 crores in the previous year, recorded an increase of 16.83%. During the Financial Year 2013-14, the Company has achieved Net Profits of H24.54 crores as against the Net Profits of H24.12 crores in previous year recording an increase of 1.75%.

The improvement in Turnover of the Company has been mainly on account of increase in sales volume due to addition in production capacity which was not correspondingly reflected in PAT due to increase in cost of Inputs, Finance and Depreciation charges as well as extra ordinary loss of H1.56 crores due to fire at Kanpur unit against which Insurance claim is yet to be settled.

Your Directors are pleased to report that the Company''s green field project for manufacturing of spun yarn from Recycled Polyester Staple Fibre (RPSF) with an installed capacity of 25,920 spindles at Temra, Bilaspur, Distt. Rampur (U.P.) and expansion project to increase the existing recycling capacity of RPSF at Kanpur unit by 9,000 TPA, had commenced commercial production w.e.f. 01.11.2013 and full effect thereof will be reflected in the working of current financial year.

During the current year, the expansion project of Recycled Polyester Staple Fibre (RPSF) of 21,000 TPA at Bilaspur has also commenced trial production. The Directors hope that the additional capacity shall considerably reduce the lead time for delivering new products and also will improve the Top and Bottom line.

During the year under review, the Company made allotment of 1,015,000 Convertible Equity Warrants to the ''Promoter''s Group & Others'' on preferential basis and the upfront amount of H1.624 crores received on allotment of the Warrants has been utilised for general corporate purposes.

Further, the Company redeemed 50,000, 10% Cumulative Redeemable Preference Shares (Series I) of H100/- each at a premium of H200/- per share, on the due date of redemption i.e. 30th September, 2013.

The performance of the Company during the current year continues to be encouraging and barring unforeseen circumstances, your Directors expect your Company to achieve better results during the year.

DIVIDEND

Your Directors are pleased to recommend for approval of the members, a dividend of H1.20 per share (i.e. @ 12%) on Equity Shares of H10/- each, involving cash outflow of H21,320,233/- (inclusive of dividend distribution tax of H3,097,033/-) for the financial year 2013-14.

In view of redemption of 50,000, 10% Cumulative Redeemable Preference Shares (Series I) on 30th September, 2013, the dividend accumulated thereon till the date of redemption, had been declared and paid as interim dividend.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is provided in a separate section forming part of the Annual Report.

DIRECTORS

During the year, Mrs. Indu Gupta ceased to be Director of the Company due to withdrawal of nomination by IFCI Venture Capital Funds Ltd. w.e.f. 24.04.2014. The Board places on record its appreciation for the valuable services rendered by her during her tenure as Director of the Company. Subsequently, Mrs. Poonam Garg, was inducted on the Board of Directors of the Company as a Nominee Director of IFCI Venture Capital Funds Ltd. w.e.f. 30.05.2014.

The Board of Directors has re-appointed Shri Sharad Sharma as Joint Managing Director of the Company, for a further period of five years with effect from 1st February, 2014 upon expiry of his term of office and the matter is placed for your approval at the ensuing Annual General Meeting.

Pursuant to the provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri Vishnu Dutt Khandelwal, Director of the Company retires from the Board by rotation and being eligible, he has offered himself for re- appointment.

It is proposed to appoint existing Independent Directors of the Company viz. Shri Anoop Gupta, Shri Surendra Kumar Kabra, Shri Vishwa Nath Chandak and Shri Pradeep Kumar Goenka as the ''Independent Directors'' within the meaning of Section 149 of the Companies Act, 2013 for a term of 5 (five) consecutive years and the matter is placed for your approval at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2014, confirm that:-

a) in preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that year;

c) they 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;

d) they have prepared Annual Accounts on a ''going concern'' basis.

AUDITORS AND AUDITORS'' REPORT

The term of office of the present auditors of the Company, M/s. Mehrotra Rakesh Kumar & Co., Chartered Accountants, Kanpur expires at the conclusion of ensuing Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013, it is proposed to re-appoint them for a further period of three years until the conclusion of the 28th Annual General Meeting of the Company. M/s. Mehrotra Rakesh Kumar & Co., being eligible, have confirmed their willingness to accept office, if re-appointed, at the ensuing Annual General Meeting.

As regards Auditors'' remark in Para 17 to the annexure to their report stating uses of short term funds for long term investments, based on maturity profile of assets and liabilities, it is clarified that as per the requirement of Schedule VI to the Companies Act, 1956, ''Long Term Borrowings'' maturing for payment in next 12 months have been classified under ''other current liabilities''. Due to this classification, the overall Balance Sheet at the end of the year gives the reflection of uses of short term funds for long term investments.

COST AUDITOR

M/s. R. M. Bansal & Co., Cost Accountants (Firm Regn. No.:00022) and M/s. Rakesh Misra & Co., Cost Accountants (Firm Regn. No.: 00249), have been appointed as Cost Auditors of the Company to conduct the audit of the Cost Accounts of the Company in respect of its products ''YARN'' and ''RECYCLED POLYESTER STAPLE FIBRE'' respectively, for the financial year

2013-14 and the Cost Audit Report will be filed with the Central Government by the due date i.e. 27th September, 2014.

Details of Cost Audit Report for the financial year ended 31st March, 2013:-

(a) Due date of filing: 27th September, 2013

(b) Actual date of filing: 9th October, 2013.

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

As per the requirement of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed hereto as Annexure ''A'', forming part of this report.

PARTICULARS OF EMPLOYEES

As none of the employees of the Company was in receipt of remuneration in excess of limits prescribed, particulars of employees under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, are not required to be given.

CORPORATE GOVERNANCE

A separate section on Corporate Governance along with Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record appreciation for the co-operation and support extended by various departments of the Central and the State Government(s), Bankers and Business associates.

Your Directors also wish to place on record appreciation to all the employees for their sincere and dedicated services rendered to the Company and are also grateful to all the shareholders of the Company for reposing continued trust and confidence in the management of the Company.

For and on behalf of the Board

Place : Kanpur (Shyam Sunder Sharmma)

Date : 9th July, 2014 Chairman and Managing Director


Mar 31, 2013

To the Members of Ganesha Ecosphere Ltd.

The Directors have pleasure in presenting the Twenty Fourth Annual Report together with the Audited Statements of Accounts of the Company for the financial year ended 31st March, 2013.

Financial Results

The summarised financial results of the Company for the year ended 31st March, 2013 as compared to the preceding year are as under:

(Rs. in lacs)

Current Year Previous Year (2012-13) (2011-12)

Total Revenue 43,636.42 38,720.42

Profit before Finance Costs, Depreciation and Amortisation 4,818.76 4,338.84

Expense

Less: Finance Costs 1,025.50 1,103.13

Less: Depreciation & Amortisation Expense 1,146.40 1,098.92

Profit before Tax 2,646.86 2,136.79

Tax Expense 234.88 66.91

Profit after Tax 2,411.98 2,069.88

Surplus brought forward from Previous year 4,098.47 3,265.50

Balance available for appropriation 6,510.45 5,335.38

Less: Appropriations

Taxation/ MAT Credit adjustments for earlier years (Net) 33.43 21.38

Reserves

- Capital Redemption 400.00

- Debenture Redemption (499.19) 899.69

- General 60.30 51.75

Interim Dividend of Preference Shares (Series II) 13.33

Dividend Distribution Tax on Interim Dividend 2.16

Proposed Dividend

- Preference Shares 5.00 45.00

- Equity Shares 182.23 182.23

Dividend Distribution Tax on Proposed Dividend 31.82 36.86

Surplus carried to Balance Sheet 6,281.37 4,098.47

Financial and Operational Performance During the Financial Year 2012-13, against a backdrop of an extremely challenging business environment marked by inflation and a slowdown in demand, your Company recorded revenues from operations (net) Rs.43,528.93 lacs as compared with Rs.38,550.61 lacs in 2011-12, thus registering a growth of 12.9% over the last year. The profit after tax during 2012- 13 was placed at Rs.2,411.98 lacs as against Rs.2,069.88 lacs in 2011-12, recording an increase of 16.5%. The improvement in performance of the Company has been mainly on account of increase in production of existing operations and higher realisations due to the manufacture of value-added products.

The Company is leveraging its operational efficiencies and experience in the recycling industry by achieving sustainable growth and consolidating its market share in the long run.

Your Directors are pleased to report that your Company''s green field project for manufacturing of spun yarn from Recycled Polyester Staple Fibre (RPSF) with an installed capacity of 25,920 spindles at Temra, Bilaspur, Distt. Rampur (U.P.) and expansion project to increase the existing recycling capacity at Kanpur unit by 9,000 TPA, has commenced trial production. The expansion project of Recycled Polyester Staple Fibre (RPSF) of 21,000 TPA at Bilaspur, is progressing satisfactorily and expected to be completed in current financial year.

The Directors hope that the additional capacity shall considerably reduce the lead time for delivering new products and also will supply the existing products on much larger scale. The commissioning of these facilities will also lead to an improvement in margins.

During the current year, unfortunate fire accidents were occurred in the UPS room and extruder room respectively of Recycled Polyester Staple Fibre (RPSF) division of the Kanpur unit. The production was temporarily disrupted due to these fire accidents. The unit is completely insured and claims have been lodged with the insurance company.

The performance of the Company during the current year continues to be encouraging and barring unforeseen circumstances, your Directors expect your Company to achieve better results during the year.

Dividend

Your Directors are pleased to recommend for approval of the members, a dividend of Rs.1.20 per share (i.e. @ 12%) on Equity Shares of Rs.10/- each, involving cash outflow of Rs.2,13,20,233 (inclusive of dividend distribution tax of Rs.30,97,033/-), and Rs.10/- per share on 10% Cumulative Redeemable Preference Shares (Series I) of Rs.100/- each, involving cash outflow of Rs.5,84,975/- (inclusive of dividend distribution tax of Rs.84,975/-), for the financial year 2012-13.

Management Discussion and Analysis Report Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is provided in a separate section forming part of the Annual Report.

Directors

In order to broad base the Board, Shri Gopal Singh Shekhavat has been inducted on the Board of Directors of the Company as an Additional Director on 25.05.2013, who holds office up to the date of ensuing Annual General Meeting and is eligible for appointment as Director of the Company. The Board has also appointed Shri Gopal Singh Shekhavat as Whole-time Director of the Company designated as Director (Administration) for a period of five years with effect from 1st June, 2013 and the matter is placed for your approval at the ensuing Annual General Meeting.

During the year, Shri Satpal Kumar Arora ceased to be Director of the Company due to withdrawal of nomination by IFCI Venture Capital Funds Ltd. w.e.f. 25.02.2013. The Board places on record its appreciation for the valuable services rendered by him during his tenure as Director of the Company. Subsequently, Mrs. Indu Gupta, nominee of IFCI Venture Capital Funds Ltd., has been inducted on the Board of Directors of the Company as an Additional Director w.e.f. 25.05.2013, who holds office up to the date of ensuing Annual General Meeting and is eligible for appointment as Director of the Company.

The Board of Directors has re-appointed Shri Vishnu Dutt Khandelwal and Shri Rajesh Sharma as Executive Vice-Chairman and Executive Director of the Company, respectively, for a further period of five years with effect from 19th June, 2013 upon expiry of their term of office and the matter is placed for your approval at the ensuing Annual General Meeting.

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Rajesh Sharma, Shri Pradeep Kumar Goenka and Shri Vishwa Nath Chandak, Directors of the Company retire from the Board by rotation and being eligible, they have offered themselves for re-appointment.

Directors'' Responsibility Statement In terms of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2013, confirm that: -

a) in preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that year;

c) they 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;

d) they have prepared Annual Accounts on a ''going concern'' basis.

Auditors and Auditors'' Report

The term of office of the present auditors of the Company, M/s. Mehrotra Rakesh Kumar & Co., Chartered Accountants, Kanpur expires at the conclusion of ensuing Annual General Meeting and being eligible, they have confirmed their willingness to accept office, if re-appointed.

As regards Auditors'' remarks in Para 9(i) of the Annexure to their report stating slight delay in the payment of the statutory dues in a few cases, it is clarified that the Company had been regular in depositing statutory dues except in few cases of procedural delays, which have been subsequently made good.

Cost Auditor

M/s. R. M. Bansal & Co., Cost Accountants (Firm Regn. No.: 00022) and M/s. Rakesh Misra & Co., Cost Accountants (Firm Regn. No.: 00249), have been appointed as Cost Auditors of the Company to conduct the audit of the Cost Accounts of the Company in respect of its products ''YARN'' and ''RECYCLED POLYESTER STAPLE FIBRE'' respectively, for the financial year

2012-13 and the Cost Audit Report will be filed with the Central Government by the due date i.e. 27th September, 2013.

Details of Cost Audit Report for the financial year ended 31st March, 2012:- (a) Due date of filing: 28th February, 2013 (b) Actual date of filing: 20th February, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo As per the requirement of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed hereto as Annexure ''A'', forming part of this report.

Particulars of Employees

Information required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, from time to time, in respect of employees of the Company is annexed hereto as Annexure ''B'', forming part of this report.

Corporate Governance

A separate section on Corporate Governance along with Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

Acknowledgements

Your Directors take this opportunity to place on record appreciation for the co-operation and support extended by various departments of the Central and the State Government(s), Bankers and Business associates.

Your Directors also wish to place on record appreciation to all the employees for their sincere and dedicated services rendered to the Company and are also grateful to all the shareholders of the Company for reposing continued trust and confidence in the management of the Company.

For and on behalf of the Board

Place : Kanpur (Shyam Sunder Sharmma)

Date : 12th August, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Statements of Accounts of the Company for the financial year ended 31st March, 2012.

Financial Results

The summarised financial results of the Company for the year ended 31st March, 2012 as compared to the preceding year are as under:

(Rs in lacs)

Total Revenue 38720.42 29296.82 Profit before Finance Costs and Depreciation Et Amortisation Expense 4338.84 3636.33

Less: Finance Costs 1103.13 741.13

Less: Depreciation Et Amortisation Expense 1098.92 889.93

Profit before Tax 2136.79 2005.27

Tax Expense 66.91 203.74

Profit after Tax 2069.88 1801.53

Surplus brought forward from Previous year 3265.50 1812.90

Balance available for appropriation 5335.38 3614.43 Less: Appropriations:

Taxation/MAT Credit adjustments for earlier years (Net) 21.38 11.44 Reserves

-General 51.75 45.04

- Debenture Redemption 899.69 49.50

Proposed Dividend

- Preference Shares 45.00 45.00

- Equity Shares 182.23 164.04

Tax on Proposed Dividend 36.86 33.91

Surplus carried to Balance Sheet 4098.47 3265.50

Financial and Operational Performance

During FY 2011-12, your Company recorded revenue from operations (net) of Rs.38550.61 lacs as compared with Rs.29149.54 lacs in 2010-11, thus registering a substantial growth of 32.25 °/o over the last year. The profit aftertax during 2011-12 is increased by 14.90%, being Rs.2069.88 lacs as against Rs. 1801.53 lacs in 2010-11, which is considered satisfactory considering the present market scenario. Despite the challenging economic conditions resulting in inflation and slowdown in demand, we have been able to achieve satisfactory results, during the year. The Company's performance was driven by higher volumes along with improved efficiencies.

During 2011-12, the Company recorded export revenue of Rs.7901.35 lacs as against Rs.4762.21 lacs in 2010-11, thus registered a significant growth of 65.92% over the last year despite global slowdown.

Operational results of financial year under review reflect our ability to control costs, our continued investment in strategic initiatives to improve volume and profitability which in turn helped the Company to deliver superior results.

The Company's expansion plans to increase its existing recycling capacity by 30000 TPA and setting up of project for manufacturing of spun yarn with an installed capacity of 25920 spindles are progressing satisfactorily. These projects are being funded through a judicious mix of internal accruals and borrowings.

During the year, 15,16,000 Equity Shares have been allotted to 'Promoters' on Preferential basis consequent upon conversion of outstanding Warrants and the proceeds of the issue have been utilised for general corporate purposes/ expansion projects. With the said allotment, the total Paid-up Equity Share Capital of the Company stood increased from Rs.1367.00 lacs to Rs.1518.60 lacs.

The Company has redeemed 4,00,000, 10% Cumulative Redeemable Preference Shares (Series II) of Rs. 100/- each at par, on the due date of redemption i.e. 31st July, 2012.

The performance of the Company during the Current Year continues to be encouraging and barring unforeseen circumstances, your Directors expect your Company to achieve better results during the year.

Dividend

Your Directors are pleased to recommend for approval of the members, a dividend of Rs.1.20 per share (i.e. @ 12%) on Equity Shares of Rs.10/- each, involving cash outflow of Rs.2,11,79,459 (inclusive of dividend distribution tax of Rs.29,56,259/-), and Rs.10/- per share on 10% Cumulative Redeemable Preference Shares (Series I Et II) of Rs.100/- each, involving cash outflow of Rs.52,30,013/- (inclusive of dividend distribution tax of Rs.7,30,012/-), for the financial year 2011-12.

In view of redemption of 4,00,000, 10% Cumulative Redeemable Preference Shares (Series II) on 31st July, 2012, the dividend accumulated thereon till the date of redemption, had been declared and paid on these shares as interim dividend.

Management Discussion and Analysis

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is provided in a separate section forming part of the Annual Report.

Directors

In order to broad base the Board, Shri Anoop Gupta has been inducted on the Board of Directors of the Company as an Additional Director on 26.05.2012, who holds office up to the date of ensuing Annual General Meeting and is eligible for appointment as Director of the Company.

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Vishnu Dutt Khandelwal and Shri Surendra Kumar Kabra, Directors of the Company retire from the Board by rotation and being eligible, they have offered themselves for re- appointment.

Directors' Responsibility Statement

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2012, confirm that: -

a) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) they 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 that year;

c) they 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;

d) they have prepared Annual Accounts on a 'going concern' basis.

Auditors and Auditors' Report

The term of office of the present auditors of the Company, M/s. Mehrotra Rakesh Kumar Et Co., Chartered Accountants, Kanpur expires atthe conclusion of ensuing Annual General Meeting and being eligible, they have confirmed their willingness to accept office, if re-appointed.

As regards Auditors' remarks in para 9(i) of the Annexure to their report stating slight delay in payment of statutory dues in a few cases, it is clarified that the Company had been regular in depositing statutory dues except in few cases of procedural delays, which have been subsequently made good.

Cost Auditor

M/s. R. M. Bansal Et Co., Cost Accountants (Firm Regn. No.: 00022), have been appointed as Cost Auditors of the Company to conduct the audit of the Cost Accounts of the Company in respect of its Textile products for the financial year 2011-12 and the Cost Audit Report will be filed with the Central Government by the due date i.e. 31st December, 2012.

Details of Cost Audit Report for the financial year ended 31st March, 2011:-.

(a) Due date of filing: 27th September, 2011

(b) Actual date of filing: 22nd September, 2011

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As perthe requirement of Section 217(1 )(e) of the Companies Act, 1956,

read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed hereto as Annexure A', forming part of this report.

Particulars of Employees

Information required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, from time to time, in respect of employees of the Company is annexed hereto as Annexure 'B', forming part of this report.

Corporate Governance

A separate section on Corporate Governance along with Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

Acknowledgements

Your Directors take this opportunity to place on record appreciation for the co-operation and support extended by various Departments of Central and State Government(s), Bankers and Business associates.

Your Directors also wish to place on record appreciation to all the employees for their sincere and dedicated services rendered to the Company and are also grateful to all the shareholders of the Company for reposing continued trust and confidence in the management of the Company.

For and on behalf of the Board

Place : Kanpur (Shyam Sunder Sharmma)

Date : 13th August, 2012 Chairman and Managing Director


Mar 31, 2010

Statements of Accounts of the Company for the financial year ended 31st March, 2010.

FIN LTS of the Company for the year ended 31st March, 2010 as compared preceding year are as under: (Rs. in lacs) Current Year Previous Year (2009-10) (2008-09)

Total Income 19922.37 13566.50

Profit before Interest and Depreciation 2430.07 1730.61

Less: Interest and Finance expenses 785.37 639.51

Less: Depreciation 691.83 565.54

Profit before Exceptional Item 952.87 525.56

Less: Exceptional Item - 20.99

Profit before Tax 952.87 504.57

Provision for Tax - Current Tax (161.94) (56.13)

- Fringe Benefit Tax - (9.18)

- Deferred Tax (Net) (17.93) (60.45)

- MAT credit available for set off 127.30 55.67

Profit after Tax 900.30 434.48

Surplus brought forward from Previous year1125.48 747.98

MAT Credit recognized for previous years 0.45 -

Taxation for earlier years (Net) (11.66) (4.34)

Balance available for appropriation 2014.57 1178.12 Appropriations:

Interim Dividend

- Preference Shares (45.00) (45.00)

- Equity Shares (49.28) -

Tax on Interim Dividends (16.02) (7.64) Proposed Dividend

- Preference Shares (11.25) -

- Equity Shares (66.85) -

Tax on Proposed Dividends (13.27) -

Surplus carried to Balance Sheet 1812.90 1125.48

OPERATIONS

During the year under review, the Company recorded a substantial increase of 46.92% in its Total Turnover which rose to Rs. 19888.34 lacs from Rs. 13537.11 lacs in 2008-09. The Profit before Interest and Depreciation recorded for the year was Rs. 2430.07 Lacs as against Rs. 1730.61 Lacs in the preceding year, recording an increase of 40.42%. The Profit after Tax was placed at Rs. 900.30 lacs as against Rs. 434.48 lacs in the preceding year, recording an increase of 107.21%.

During the year under review, the Company successfully commissioned 3rd production line of Regenerated Polyester Staple Fibre (RPSF) of 18000 TPA at its Rudrapur unit, thus, resulting into an increase in the consolidated production capacity of RPSF from 39600 TPA to 57600 TPA. With the increased production capacity, the Company has become a largest player in the RPSF Industry across the Country.

To achieve forward integration, the Company diversified itself into the business of manufacturing cushions, pillows and other stuffed products at its Rudrapur Unit, with a total production capacity of 45,00,000 pieces per annum.

Your Directors expect to achieve even better results during the year as the Company will get full benefits round the year of above expansions.

DIVIDEND

During the year under review, the Company has paid an Interim Dividend of Rs. 0.50 per share (i.e. @ 5%) on Equity Shares of the Company. Based on the Companys outstanding performance, your Directors are pleased to recommend for approval of the members, a final dividend of Rs. 0.50 per share (i.e. @ 5%) on Equity Shares of the Company for the financial year 2009-10.

Further, during the year, the Company has also paid an Interim Dividend of Rs. 10/- per share (i.e. @ 10%) on 4,50,000, 10% Cumulative Redeemable Preference Shares (Series I & II) of the Company of Rs. 100 each, including Rs. 2.50 per share with respect to the arrears of dividend for the financial year 2008-09. Your Directors are pleased to recommend for approval of the members, a dividend of Rs. 2.50 per share on said Preference Shares for the financial year 2009-10, being accumulated dividend for a period of 3 months i.e. 01.01.2010 to 31.03.2010.

In future, the shareholders may expect dividend payouts on constant basis depending upon the long term performance of the Company and also keeping in view the requirement of funds for financing Companys growth plans.

FINANCE

During the year under review, the Company has been sanctioned a Term loan of Rs. 7.50 Crores and Rs. 6.90 Crores by State Bank of India and Allahabad Bank, respectively, in order to part finance the capital expenditure for the installation of the 3rd Production Line of Regenerated Polyester Staple Fibre at the Companys unit situated at Rudrapur, Uttrakhand.

During the current year, the Company has been sanctioned Cash Credit Limit of Rs. 2.40 crores from Allahabad Bank, in order to meet an increased requirement of working capital for the smooth running of operations at its newly installed Production line at Rudrapur.

During the year under review, the Company has allotted 35,15,000 Convertible Warrants to the Promoters & Others on preferential basis, out of which 24,65,000 Warrants were converted into equal number of Equity Shares on 25.03.2010 and 10,50,000 warrants were converted into equal number of Equity Shares on 01.04.2010. The aggregate amount of Rs. 656.65 Lacs, raised through the said issue, has been utilized for the expansion project at Rudrapur (Uttarakhand) unit and general corporate purposes. With the said allotment the total paid up Equity Share Capital of the Company, presently stands increased from Rs. 985.50 Lacs to Rs. 1337.00 Lacs.

During the current financial year 2010-11, the Company has also made an allotment of 30,00,000 warrants convertible into equal number of Equity Shares to Promoters & Others, which is outstanding for conversion into Equity Shares till date.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report is provided in a separate section forming part of the Annual Report.

DIRECTORS

The Board of Directors has re-appointed Shri Shyam S. Sharma as Managing Director of the Company for a further period of five years with effect from 18th September, 2010 upon expiry of his term of office and the matter is placed for your approval at the ensuing Annual General Meeting.

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Rajesh Sharma and Shri S.K. Kabra, Directors of the Company retire from the Board by rotation and being eligible they have offered themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2010, confirm that: -

a) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial year and of the Profit of the Company for that year;

c) they 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;

d) they have prepared Annual Accounts on a going concern basis.

AUDITORS AND AUDITORS REPORT

The term of office of the present auditors of the Company, M/s. Mehrotra Rakesh Kumar & Co., Chartered Accountants, Kanpur expires at the conclusion of ensuing Annual General Meeting and being eligible, they have confirmed their willingness to accept office, if re-appointed.

As regards Auditors remarks in para 9(i) of the Annexure to their report stating slight delay in payment of statutory dues, it is clarified that Company is regular in depositing statutory dues although there were slight procedural delay in few cases which were subsequently made good and efforts are being made to regularize the same.

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

As per the requirement of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are annexed hereto as Annexure A, forming part of this report.

PARTICULARS OF EMPLOYEES

As none of the employees of the Company was in receipt of remuneration in excess of limits prescribed, particulars of employees under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, are not required to be given.

CORPORATE GOVERNANCE

A separate section on Corporate Governance along with Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record appreciation for the co-operation and support extended by various Departments of Central and State Government(s), Bankers and Business associates.

Your Directors also wish to place on record appreciation to all the employees for their sincere and dedicated services rendered to the Company and are also grateful to all the shareholders of the Company for reposing continued trust and confidence in the management of the Company.

For and on behalf of the Board

Place : Kanpur (Shyam S. Sharma) Date : 31st July, 2010 Chairman and Managing Director



 
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