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Directors Report of Maral Overseas Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Sixth Annual Report of the Company and the audited financial statements for the year ended the 31st March, 2015.

Financial Results (Rs.in crore)

31.03.15 31.03.14 Current Previous Year Year

Turnover 648.42 653.32

Profit/(Loss) before Tax 17.56 31.15

Less: Taxation 0.87 1.68

Profit / (Loss) after Tax 16.69 29.47

Add: Balance brought forward from (64.10) (91.39) previous year

<47.41- <61.92-

Appropriations:

Contribution to CSR 0.10 -

Proposed Dividend on Preference Shares 1.87 1.87

Tax on Proposed Dividend 0.37 0.32

Balance carried to Balance Sheet (49.75) (64.11)

Number of meetings of the Board

Particulars of the meetings held during the year along with the details regarding the meetings attended by the directors form part of the Corporate Governance Report.

The composition of the Board and its committees has also been given in detail in the report on Corporate Governance.

Dividend

Your Directors recommend to the members, a preference dividend @ 8% p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to various Banks/ Institutions and @ 3% p.a. i.e. Rs. 3/- per share on 12,00,000 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part of promoter and promoter group as per the CDR package.

The aforesaid dividend on CRPS will absorb Rs. 224.19 lac (inclusive of distribution tax). A proposal for confirmation of the dividend on CRPS will be placed before the shareholders at the ensuing Annual General Meeting.

In view of carried forward losses, no dividend is recommended on Equity Shares.

Operations

Your Directors feel pleasure in informing the members that as a result of various improvement measures undertaken by the management in the past few years, your Company, during the year under review, recorded satisfactory turnover and profitability.

The Company achieved a Turnover of Rs. 648.42 crores for the year ended the 31st March, 2015 against Rs. 653.35 crores in the previous year, ended the 31st March, 2014. The Company achieved a net profit of Rs. 16.69 crores against Rs. 29.47 crores in the previous year.

During the period under review, your Company has been able to achieve production of 17877 MT of cotton yarn (17332 MT), 1526 MT of dyed yarn (1406 MT), 3625 MT of grey knitted fabric (3692 MT), 4804 MT of processed fabric (4737 MT) and 49.42 lac pieces of garments (53.35 lac pieces), without any expansion in capacity.

Industry Scenario

India''s textiles and clothing industry is one of the mainstays of the national economy. It is also one of the important sectors in India''s exports contributing nearly 13.25% to the country''s total exports basket. The textiles industry is labour intensive and is one of the largest employers, employing nearly 35 million people.

Government of India has taken various initiatives for the development of the textiles sector i.e 13 new textiles parks were approved which is estimated to bring in private sector investment of about Rs. 3240 crore and generate direct employment for about 35,000 persons over the next three years. Further, with a vision to create friendly economy the government introduced several initiatives i.e. duty free entitlement to garment exporters, 24/7 customs clearance facility resulting in faster clearance of import and export cargo etc.

Over the past few years, India has achieved significant growth in cotton production. About a decade ago, India was barely self sufficient to meet its requirement of cotton from domestic production but is now poised to overtake China to become the world''s biggest producer of cotton this year. During 2014-15, the area under cotton cultivation in India has furthered increased to a record level of 125 lakh hectares. India Cotton Federation (IFC) estimates a record harvest of 40 million bales during 2014-15, a growth of about 8% over 37.5 million bales in 2013-14.

Modernization and Expansion

Your Directors, in their previous report, informed the members about modernization plan to replace some equipment which were very old. Your Directors have pleasure in informing the members, that a modernization & expansion plan involving a capex of Rs. 40 crore has been completed during the year under review. This will result in improvement in quality and productivity leading to higher profitability.

Your Directors, in order to reduce the cost of power generation have approved the project for a 33 KVA Dedicated Feeder line for the supply of power directly from the Grid which involves a total cost of Rs. 103 lac. Further, in order to utilize the full Dye House capacity, your Directors have agreed to purchase additional knitting machines involving a total outlay of Rs. 571 lac. The purchase of additional machines will reduce overall production costs.

Your Directors feel pleasure in informing you that the Company has embarked upon a further modernization of the spinning unit and increase in capacity of Garment unit involving a capital outlay of Rs. 470 lac for Spinning Unit and Rs. 460 lac for Garment Unit to be funded through internal accruals and loans.

No material changes and commitments have occurred between the end of the financial year till the date of the report, which in turn affect the financial position of the Company.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) is core to our business. Your Company always strived to achieve a balance between environment, social imperatives and the expectations of our stakeholders. It is a continuous journey wherein due importance is given to education especially to the girl child, creating a healthy environment, creating new opportunities and maintaining ethical business standard.

With the Corporate Social Responsibility now becoming a statutory obligation, your Directors had during the year under review, formally constituted a Corporate Social Responsibility Committee comprising of Shri P. S. Dasgupta, Shri Shekhar Agarwal and Shri Shantanu Agarwal. Your Directors, upon recommendation of the CSR Committee, adopted CSR Policy during the year and initiated its implementation.

During the year the Company has identified the activity concerning the promotion of education with special focus on girl child education. Further, the Company is in the process of enlarging the scope of CSR activities and other activities to be undertaken.

The detail of the CSR spend by the Company is enclosed as Annexure - I forming part of this report.

Annual Return

Pursuant to Section 92 of the Companies Act, 2013, read with Rule 12 of The Companies (Management and administration) Rules, 2014, the Annual Return is attached as Annexure - II.

Directors and Key Managerial Personnel

Your Directors in their previous report informed the members about the resignation of Shri L.N. Jhunjhunwala, Chairman-Emeritus and the founder of the Company as well as the Group from the directorship of the Company. Your Directors had also informed the members that Shri L.N. Jhunjhunwala upon the unanimous request of the Board of Directors had agreed to continue as Chairman -Emeritus. Your Directors are thankful to Shri L.N. Jhunjhunwala for his continuous guidance to them and the Company.

As informed to the members in the previous report by your Directors, Dr. Kamal Gupta, Shri D.N. Davar and Shri P. S. Dasgupta, Independent Directors were appointed for a term of 5 years by the Shareholders at the last Annual General Meeting held on the 26th September, 2014.

Your Directors further inform the members that, during the year under review, Shri Shantanu Agarwal was appointed as a director of the Company. Smt. Geeta Mathur was appointed as an Additional Director in the category of Independent Director. Smt. Geeta Mathur brings with her vast experience in the field of Banking and Finance.

Your Directors take this opportunity to welcome Shri Shantanu Agarwal and Smt. Geeta Mathur on the Board of Directors. The proposal for confirmation of appointment of Smt. Geeta Mathur as an Additional Director as well as an Independent Director for a term of 5 years shall be put up before the ensuing Annual General Meeting.

Shri Shantanu Agarwal, Director retires by rotation and being eligible offers himself for reappointment.

Your Directors further inform the members that declaration has been taken from the independent directors at the beginning of the financial year stating that they meet the criteria of independence as specified under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

During the year, Shri Shekhar Agarwal, Managing Director & CEO of the Company, Ms. Sweta Garg, Company Secretary of the Company and Shri P. S. Puri, Chief Financial Officer of the Company were designated as Key Managerial Personnel.

Directors'' Appointment and Remuneration Policy

Pursuant to the provision of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors on the recommendation of Nomination and Remuneration Committee has framed a policy for the appointment of Directors and Senior Management and their remuneration. The policy forms part of the Board Report and is annexed as Annexure - III.

Annual Evaluation by the Board

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing agreement, annual evaluation has been done by the Board of its own performance, its Committees and the individual Directors. The manner of evaluation is mentioned in the Nomination and Remuneration policy forming part of this Report.

Further, every independent director of the Company is familiarized with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes.

Particulars of Loans, Guarantees or Investments

Details of loans, Guarantees and Investments are given in the notes to the Financial Statements at appropriate places.

Particulars of Contracts or Arrangements with Related Parties

All contracts / arrangements / transaction entered into by the Company during the financial year with the related parties are on arm''s length basis and in the ordinary course of business. During the financial year, there was no material contract or arrangements entered into by the Company with any of the related party. Your Directors draw attention of the members to Note 2.8.8 to the financial statement which contain particulars with respect to related parties. The policy on dealing with the Related Party Transactions as approved by the Board of Directors is disclosed on the website of the Company under the following link:

http://maraloverseas.com/pdf/Policy_on_Related_Party_Transaction. pdf

Significant and Material Orders Passed by The Regulators or Courts

There are no significant and material orders passed by the regulators or courts.

Auditors Appointment Statutory Auditors

The Company''s Auditors M/s. Doogar & Associates (Firm Reg. No. 000561N) and M/s. Ashim & Associates (Firm Reg. No. 006064N), who retire at the conclusion of the ensuing Annual General Meeting, are eligible for re-appointment. Further, they have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder.

The observations of the Auditors, if any, are explained wherever necessary, in the appropriate notes to the accounts. The Auditors'' Report does not contain qualification, reservation or adverse remark.

Internal Auditors

Pursuant to Section 138 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, the Company has appointed M/s. P.K. Deora & Co., Chartered Accountants (Firm Reg. No. 004167N) and M/s. KRA & Associates, Chartered Accountants (Firm Reg. No. 002352N) as the internal auditors of the Company.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri D.P. Gupta, Practicing Company Secretary holding Membership No. FCS 2411 and Certificate of Practice No. 1509 proprietor of M/s SGS, Company Secretaries, Delhi, as the Secretarial Auditor of the Company. The Secretarial Audit Report does not contain qualification, reservation or adverse remark.

The Report of Secretarial Audit is annexed as Annexure - IV.

Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014 and Notification issued by Ministry of Corporate Affairs dated 31st December, 2014, textile Companies were required to get their cost records audited from the financial year commencing on or after 1st day of April, 2015. The Company has appointed M/s K. G. Goyal & Co. (Firm Reg. No. 000017) as the cost auditor of the Company for the Financial Year 2015-16.

Risk Management Policy

The Company has adopted a risk management policy which aims at creating and protecting shareholders'' value by minimizing threats and weaknesses and identifying and maximizing opportunities. Pursuant to the policy, your Directors periodically review the risks associated with the business or threaten the prospects of the Company.

Corporate Governance

The Company has been practicing good Corporate Governance over a period of time and lays emphasis on transparency, accountability and integrity. Company conforms to the code of corporate governance as stipulated under the Listing Agreement which is also published on the website of the Company.

Report on Corporate Governance along with the Certificate of Auditors, M/s. Doogar & Associates (Firm Reg. No. 000561N) and M/s. Ashim & Associates, (Firm Reg. No. 006064N) Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Whistle Blower Policy

With the objective of pursuing the business in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior and to encourage and protect the employees who wish to raise and report their genuine concerns about any unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct, the Company has adopted a Whistle Blower Policy. The Company has adopted a framework whereby the identity of the complainant is not disclosed. The policy has been disclosed on the website of the Company, the link of which is given hereunder:

http://www.maraloverseas.com/pdf/Whistle Blower Policy.pdf Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required by clause 49 of Listing Agreement, forms part of the Annual Report.

Internal Control Systems

The Audit Committee, in consultation with the Board, is responsible for establishing and maintaining adequate internal control systems in the operations of the Company to ensure that the information, which is provided to the management, is timely and reliable. The controls have been designed to provide a reasonable assurance of maintaining proper accounting controls for ensuring reliability of financial reporting, protecting assets from unauthorized use or losses, compliances with statutory regulations. The Company has continued its efforts to align all its processes and controls with global best practices. These systems ensure that transactions are executed in accordance with specified policies and resources are deployed prudently as per the business plan.

The annual business plan is presented to the Audit Committee at the beginning of every financial year and regular updates are presented on a quarterly basis to the Committee and the Board. The Action Taken Report of the previous meeting is presented in the ensuing meeting and members are regularly updated about the actions taken.

The Company''s internal control systems comprise of compliance by in-house staff supplemented by internal audit checks by the internal auditors.

The internal auditors independently evaluate the adequacy of internal controls and periodically audit the majority of the transactions in value terms. Internal Auditors report directly to the Audit Committee of the Board.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The information required to be disclosed pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Rules, 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - V forming part of this Report.

Particulars of Employees

The information pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the name along with the particulars drawing remuneration in excess of the limits of the employees is annexed as Annexure - VI.

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

Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:

- in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

- appropriate Accounting Policies have been selected and applied consistently and they have 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 on 31st March, 2015 and of the Profit and Loss of the Company for the year ended on that date;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the Annual Accounts have been prepared on a going concern basis.

- that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

- that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Acknowledgements

Your Directors place on record the diligent efforts made by the employees at all levels in discharging their responsibilities. We would like to thank all our clients, vendors, bankers, other business associates, Central and State Government for their continued support and encouragement during the year and their confidence towards the management.

The directors also thank the investors for their continued faith in the Company.

For and on behalf of the Board Ravi Jhunjhunwala

Noida (U.P) Chairman

5th May, 2015 DIN -00060972


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Fifth Annual Report of the Company and the audited financial statements for the year ended the 31st March, 2014.

Financial Results (Rs. in Crore) 31.03.14 31.03.13 Current Previous Year Year

Turnover 653.32 558.90

Profit/(Loss) from operations 31.15 24.18

Less: Taxation 1.69 -

Profit / (Loss) after Tax 29.46 24.18

Add: Balance brought forward from (91.39) (112.96) previous year (61.93) (88.78)

Appropriations:

Proposed Dividend on Preference Shares 1.87 2.23

Tax on Proposed Dividend 0.32 0.38

Balance carried to Balance Sheet (64.12) (91.39)

Dividend

Your Directors recommend to the members, a preference dividend @ 8% p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to various Banks/ Institutions and @ 3% p.a. i.e. Rs. 3/- per share on 12,00,000 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part of promoter and promoter group as per the CDR package.

The aforesaid dividend on CRPS will absorb Rs. 218.58 lac (inclusive of distribution tax). A proposal for confirmation of the dividend on CRPS will be placed before the shareholders at the ensuing Annual General Meeting.

In the light of carried forward losses, no dividend is recommended on Equity Shares.

Operations

Your Directors feel pleasure in informing the members that as a result of varied improvement measures undertaken by the management in the past few years, your Company, during the year under review, recorded further overall growth in turnover and profitability.

The Company achieved a Turnover of Rs. 653.32 crores for the year ended the 31st March, 2014 against Rs. 558.90 crores in the previous year, ended the 31st March, 2013. The Company achieved a net profit of Rs. 29.46 crores against Rs. 24.18 crores in the previous year.

During the period under review, your Company has been able to achieve production of 17332 MT of cotton yarn (16852 MT), 1406 MT of dyed yarn (1300 MT), 3692 MT of grey knitted fabric (3592 MT), 4737 MT of processed fabric (4103 MT) and 53.35 lac pieces of garments (43.65 lac pieces), without any expansion in capacity.

Industry Scenario

The Textile Industry in India plays a significant role in the overall economic development of the country and is in fact, the second largest contributor to the Gross Domestic Product after Agriculture sector. It is also one of the largest contributing sectors to our Country''s exports. The Cotton textile industry in India plays a global role since ages with now a major share in the international trade of cotton yarn.

The Industry began the year on a positive note and maintained its momentum throughout the year. During the most part of the year China and US remained major importers in the global market and India remained the major exporter of Cotton Yarn which in turn led to overall increase in the profitability of the Industry. Fluctuations in the exchange rate also played a significant role in the fortunes of textile industry.

The year under review was generally marked by stability for the textile industry with increase in the demand for cotton yarn. Your Directors are looking forward to the momentum provided by the financial year 2013-14 though, the current scenario indicates a slight depression in the demand and decline in margins. Your Directors are hopeful to meet the challenges that may arise out of this.

Modernization and Expansion

Your Directors, in their previous report, informed the members about implementation of the modernization programme. Your Directors have pleasure in informing the members, that against the modernization programme, the Company has incurred a capex of Rs. 31.55 crore during the year under review. This has resulted in significant improvement in quality and productivity leading to higher profitability. Your Directors feel pleasure in informing you that the Company has embarked upon a further modernization plan to replace some of the equipments which are very old, to ensure further improvements in the productivity and profitability of the Company. The modernization plan will involve a further capex of Rs. 40.00 crores.

Your Directors further inform the members that, encouraged with the performance of Garment Division, your Company, in order to decongest and de-risk its operations, is shifting some of the Garment activity to an additional location at Noida. Your Company is also planning to install further production lines at this additional location in order to boost production, turnover and profitability of the Garment division.

Directors

Your Directors inform the members that Shri L. N. Jhunjhunwala, Chairman-Emeritus and the founder of the Group expressed his desire to relinquish the office of Director so to devote his time to philanthropic activities where he had been deeply involved for a long time. Your Directors respecting his desire accepted his request to resign from the Board and urged him in all earnestness to continue as the Chairman-Emeritus, which he has very kindly accepted. Your Directors honour and taken pride in the contribution of Shri L. N. Jhunjhunwala since the inception of the Company.

Shri Ravi Jhunjhunwla, Director retire by rotation and being eligible offer himself for reappointment.

Your Directors further inform the members that in accordance with the provisions of the Companies Act, 2013, and Clause 49 of the Listing Agreement as per SEBI Circular dated 17th April, 2014, the Company is required to appoint the Independent Directors on the Board to hold office for one more term of five consecutive years and such independent directors shall not be liable to retire by rotation. Dr. Kamal Gupta, Shri D. N. Davar and Shri P. S. Dasgupta have been serving the Board for more than five years. Therefore it is proposed to appoint all of them as Independent Directors for one more term of five consecutive years commencing from ensuing Annual General Meeting.

Shri Shantanu Agarwal was co-opted on the Board as Additional Director with effect from 22nd April, 2014, liable to retire by rotation, and he shall hold office up to the date of ensuing Annual General Meeting. The Board recommends the appointment of Shri Shantanu Agarwal.

Auditors Appointment

M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the company and are eligible for re-appointment.

The observations of the Auditors, if any, are explained wherever necessary, in the appropriate notes to the accounts.

Corporate Governance

The Company has been practicing good Corporate Governance over a period of time and lays emphasis on transparency, accountability and integrity. Company conforms to the code of corporate governance as stipulated under the Listing Agreement which is also published on the website of the Company.

Report on Corporate Governance along with the Certificate of Auditors, M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required by clause 49 of listing agreement, forms part of the Annual Report.

Internal Control Systems

The systems in the operations of the Company ensure that the information which is provided to the management is timely and reliable. The annual business plan is presented to the Audit Committee at the beginning of every financial year and regular updates are presented on a quarterly basis to the Committee. The Action Taken Report of the previous meeting is presented in the ensuing meeting and members are regularly updated about the actions taken.

These systems also provide a robust structure which in turns help in the compliance of various laws and statutes which automatically translate into financial and operational discipline thereby increasing profit margins and protecting the assets of the Company. These systems ensure that transactions are executed in accordance with specified policies and resources are deployed prudently as per the business plan.

The Company''s internal control systems comprise of audit and compliance by in-house staff supplemented by internal audit checks by the internal auditors.

The internal auditors independently evaluate the adequacy of internal controls and periodically audit the majority of the transactions in value terms. Internal Auditors report directly to the Audit Committee of the Board.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules 1988, are given as per Annexure-I to the Directors'' Report.

Particulars of Employees

Statement of particulars of Employees as required to be furnished pursuant to Section 217(2A) of Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is attached hereto and is given in Annexure-II forming part of this Report.

Directors'' Responsibility Statement

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

* in the preparation of the annual accounts, the applicable accounting standards have been followed;

* appropriate accounting policies have been selected and applied consistently and they have 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 on 31st March, 2014, and of the profit of the Company for the year ended on that date;

* proper and sufficient care has been taken 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;

* the Annual Accounts have been prepared on a going concern basis. Acknowledgements

The board greatly appreciates the commitment and dedication of its employees across all levels who have contributed to the growth and sustained success of the Company. We would like to thank all our clients, vendors, bankers, other business associates, Central and State Government for their continued support and encouragement during the year.

The directors also thank the investors for their continued faith in the Company.

For and on behalf of the Board

Ravi Jhunjhunwala Noida (U.P) Chairman 22th April, 2014 DIN - 00060972


Mar 31, 2013

The Directors have pleasure in presenting the Twenty Fourth Annual Report of the Company and the audited Financial Statements for the year ended the 31st March, 2013.

financial Results (Rs.in Crore) 31.03.13 31.03.12 Current Previous Year Year

Turnover 558.90 535.91

Proft/(Loss) from operations 24.18 (1.95)

Less: Taxation - -

Proft / (loss) after Tax 24.18 (1.95)

Add: Balance brought forward from (112.96) (112.96)

previous year

Add: Transfer from General Reserve 3.71

(88.78) (111.20)

Appropriations:

Proposed Dividend on Preference Shares 2.23 1.51

Tax on Proposed Dividend 0.38 0.25

Balance carried to Balance Sheet (91.39) (112.96)

Dividend

Your Directors recommend to the members, a preference dividend @ 8% p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to various Banks/ Institutions and @ 3% p.a. i.e.Rs. 3/- per share on 12,00,000 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part of promoter and promoter group, in accordance with CDR package.

Your Directors also recommend the payment of arrears of dividend for the fnancial year 2011-12 @ 3% p.a. i.e. Rs. 3/- per share on 12,00,000 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part of promoter and promoter group, which were not paid last year due to unavailability of profts.

The aforesaid dividend on CRPS will absorb Rs. 260.70 Lacs (inclusive of distribution tax). A proposal for confrmation of the dividend on CRPS will be placed before the shareholders at the ensuing Annual General Meeting.

No dividend is recommended on the Equity Shares.

Operations

Your Directors have the pleasure in informing the members that, during the year under review, your Company made a healthy come- back by improving its performance. Maintaining momentum provided by the last quarter of the fnancial year 2011-12 and with several measures taken by your Directors and top management such as cost control, quality assurance, process optimization etc. The Company has shown improvement in its operations as well as fnancial fgures during the year under review.

The Company achieved a Turnover of Rs. 558.90 Crores for the year ended the 31st March, 2013 against Rs. 535.91 Crores in the previous year ended the 31st March, 2012. The Company achieved an operating proft of Rs. 65.74 Crores againstRs. 43.95 Crores in the previous year.

During the period under review, your Company has been able to achieve a production of 16852 MT of cotton yarn (16004 MT), 1300 MT of dyed yarn (1108 MT), 3592 MT of grey knitted fabric (3457 MT), 4103 MT of processed fabric (4085 MT) and 43.65 lakhs pieces of garments (45.44 lakhs pieces).

Industry Scenario

During the year under review the textile industry showed positive trend in contrast with the previous fnancial year i.e. 2011-12 which suffered from high volatility in commodity prices and depleted global demand causing pressure on realizations and margins. The year under review showed improvement in global demand and also rupee realisations of yarn increased partially due to rupee depreciation against the USD and Euro, besides improvement in capacity utilization and machine effciency which resulted in growth in revenues. The year was also marked by stability and restoration of operating margins for textile industry across the value chain led by steady cotton prices and improved demand for cotton yarn.

Your Directors are looking forward to keep the momentum provided by the fnancial year 2012-13 and hope that the current demand will continue and that the Company would be able to sustain the trend in the ensuing year.

Modernisation

Your Directors are pleased to inform the members that in view of the improved cash fows from operations your Company, during the year under review, planned a modernization programme at its Sarovar unit involving a capital outlay of Rs. 41.20 Crores. Your Directors are hopeful that with implementation of the aforesaid mordernisation programme the operations of the Company shall improve signifcantly in terms of quality, productivity as well as proftability. Your Company is expected to reap the benefts of this mordernisation programme during the current fnancial year onwards.

Directors

Shri L. N. Jhunjhunwala and Shri P. S. Dasgupta, Directors, retire by rotation and being eligible, offer themselves for reappointment.

Shri Shekhar Agarwal was re-appointed as Managing Director of the Company for a further period of three years with effect from 1st April, 2013 to 31st March, 2016, subject to the approval of the members of the Company. The Board recommends the re-appointment of Shri Shekhar Agarwal.

Auditors

M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company, and are eligible for re-appointment.

The observations of the Auditors if any are explained wherever necessary, in the appropriate notes to the accounts.

The Company, during the period 2008-2009, reported its potential sickness to the Board for Industrial and Financial Reconstruction in accordance with the Section 23(1)(a)(ii) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Your Directors further state that with the corrective/effective measures taken your Company has made cash profts in the fnancial year ended 31st March, 2013 and preceding two fnancial years.

Corporate governance

Report on Corporate Governance along with the Certifcate of Auditors, M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, confrming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required by Clause 49 of the Listing Agreement, forms part of the Annual Report.

Internal Control Systems

The Company has in place adequate internal control systems commensurate with its size and nature of business. These systems not only provide a reasonable assurance in respect of providing fnancial and operational information but also compliance with applicable statutes and safeguarding of assets of the Company. These systems ensure that transactions are executed in accordance with specifed policies and resources are deployed as per the business plan.

The Company has an in-house Internal Audit Division and the head of internal audit function reports directly to the Audit Committee to ensure independence of this function.

Particulars of Employees

There was no employee drawing remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and any amendment thereto.

Energy Conservation, Technology Absorption and foreign Exchange Earnings and Outgo

The particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under

Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules 1988, are given as per Annexure-I to the Directors'' Report.

Directors'' Responsibility Statement

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

- in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

- appropriate Accounting Policies have been selected and applied consistently and they have 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 on 31st March 2013, and of the Proft or Loss of the Company for the year ended on that date;

- proper and suffcient care has been taken 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;

- the Annual Accounts have been prepared on a ‘going concern'' basis.

Acknowledgements

Your Directors express their gratitude to Customers, Dealers and Suppliers, Investors, Members, Banks, Financial Institutions, Central and State Governments for the continued support and co-operation extended by them to the Company. Your Directors also thank the employees of the Company across all levels for the sincere and hard work put in by them during the year under review.

For and on behalf of the Board

Ravi Jhunjhunwala

Noida (U.P) Chairman

30th April, 2013 DIN -00060972


Mar 31, 2012

The Directors have pleasure in presenting the Twenty Third Annual Report of the Company and the audited financial statements for the year ended the 31st March, 2012.

financial Results

(Rs. in Crore) 31.03.12 31.03.11 Current Previous Year Year

Turnover 535.91 510.39

Profit/(Loss) from operations (1.95) 12.87

Less: Taxation - -

Profit / (loss) after Tax (1.95) 12.87

Add: Balance brought forward from (112.96) (123.73)

previous year

Add: Transfer from General Reserve 3.71 -

(111.20) (110.86)

Appropriations:

Proposed Dividend 1.51 1.81

Tax on Proposed Dividend 0.25 0.29

Balance carried to Balance Sheet (112.96) (112.96)

Dividend

The Company has received the approval of Ministry of Corporate Affairs under section 205A(3) of the Companies Act, 1956 to pay the dividend out of reserves on 8% Cumulative Redeemable Preference Shares (CRPS). Accordingly, your Directors recommend to the Annual General Meeting, a preference dividend @ 8% p.a. i.e Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued to the Banks pursuant to the Corporate Debt Restructuring (CDR) Scheme approved by the CDR Cell under the aegis of Reserve Bank of India.

The dividend on CRPS will absorb Rs.176 Lacs (inclusive of distribution tax). A proposal for declaration of the dividend on 8% CRPS will be placed before the shareholders at the ensuing Annual General Meeting.

No dividend is recommended on 3% CRPS held by promoters as well as Equity Shares of the Company.

Operations

During the year under review the operations of the Company got affected on account of high volatility in cotton prices in the first half of the financial year under review and unremunerative realisations. This affected the profitability of the Company to a great extent coupled with other factors such as increased competition from the neighbouring Countries and recession in the global demand. The adverse results were further affected by mark to market loss on account of foreign exchange booking on account of export orders due to depreciation of Indian Rupee against US dollar.

Your Directors took several measures to over come the situation by adhering to cost cutting measures and by increasing the operational

efficiencies. Your Directors feel pleasure in informing the members that operations of the Company showed recovery in the last quarter of the financial year under review.

Your Directors are hopeful that the Current Financial year will reflect positive trend in operational performance and profitability of the Company as evident from the results for the first half of the current financial year.

The Company achieved a Turnover ofRs. 535.91 Crores for the year ended the 31st March, 2012 againstRs. 510.39 Crores in the previous year ended the 31st March, 2011. The Company achieved an operating profit of Rs. 43.95 Crores against Rs. 59.42 Crores in the previous year.

During the period under review, your Company has been able to achieve a production of 16004 MT of cotton yarn (16562 MT), 1108 MT of dyed yarn (1117 MT), 3457 MT of grey knitted fabric (3050 MT), 4085 MT of processed fabric (3992 MT) and 45.44 lakhs pieces of textile made-ups (36.63 lakhs pieces). Due to adverse business condition the spinning unit had to be partially closed for 68 days in July/August, 2011 leading to a loss in production of 524.31 MT.

Industry Scenario

With the high volatility in commodity prices, high interest rates and power costs and slack in demand in the key export markets, the textile and clothing industry has been facing tough times since the last one year. On global front the economic disruptions in the US and euro-zone on account of sustained weakness of demand sentiments, increasing commodity prices, overheating in certain emerging markets, geopolitical tensions and questions raised by rating agencies on the US economy contributed to the diminished performance of the textile industry. However, the last quarter of the year under review has brought marginal relief to the industry due to stability in the commodity prices and a slight improvement in global demand.

Your Directors hope that the improved market conditions and with the necessary corrective measures being taken, Company would be able to report improved performance in coming years.

Directors

Shri D. N. Davar and Dr. Kamal Gupta, Directors, retire by rotation and being eligible, offer themselves for reappointment.

Auditors

M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company, and are eligible for re-appointment.

The observations of the Auditors are explained wherever necessary, in the appropriate notes to the accounts.

Upto financial year 1999-2000, the Company was treating plant & machinery of spinning unit as continuous process plant and, was accordingly charging depreciation based on an estimated useful life of 18 years. The estimated useful life was revised to 13 years on the basis of the then available technology indicators. From 2008-2009, based on usage, technology and efficiency parameters, the Company, in order to reflect a more appropriate preparation/ presentation of financial statements, has revised the estimated useful life of such plant & machinery by reinstating the same to 18 years.

The Company, during the period 2008-2009, reported its potential sickness to the Board for Industrial and Financial Reconstruction in accordance with the Section 23(1)(a)(ii) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Your Directors further state that with the corrective/effective measures taken your Company has made cash profits in the financial year ended March 31, 2012 and preceding two financial years.

Corporate governance

Report on Corporate Governance along with the Certificate of Auditors, M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required by Clause 49 of listing agreement, forms part of the Annual Report.

Internal Control Systems

Your Company has in place adequate systems of internal control and procedures covering all financial and operating functions. The Audit Committee reviews the Internal Audit Reports and ensures that the Internal Control Systems are in place and functioning effectively in the organization to help ensure that applicable statutes and regulations are complied with and recommends to the Board any changes in the system of Internal Controls, procedures and practices which they determine to be appropriate. Details on the composition and functions of the Audit Committee can be found in the chapter on Corporate Governance of the Annual Report.

Particulars of Employees

There was no employee drawing remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and any amendment thereto.

Energy Conservation, Technology Absorption and foreign Exchange Earnings and Outgo

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are given as per Annexure - I to the Directors' Report.

Directors' Responsibility Statement

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

in the preparation of the annual accounts, the applicable accounting standards have been followed;

appropriate accounting policies have been selected and applied consistently and they have 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 on 31st March 2012, and of the profit or loss of the Company for the year ended on that date;

proper and sufficient care has been taken 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; the Annual Accounts have been prepared on a going concern basis.

Acknowledgements

Your Directors take this opportunity to express their appreciation for the assistance and continued support of the Customers, Suppliers, Bankers, Financial Institutions, Central and State Governments and Shareholders. Your Directors also acknowledge the dedicated service rendered by the Employees of the Company at all levels.

For and on behalf of the Board

Ravi Jhunjhunwala

Noida (U.P) Chairman

29th October, 2012 DIN -00060972


Mar 31, 2010

The Directors have pleasure in presenting the Twenty First Annual Report of the Company and the audited financial statements for the Six Months period ended the 31st March, 2010

Financial Results

(Rs in crore)

31.03.10 30.09.09

Current Previous

Year Year

(6 Months) (18 Months)

Net Turnover 199.62 518.63

Profit/(Loss) from operations 3.59 (41.47)

Less: Taxation 0.09 0.40

Profit / (Loss) after Tax 3.50 (41.87)

Add: Balance brought forward

from previous year (126.32) (84.45)

(122.82) (126.32)

Appropriations:

Proposed dividend on cumulative 0.78 -

redeemable preference shares

Tax on dividend thereon 0.13 -

Balance carried to Balance Sheet (123.73) (126.32)



Financial Year

The last financial year of the Company was extended by six months and accordingly, ended on the 30th September, 2009 for a period of 18 months. However, the accounts of the Company for the year ended the 31st March, 2010 have been prepared for the six months period i.e. from 1st October, 2009 to 31st March, 2010.

Operations

Your Director feel pleasure in informing the members that after successful implementation of CDR package in the previous financial year coupled with improvement in market conditions, your Company achieved a significant improvement in its performance during the period under review. The Company achieved a Turnover of Rs. 199.62 Crores for the year ended the 31st March, 2010 (six months period) against Rs. 518.63 Crores in the previous year ended the 30th September 2009 (eighteen months period). The Company achieved an operating profit of Rs. 25.89 Crores against Rs. 29.43 Crores in the previous period.

During the period under review, your Company has been able to achieve a production of 8452 MT (23010 MT) of cotton yarn, 548 MT (1471 MT) of dyed yarn, 1348 MT (3687 MT) of grey knitted fabric, 2043 MT (4566 MT) of processed fabric and 17.99 lakhs (52.01 lakhs) pieces of textile made-ups.

Dividend

Your Directors recommend to the Annual General Meeting, a preference dividend @ 8% p.a i.e Rs. 4/- per share on 18,85,400 Cumulative Redeemable Preference Shares of Rs. 100/- each issued to various Banks/Institutions; @ 3% p.a i.e Re. 0.50 per share on 6,00,000 Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each issued to persons forming part of promoter and promoter group, in accordance with CDR package.

The dividend on CRPS will absorb Rs. 91.74 Lacs (inclusive of distribution tax). A proposal for confirmation of the dividend on CRPS will be placed before the shareholders at the ensuing Annual General Meeting.

No dividend is recommended on the Equity Shares.

Industry Scenario

The textile industry in the past two years witnessed a steep decline in realizations and faced intense competition from low cost neighboring countries. These margins were further reduced significantly in the wake of world wide recession, dampened sentiments and demand. However, due to the change in sentiments on account of partial recovery of US and European Economies and the recovery and revival of the Countrys economy, Textile industry started showing improvement from the second half of previous calendar year. This has resulted in an increase in Textile Exports from the country coupled with improved demand in the domestic markets. However, there is a slight concern on account of appreciation in Rupee against USD.

Your Directors sincerely hope that the current uptrend in demand will continue to enable your Company to report further improvement in its performance in future years.

Directors

Dr. Kamal Gupta and Mr. L.N. Jhunjhunwala, Directors, retire by rotation and being eligible, offer themselves for reappointment.

Potentially Sick Company

Your Directors are pleased to inform that with the corrective/effective measures taken by the Company [including implementation of Corporate Debt Restructuring (CDR) package], the operations of the Company have improved considerably and the Company is on revival path.

Auditors

M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company, and are eligible for re-appointment.

The observations of the Auditors are explained wherever necessary, in the appropriate notes to the accounts.

Upto financial year 1999-2000, the Company was treating plant & machinery of spinning unit as continuous process plant and was, accordingly charging depreciation based on an estimated useful life of 18 years. The estimated useful life was revised to 13 years on basis of the then available technology indicators. From 2008-2009, based on usage, technology and efficiency parameters, the Company, in order to reflect a more appropriate preparation/ presentation of financial statements, has revised the estimated useful life of such plant & machinery by reinstating the same to 18 years.

The Company, during the period 2008-2009, reported its potential sickness to the Board for Industrial and Financial Reconstruction in accordance with the Section 23(1)(a)(ii) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Your Directors further state that with the corrective/effective measures taken and improvement in market conditions, the Company has made Net profit in the last financial year ended the 31st March, 2010.

Corporate Governance

Report on Corporate Governance along with the Certificate of Auditors, M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required by clause 49 of listing agreement, forms part of the annual report.

Internal Control Systems

Your Company has in place adequate systems of internal control and procedures covering all financial and operating functions. The Audit Committee reviews the Internal Audit Reports and ensures that the Internal Control Systems are in place and functioning effectively in the organization to help ensure that applicable statutes and regulations are complied with and recommends to the Board any changes in the system of Internal Controls, procedures and practices which they determines to be appropriate. Details on the composition and functions of the Audit Committee can be found in the chapter on Corporate Governance of the Annual Report.

Particulars of Employees

Particulars of Employees as required to be furnished pursuant to Section 217(2A) of Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 are attached hereto and forms part of the Report as Annexure-I.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are given as per Annexure-II to the Directors Report.

Directors Responsibility Statement

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

- in the preparation of the annual accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been selected and applied consistently and they have 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 on 31st March 2010, and of the profit or loss of the Company for the Six months period ended on that date;

- proper and sufficient care has been taken 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;

- the Annual Accounts have been prepared on a going concern basis.

Acknowledgements

Your Directors take this opportunity to express their appreciation for the assistance and continued support of the Customers, Suppliers, Bankers, Financial Institutions, Central and State Governments and Shareholders. Your Directors also acknowledge the dedicated service rendered by the Employees of the Company at all levels.



for and on behalf of the Board

Noida (U.P.) Ravi Jhunjhunwala

27th April, 2010 Chairman

DIN : 00060972

 
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