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Directors Report of Mayur Leather Products Ltd.

Mar 31, 2015

The Directors have pleasure in presenting their 30th Annual Report on the business and operations of your Company along with Audited Financial Statements Annual Accounts for the Financial year ended 31st March, 2015.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended on 31st March, 2015 is as follows:

Particulars 31.03.2015 31.03.2014

Turnover (FOB) 2,80,801,668.00 2,31,021,672.64

Other Income 10,859,279.60 10,612,583.16

Less: Total Expenditure 273547783.55 2,16,818,221.89

Profit before interest, depreciation 18113164.05 24,816,033.91 and tax

Interest 5,247,576.55 3,522,816.18

Depreciation 6012565.72 3,771,248.00

Profit before Exceptional & extra - 6853021.78 17,521,969.73 ordinary items & Tax

Less: Exceptional Item 10,660.00 1,732,759.85

Add/Less: Extra Ordinary Items

Profit before Tax 6842361.78 15,789,209.88

Less: Deferred tax (8,88,085.00) (1,019,729.00)

Less: Income tax 2,822,063.00 6,271,373.00

Net Profit/ (Loss) after Tax for the 4908383.78 10,537,565.88 year

Profit/ (Loss) brought forward 78970942.80 74308524.92

Fixed Assets Carrying Amount Revert 1559622.25

Profit available for appropriation 85438948.83 84846090.80

Appropriations:

Interim Dividend on Equity Shares for the year 2417400.00 2417400.00

Proposed dividend on equity shares 2417400.00 2417400.00

Tax on proposed dividend 966676.00 840348.00

Transfer to general reserve 2,00,000.00 2,00,000.00

Fixed Assets Written Off 587406.94 0.00

Deferred Tax Liability adjusted due to 300848.00 0.00 Schedule II Effect

Balance carried forward 78549217.89 78970942.80

Previous year figures have been re-grouped and rearranged wherever considered necessary.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

2. OPERATIONS

Currently in India, the national economy and marketplace is undergoing rapid changes and transformation. The volatility in the macroeconomic environment during the FY 2014-15 continued to ] cast its shadow and most of the markets where Mayur Leather operates, were impacted. Today the companies are operating in such a marketplace where the survival of the fittest is the law. Even in this environment, the Company recorded an exemplary financial performance. The major contributing factors for such all-round performance across all the geographies and industry verticals was the Company's customer-centric approach and its ability to innovate customer specific products, focus on pricing, disciplined execution of complex projects and the rigor in following strong internal processes. This coupled with favorable foreign exchange rate provided better profit margin.

Changing economic scenario and business conditions, evolving consumer preferences, rapid technological innovations and adoption and globalization are driving Mayur Leather to transform the manner in which they operate.

Major challenge is high inflation rate in India and shortage of Leather. This is posing a big problem as the acceptability selling price does not increase in the same ratio as compare to increase in cost of Raw Material. Especially Leather which has been increasing 15% to 25% per annum along with shortage of availability is a huge challenge. Your Company is now focused on its core business objective i.e. growth, profitability and asset efficiency.

During the year 2013- 14, revenue from operation increased by 6.21% as compared to year 2012- 2013 and in current year we have achieved 21.55% increment as compared to previous year.

The table below shows the comparative growth in revenue of the Company since last three years:

Financial year Revenue from Other income Total revenue operations

2012-13 Rs. 2175.13 Lacs Rs. 65.49 Lacs Rs.2240.62 Lacs

2013-14 Rs. 2310.22 Lacs Rs. 106.13 Lacs Rs.2416.35 Lacs

2014-15 Rs. 2808.02 Lacs Rs. 108.60 Lacs Rs. 2916.62 Lacs

In order to increase our market share to offset the decline in export, the Company has taken various steps, major of them are follows:

a. In collaboration with M/s UVEX our German buyers:

European union is under recession. We are trying to stabilize our turnover and increase our customer base and product profile

b. We undertook project implementation to start Vulka Shoe production for the Company Heckel Securite, France.

This has helped to nullify the reduction in exports to Europe over the last few years.

c. Development is on for new customers in Oman and Qatar to nullify reduction due to recession in middle east. We are also making efforts to develop addition customers in the middle east to support these efforts.

d. We are undertaking various activities to develop local Indian market:

Our presence in the local market was negligible in the year 2006 -07. We have started activities during the year 2007-08 & by 2008-09 our local market was approx. 29429 Pairs valued at approx.Rs. 1.49 Crores. In the year 2010-11 our local turnover was increased approx. 64% incomparison with the year 2009-10.During the year 2011-12 & 2012-13 due to recession effect on local market our local turnover was stable in both the years, it was around 1.50 Crore in each year.

During the FY. 2013-14 we achieved a target sale of 63860 Pairs in domestic Market valued at Rs 3.78 Crore Approx. which is a tremendous increment in domestic sales almost 152 % as compared to Previous Year. In Current Year the scale has got higher by sale of 92191 Pairs inDomestic Market valued at 6.72 Crore Approx. Efforts are on to increase local market hence tosupplement decrease in export market.However the thrust is to enter the Indian market in a bigway as even in India people are moving towards safety consciousness and demand is slowlyincreasing for quality safety footwear even though price expectation is a challenge. We expect to supplement the decrease in demand in Europe due to recession with increase in domestic supplies.

e. Company working very hard to enter into Domestic Institutional Sales to Government Paramilitary and Police Departments.

With reference to the above steps taken by the Company, the Company is confident of recovering the lost ground due to the recession in Europe.

However, there is one uncertainty in export business and that is the status of EURO. At the moment, it is very volatile and has decreased as compared with US Dollar from 1.33 to 1.11. Exchange rate is difficult to predict, but it is a global phenomenon and both the exporters and the importers in Europe will have to find a solution to it. The rate of US dollar is in favors of export market it has been increased from 59.95 to 61.50 as compared to previous year.

We have also gone in for diversification. The idea is to expand business areas in same line of business and for the purpose of the same the Company intends to enter into business of Sandals/sleepers also.

The Company acknowledges the importance of the plant and employees as the base behind the success of the Company. Your Company believes that it's the teamwork of the employees which enables Company to reach the new heights. The Company is committed to work together keeping in full trust on each other and strive to keep itself in the high growth trajectory to achieve newer heights.

3. RESERVES

For the period under review the Board proposes to transfer Rs 2.00 Lacs to General Reserve Account of the Company.

4. DIVIDEND

Your Company has always strived to maintain a balance by providing an appropriate return to the shareholders while simultaneously retaining a reasonable portion of the profit to maintain healthy financial leverage with a view to support and sustain the future growth. Company has a concerted dividend policy which ensures the availability of sufficient distributable income to its members. Your Company has paid 1 (One) interim dividend of Rs.0.50 per equity share of Rs 10/- each (i.e.5%) during the financial year ended on 31st March 2015. Board of Directors is pleased to recommend final dividend of Rs. 0.50 per equity share of Rs. 10/- each (i.e. 5%), for the year 2014-15 subject to approval of Shareholders in the Annual General Meeting.

The total outgo on account of dividend payment, including dividend tax, is Rs.58.01 Lacs.

5. EXTRACT OF ANNUAL RETURN

Relevant extract of Annual Return as on the Financial Year ended on March 31st, 2015 is given in ANNEXURE II to this Report.

6. MEETINGS OF THE BOARD

Eleven (11) meetings of the Board of Directors were held during the year. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. For further details, please refer report on Corporate Governance of this Annual Report.

7. DEPOSITS

In the beginning of the Financial Year 2014-15, there were no deposits lying with the Company and further it is clarified that no money have been received which fall under the category of deposits during the Financial Year 2014-15.

8. CAPITAL STRUCTURE

During FY 14-15, there is no change in the capital structure of Company. The Authorised Share Capital of Company is Rs. 5.80 Crores and Paid up share Capital of Company is Rs. 4.83 Crores.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Rajendra Kumar Poddar (DIN: 00143571), Director of the Company whose period of office is liable to retire by rotation pursuant to provisions of Company Act, 2013 and Article 39 of the Articles of Association of the Company retires by rotation at the ensuing AGM and being eligible offers himself for reappointment.

During the year under review, Board of Directors has confirmed the appointment of Mr. Nitesh Kumar Kumawat, DGM Corporate of the company as Chief Financial Officer in the category of key managerial personnel [KMP] of the Company with effect from May 30, 2014 and further with effect from same date re-designated Mr. Rajendra Kumar Poddar, CEO of the company in the category of key managerial personnel [KMP] of the Company. Moreover the Board has confirmed the redesignation of Ms. Amita Poddar as a Chairman of the Company w.e.f 31.07.2014.

Further, During the year under review, pursuant to the provision of Section 203 read with Sections 2(19) & 2(51) of Companies Act, 2013 and Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions ( including any modification or re- enactment thereof ), if any, of the Companies Act, 2013 and clause 47(c) of Listing agreement holding the prescribed qualification under Section 2(24) of the Companies Act, 2013, Board of Directors appointed Ms. Swati Dubey as a Whole time Secretary of the Company in the category of key managerial personnel [KMP] of the Company with effect from August 09, 2014.

10. APPOINTMENT OF INDEPENDENT DIRECTOR

As per the provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a term of five consecutive years, but shall be eligible for reappointment on passing of a special resolution by the Company and shall not be liable to retire by rotation. The Independent Directors i.e., Mr. Madhusudan Prasad Kejriwal & Mr. Madhukar Chaturvedi have affirmed that they continue to meet all the requirements specified under sub-section (6) of Section 149 of the Companies Act, 2013 in respect of their position as an "Independent Director" of Mayur Leather Products Limited.

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

11. FORMAL ANNUAL EVALUATION

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors.

The Company have also engaged the professionals for looking at the best practices prevalent in the industry and advising with respect to evaluation of board members. On the basis of recommendations of the professionals and the policy for performance evaluation of Independent Directors, Board, Committees and other individual directors, a process of evaluation was followed by the board for its on performance and that of its committees and individual directors. The details of programmes for familiarization of independent directors with the Company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the Company and related matters have been elaborately devised by the top management and efforts are being made to create the awareness about the same and the same has been posted as Company's website www.mayurgroups.net.

12. COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The Company has constituted the Audit Committee in line with the provision section 177 (1)of the Companies Act, 2013 and the listing agreement entered by the Company with the stock exchanges. The Audit Committee comprises Independent Directors namely Shri Madhukar Chaturvedi (Chairman) and Shri Madhusudan Prasad Kejriwal and Mrs. Amita Poddar as other members. All the recommendations made by the Audit Committee were accepted by the Board. For further details kindly refer Report on Corporate Governance annexed with the Annual Report.

NOMINATION AND REMUNERATION COMMITTEE

The Company has constituted the Nomination and Remuneration Committee in line with the provision of the Companies Act, 2013 and the listing agreement entered by the Company with the stock exchanges. The Nomination and Remuneration Committee comprises Independent Directors namely Shri Madhusudan Prasad Kejriwal (Chairman) and Madhukar Chaturvedi and Shri Rajesh Virendra Gupta as other members. For further details kindly refer Report on Corporate Governance annexed with the Annual Report.

The policy formulated by Nomination and Remuneration Committee on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters as specified under section 178(3) of the Companies Act, 2013 and same was approved by the Board of Directors of the Company.

STAKEHOLDER'S RELATIONSHIP COMMITTEE

The Company has constituted the Stakeholder's Relationship Committee in line with the provision of the Companies Act, 2013 and the listing agreement entered by the Company with the stock exchanges. The Stakeholder's Relationship Committee comprises Independent Directors namely Shri Madhusudan Prasad Kejriwal (Chairman) and Madhukar Chaturvedi and Shri Rajendra Kumar Poddar and Mrs. Amita Poddar as other members. For further details kindly refer Report on Corporate Governance annexed with the Annual Report. Ms. Swati Dubey acts as a Compliance Officer for this Committee.

13. AUDITOR'S OF THE COMPANY:

STATUTORY AUDITOR

M/s. Madhukar Garg & Co., Chartered Accountants, Jaipur having FRN 000866C were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 08th September, 2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained a written certificate from the above mentioned Auditors to the effect that they conform with the limits specified in the said Section and that they are not disqualified for appointment within the meaning of Section 141 of the said Act.

As required under clause 41 of Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the peer review Board of ICAI.

STATUTORY AUDITOR'S REPORT

The qualification/observation of the Auditor's given in the Auditor's Report are self-explanatory and have been explained/ clarified, wherever necessary, in the notes to the Financial Statements.

Further Company failed to comply with provisions of Sec. 123 sub clause (4) of companies Act 2013 with regard to deposit of interim dividend in schedule bank in a separate account within five days from the date of declaration of dividend due to addition in the bank paper formalities for opening of bank account and henceforth delay occurred on the event of liasoning with the Bank regarding the same and resultantly getting the documents signed by Authorized Signatory of the Company. Though there was delay in deposit of interim dividend in schedule bank in a separate account but the company dispatched all the dividend warrants within thirty days of declaration of dividend so that no inconvenience will be caused to our shareholder.

SECRETARIAL AUDITOR

The Board has appointed M/s Jaks & Associates, Practicing Company Secretaries to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as ANNEXURE I to this Report.

The Company is pleased to inform M/s V. M. Associates, Company Secretaries in practice, Jaipur as Secretarial Auditor of the Company to carry out Secretarial Audit of the Company for the financial year 2015-16.

SECRETARIAL AUDITOR'S REPORT

The Secretarial Audit Report for the financial year ended 31st March, 2015 is self-explanatory and have been explained/clarified, wherever necessary.

Further with reference to the lack of independent director in the composition of the Board as per Listing Agreement, Company is sincerely in process to appoint an Independent Director. There is no malafide intention of the company behind the delay in the appointment of an Independent Director.

COST AUDITOR

The requirement of Cost Audit in your industry has been excluded/removed in The Companies (Cost Records and Audit) Rules, 2014, issued by the Ministry of Corporate Affairs vide its notification dated 30th June, 2014. Therefore, no appointment was made of the Cost Auditor to carry out the Cost Audit for the financial year ended 31st March, 2015.

14. HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its employees are its principal assets and that it's continued growth is dependent upon the ability to attract and retain quality people. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the company to achieve its business objectives. The morale of employees continued to remain high during the year contributing positively to the progress of the Company. However aspirations of employees in India remain to be high. This is a challenge as only growth can fulfill these aspirations and in today's market scenarios one has to perform extraordinarily to achieve growth.

The Company has always provided a congenial atmosphere for work to all sections of the society. Your Company is committed to respect universal human rights. To that end, the Company practices and seeks to work with business associates who believe and promote these standards. The Company is committed to provide equal opportunities at all levels, safe and healthy workplaces and protecting human health and environment. The Company provides opportunities to all its employees to improve their skills and capabilities. The Company's commitment extends to its neighboring communities to improve their educational, cultural, economic and social well-being. Your Company is an equal opportunity employer and does not discriminate on the grounds of race, religion, nationality, ethnic origin, color, gender, age, citizenship, sexual orientation, marital status or any disability not affecting the functional requirements of the position held.

15. CORPORE SOCIAL RESPONSIBLITY

Our key Strategy for Corporate Social Responsibility is to mobilize core competencies and resources of business, public organizations and Government Institutions…...to facilitate their working in partnership on projects that benefit communities. We also feel strongly about giving back to our community. We believe everybody deserves to be treated with dignity and respect, regardless of their personal circumstances, and offered the skills, knowledge and assistance they need to help themselves lead healthy and productive lives. Though the Company doesn't fall under the ambit of Section 135 of Companies Act, 2013, but still Company has implemented following activities to fulfill corporate social responsibility in the financial year 2014-15:

-eradicating extreme hunger and poverty;

-promotion of Education;

-promoting gender equality and empowering women;

-reducing child mortality and improving maternal health;

-combating human immunodeficiency virus, acquired, immune deficiency syndrome, malaria and other diseases;

-ensuring environmental sustainability;

-employment enhancing vocational skills;

-contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

16. DELISTING OF EQUITY SHARES

The members have passed a special resolution in the Annual General Meeting of Company held on 10th July, 2004 permitting the Company to delist its shares from the regional stock exchanges of Delhi, Kolkata,Jaipur and Ahmedabad. As on date, out of the above-stated four stock exchanges, the equity shares of the Company have been delisted from the Delhi, Ahmedabad and Jaipur Stock Exchanges. Delisting application of the Company is still pending with the Calcutta Stock Exchange Association Ltd., Kolkata since December 2004. Inspite of several reminders, the Company did not get any response from the exchange in the matter of the delisting status.

17. DISCLOSURE OF SUBSIDIARY AND ASSOCIATE COMPANY

However, the Company exercises significant influence (32.26%) over its Associate Company i.e. "Mayur Global Private Limited". Mayur Global Private Limited is a Footwear Manufacturing company established to fulfill the export demand of leather Footwear.

18. RISK MANAGEMENT POLICY

Your Company has an elaborate Risk Management procedure, which is based on three pillars: Business Risk Assessment, Operational Controls Assessment and Policy Compliance processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the identified risks relate to competitive intensity and cost volatility.

To sustain and grow in global market one must be ready for some level of uncertainty. Greater the uncertainty, higher the risk. The risk management function is integral to the Company and its objectives include ensuring that critical risks are identified, continuously monitored and managed effectively in order to protect the Company's business. The Company operates in an environment which is affected by various factors some of which are controllable while some are outside the control of the company. The Company proactively takes reasonable steps to identify and monitor the risk and makes efforts to mitigate significant risks that may affect it. Some of the risks that are potentially significant in nature and need careful monitoring are listed here under:

- Macroeconomic Factors

- Political Factors

- Product portfolio

- Competition from product launches

- Talent acquisition & retention

- Continuance and growth of channel partners

- High dependence on suppliers

- Geographic concentration

- Changes in government policy and legislation

- Chinese Competition

- Raw Material Price Increase

- Foreign Exchange Fluctuation

19. INTERNAL FINANCIAL CONTROLS

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

20. MANAGEMENT DICUSSION AND ANALYSIS REPORT

A detailed discussion on the industrial structure, development, opportunities, threats, review of operational performance and risks, as required under the Listing Agreements with stock exchanges, forms part of this report and is annexed herewith.

21. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 and Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, your Directors confirm that:

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

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

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

d) the Directors have prepared the annual accounts on a 'going concern' basis;

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

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

22. PARTICULARS OF EMPLOYEES

There are no employees in the Company whose particulars are required to be disclosed in terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in ANNEXURE III to this Report .

23. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement. (Please refer to Note 13 and 17 to the standalone financial statement).

24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.mayurgroups.net. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on a quarterly basis for transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arm's Length. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Equity Listing Agreement.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 is disclosed in Form AOC 2 ANNEXURE IV is is annexed to this report.

Your Directors draw attention of the members to Note 35 to the financial statement which sets out related party disclosures.

25. VIGIL MECHANISM

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee.

26. CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report along with the requisite Certificate from Company Secretaries in Practice, as stipulated, is annexed to this Report.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required to be disclosed pursuant to Section 134(3)(m) of the companies act, 2013 read with Rule 8 of companies (Accounts) Rules,2014, the particulars of technology absorption and foreign exchange earnings and outgo is provided as under.

RESEARCH & DEVELOPMENT / TECHNOLOGY ABSORPTION

Company continued to give utmost importance to the R&D activities. The Company has its own in- house well-developed Research and Development division. The objective of the Company through continuous Research and Development activities is the introduction of cost effective, state-of-art- products with enhanced life and to increase the production capacity. The Company's Laboratory and R&D division is continuously working towards new developments and keeps pace with the latest developments in high tech areas. During the year company has spend Rs.9,51,597.00 (previous year Rs. 4,75,485.00) on R & D expenditure, which is debited in financial books.

FOREIGN EXCHANGE EARNING AND OUTGO

Activities relating to exports; initiatives taken to increase exports, development of new export markets for product and services; and export plans:

The Company is engaged in the manufacture and export of leather safety shoes and shoe uppers. The majority sale is through exports. Due to the economic slowdown, the export market of the regular products has been badly affected. This is being countered by two activities: -

- Re-align fresh business from existing customers with new products.

- Develop an Indian Market Network.

28. INTERNAL AUDITOR

As per Section 138 of Companies Act 2013, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors.

The directors are pleased to confirm the appointment of M/s. Varma Prashant & Associates, as Internal Auditors of the company.

29. GENERAL

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

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

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

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

4. There was no fraud which has been reported to the Audit Committee / Board but not to CG during the year under review.

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

30. ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Central & State Government, Local Authorities, Clients, Vendors, Advisors, Consultants and Associates at all levels for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation for their commitment, dedication and hard work put in by every member of the Company.

To them goes the credit for the Company's achievement and to you, our shareholders we are deeply grateful for the confidence and the faith that you have always reposed in us.

For and on behalf of the Board of Directors

PLACE : JAIPUR Sd/- Sd/-

DATE : 14.08.2015 R.K. Poddar Amita Poddar

Director Director

DIN:00143571 DIN:00143486


Mar 31, 2014

Dear Members,

Mayur Leather Products Ltd.

The Directors have pleasure in presenting the Twenty Ninth Annual Report of your Company along with Audited Annual Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

The financial performance of the Company for the year ended on 31st March, 2014 is as follows:

Particulars 31.03.2014 31.03.2013

Turnover (FOB) 2,31,021,672.64 2,17,512,777.00

Other Income 10,612,583.16 6,548,945.71

Less: Total Expenditure 2,16,818,221.89 2,03,157,287.93

Profit before interest, depreciation and tax 24,816,033.91 20,904,434.78

Interest 3,522,816.18 4,258,498.61

Depreciation 3,771,248.00 3,686,426.00

Profit before Exceptional & extra-ordinary 17,521,969.73 12,959,510.17

items & Tax

Less: Exceptional Item 1,732,759.85 1,116,605.00

Add/Less: Extra Ordinary Items - -

Profit before Tax 15,789,209.88 11,842,905.17

Less: Deferred tax (1,019,729.00) 2,356,110.00

Less: Income tax 6,271,373.00 2,732,532.58

Net Profit/ (Loss) after Tax for the year 10,537,565.88 6,754,262.59

Profit/ (Loss) brought forward 74308524.92 7,33,73,388.33

Profit available for appropriation 84846090.80 80127650.92

Appropriations: _ _

Interim Dividend on Equity Shares for the year 2417400.00 24,17,400.00

Proposed dividend on equity shares 2417400.00 24,17,400.00

Tax on proposed dividend 840348.00 7,84,326.00

Transfer to general reserve 2,00,000.00 2,00,000.00

Balance carried forward 78970942.80 74308524.92

Previous year figures have been re-grouped and rearranged wherever considered necessary.

OPERATIONS

Currently in India, the national economy and marketplace is undergoing rapid changes and transformation. The volatility in the macroeconomic environment during the FY 2013-14 continued to cast its shadow and most of the markets where Mayur Leather operates, were impacted.Today the companies are operating in such a marketplace where the survival of the fittest is the law. Even in this environment, the Company recorded an exemplary financial performance. The major contributing factors for such all-round performance across all the geographies and industry verticals was the Company''s customer-centric approach and its ability to innovate customer specific products, focus on pricing, disciplined execution of

omple x projects and the rigor in following strong internal processes. This coupled with favorable foreign exchange rate provided better profit margin.

Changing economic scenario and business conditions, evolving consumer preferences, rapid technological innovations and adoption and globalization are driving Mayur Leather to transform the manner in which they operate.

Major challenge is high inflation rate in India and shortage of Leather. This is posing a big problem as the acceptability selling price does not increase in the same ratio as compare to increase in cost of Raw Material.Especially Leather which has been increasing 15% to 25% per annum along with shortage of availability is a huge challenge.Your Company is now focused o n its core business objective i.e. growth, profitability and asset efficiency.

During the year 2012 - 13, revenue from operation increased by 3.29% as compared to year 2011-2012 and in current year we have achieved 6.21% increment as compared to previous year.

The table below shows the comparative growth in revenue of the Company since last three years:

Financial year Revenue from operations Otherincome Total revenue

- Rs. 2105.80 Lacs Rs. 60.72 Lacs Rs. 2166.52 Lacs

2012 - 13 Rs. 2175.13 Lacs Rs. 65.49 Lacs Rs.2240.62Lacs

2013 - 14 Rs. 2310.22 Lacs Rs. 106.13 Lacs Rs.2416.35Lacs

In order to increase our market share to offset the decline in export, the Company has taken various steps, major of them are follows:

a. In collaboration with M/s UVEX our German buyers:

European union is under recession. We are trying to stabilize out turnover and increase our customer base and product profile

b. We undertook project implementation to start Vulka Shoe production for the Company Heckel Securite, France.

This has helped to nullify the reduction in exports to Europe over the last few years._

c. Development is on for new customers in Oman and Qatar to nullify reduction due to recession in middle east.We are also making efforts to develop addition customers in the middle east to support these efforts.

d. We are undertaking various activities to develop local Indian market:

Our presence in the local market was negligible in the year 2006 - 07. We have started activities during the year 2007-08 & by 2008-09 our local market was approx. 29429 Pairs valued at approx. Rs. 1.49 Crores. In the year 2010-11 our local turnover was increased approx. 64% in comparison with the year 2009-10.

During the year 2011-12 & 2012-13 due to recession effect on local market our local turnover was stable in both the years, it was around 1.50 crore in each year. But during the current year we achieved a target sale of 63860 Prs in domestic Market valued at Rs 3.78 Crore Approx. which is a tremendous increment in domestic sales almost 152 % as compared to Pr evious Year. Efforts are on to increase local market hence to supplement decrease in export market.

However the thrust is to enter the Indian market in a big way as even in India people are moving towards safety consciousness and demand is slowly increasin g for quality safety footwear even though price expectation is a challenge.

We expect to supplement the decrease in demand in Europe due to recession with increase in domestic supplies.

With reference to the above steps taken by the Company, the Company is confident of recovering the lost ground due to the recession in Europe.

However, there is one uncertainty in export business and that is the status of EURO. At the moment, it is very volatile and has decreased as compared with US Dollar from 1.45 to 1.33. Exchange rate is difficult to predict, but it is a global phenomenon and both the exporters and the importers in Europe will have to find a solution to it. The rate of US dollar is in favors of export market it has been increased from 54.32 to 59.95 as compared to previous year.

We have also gone in for diversification. The idea is to expand business areas in same line of business and for the purpose of the same the Company intends to enter into business of Sandals/sleepers also.

RESERVES

For the period under review the Board proposes to transfer Rs 2.00 Lacs to General Reserve Account of the Company.

DIVIDEND

Your Company has always strived to maintain a balance by providing an appropriate return to the shareholders while simultaneously retaining a reasonable portion of the profit to maintain healthy financial leverage with a view to support and sustain the future growth. Company has a concerted dividend policy which ensures the availability of sufficient distributable income to its members. Your Company has paid 1 (One) interim dividend ofRs.0.50 per equity share of Rs 10/- each (i.e.5%) during the financial year ended on 31st March 2014. Board of Directors is pleased to recommend final dividend ofRs. 0.50 per equity share of Rs. 10/- each (i.e. 5%), for the year 2013-14 subject to approval of Shareholders in the Annual General Meeting.

The total outgo on account of dividend payment, including dividend tax, is Rs.56.75 Lacs.

FIXED DEPOSITS

The Company has not accepted or renewed any fixed deposits from public during the year under review.

CAPITAL STRUCTURE

During FY 13-14, there is no change in the capital structure of Company. The Authorised Share Capital of Company is Rs. 5.80 Crores and Paid up share Capital of Company isRs. 4.83Crores.

DIRECTORS

During the year under review, Mr. Keshav Deo Agarwal (DIN:00172149) has resigned from the directorship of the Company and ceased to be a Director of Company w.e.f. 16.07.2013. The board of directors wishes to place on record their sincere appreciation for contribution made by him, during his tenure as a Director of the Company.

Ms. Amita Poddar (DIN: 00143486), Director of the Company whose period of office is liable to retire by rotation pursuant to provisions of Company Act, 2013 and Article 39 of the Articles of Association of the Company retires by rotation at the ensuing AGM and being eligible offers herself for reappointment.

Further, Mr. Madhusudan Prasad Kejriwal(DIN: 06547411) and Mr. Madhukar Chaturvedi (DIN: 06547404) who were appointed as a Director liable to retire by rotation and whose term expires at this Annual General Meeting seek your support in confirming their appointment as Independent Directors of the Company not liable to retire by rotation and to hold office for a term up to 31st March, 2019.

A brief resume and other information required under clause 49 of the listing agreement is included in the Annual Report / Notice of Annual General Meeting. The Board recommends their re-appointment.

AUDITORS

M/s. Madhukar Garg & Co., Chartered Accountants, Jaipur having FRN 000866C, the Statutory Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. It is proposed to re-appoint them tohold office from the conclusion of this AGM until the conclusion of the third consecutive AGM.

The company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

The auditors have stated that the company has transacted with the parties covered u/s 301. The directors hereby express that the transaction entered into were basically current account transactions in nature. The rate of interest and other terms & conditions are not prejudicial to the interest of company.

The delay in payment of statutory dues with Income Tax Department, as stated in Auditor''s Report, is not serious in nature and was deposited with the concerned authority with interest, as applicable. Other than this, the Notes on Financial Statements referred to in the Auditors'' Report are self- explanatory and do not call for any further comments.

COMPLIANCE CERTIFICATE

As per the requirements of Section 383A of the Companies Act, 1956 and Companies (Compliance Certificate) Rules, 2001, the Company has obtained a Compliance Certificate for the Financial Year 13-14 from M/s V. M. & Associates, Company Secretaries, Jaipur, confirming that the Company has complied with the provisions of the Companies Act, 1956 and a copy of the Compliance Certificate is annexed to this report.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its employees are its principal assets and that it''s continued growth is dependent upon the ability to attract and retain quality people. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the company to achieve its business objectives. The morale of employees continued to remain high during the year contributing positively to the progress of the Company. However aspirations of employees in India remain to be high. This is a challenge as only growth can fulfill these aspirations and in today''s market scenarios one has to perform extraordinarily to achieve growth.

The Company has always provided a congenial atmosphere for work to all sections of the society. Your Company is committed to respect universal human rights. To that end, the Company practices and seeks to work with business associates who believe and promote these standards. The Company is committed to provide equal opportunities at all levels, safe and healthy workplaces and protecting human health and environment. The Company provides opportunities to all its employees to improve their skills and capabilities. The Company''s commitment extends to its neighbouring communities to improve their educational, cultural, economic and social well-being. Your Company is an equal opportunity employer and does not discriminate on the grounds of race, religion, nationality, ethnic origin, colour, gender, age, citizenship, sexual orientation, marital status or any disability not affecting the functional requirements of the position held.

DELISTING OF EQUITY SHARES

The members have passed a special resolution in the Annual General Meeting of Company held on 10th July, 2004 permitting the Company to delist its shares from the regional stock exchanges of Delhi, Kolkata, and Ahmedabad. As on date, out of the above-stated four stock exchanges, the equity shares of the Company have been delisted from the Delhi, Ahmedabad and Jaipur Stock Exchanges. Delisting application of the Company is still pending with the Calcutta Stock Exchange Association Ltd., Kolkata since December 2004. Inspite of several reminders, the Company did not get any response from the exchange in the matter of the delisting status.

DISCLOSURE OF SUBSIDIARY AND ASSOCIATE COMPANY

The shares of "Mayur Abodes Limited"which became the subsidiaryof your Company "Mayur Leather Products Limited" on1st October, 2010, have been sold through a share sell agreement dated 10th April, 2013. Therefore, as on date "Mayur Leather Products Limited" does not have any Subsidiary Company.

However,the Company exercises significant influence (32.26%) over its Associate Company i.e. "Mayur Global Private Limited".Mayur Global PrivateLimitedis a Footwear Manufacturing company established to fulfill the export demand of leather Footwear.

MANAGEMENT DICUSSION AND ANALYSIS REPORT

A detailed discussion on the industrial structure, development, opportunities, threats, review of operational performance and risks, as required under the Listing Agreements with stock exchanges, forms part of this report and is annexed herewith.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 and Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, your Directors confirm that:

1. that in the preparation of the Annual Accounts for the Financial year 2013-2014, the applicable Accounting Standards have been followed and there are no material departures;

2. that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs of the Company for the financial year and of the statement of profit and loss of the Company for that period.;

3. that the directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate Accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the Annual Accounts are prepared on a ''going concern'' basis.

PARTICULARS OF EMPLOYEES

There are no employees in the Company whose particulars are required to be disclosed under the provisions of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, from time to time.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report along with the requisite Certificate from Company Secretaries in Practice, as stipulated, is annexed to this Report.

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

Information in accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956, and rules made therein, the particulars of technology absorption and foreign exchange earnings and outgo is provided as under.

(A) CONSERVATION OF ENERGY

The Company has taken various steps to reduce consumption of power, fuel, oil and other energy resources. The Company regularly takes advice from experts on energy conservation measures to be adopted. Regular studies are undertaken for assessing the possibilities of use of various methods by which the Company optimizes the use of energy without effecting the productivity, quality etc. Training programs are conducted to increase awareness on energy saving. As already mentioned, the efforts of the Company have already started showing results as the power, fuel and water expenses have been reduced for the year under review. This reduction has been achieved despite of escalating power and fuel prices.

(B) RESEARCH & DEVELOPMENT / TECHNOLOGY ABSORPTION

Company continued to give utmost importance to the R&D activities. The Company has its own in-house well-developed Research and Development division. The objective of the Company through continuous Research and Development activities is the introduction of cost effective, state-of-art-products with enhanced life and to increase the production capacity. The Company''s Laboratory and R&D division is continuously working towards new developments and keeps pace with the latest developments in high tech areas.

(C) FOREIGN EXCHANGE EARNING AND OUTGO

Activities relating to exports; initiatives taken to increase exports, development of new export markets for product and services; and export plans:

The Company is engaged in the manufacture and export of leather safety shoes and shoe uppers. The majority sale is through exports. Due to the economic slowdown, the export market of the regular products has been badly affected. This is being countered by two activities: -

A. Re-align fresh business from existing customers with new products.

B. Develop an Indian Market Network.

Hopefully the results should start showing within the next six months. It is our endeavor to fight the worldwide recession.

INTERNALAUDITOR

As per Section 138 of Companies Act 2013, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors.

The directors are pleased to confirm the appointment ofM/s. Verma Prashant & Associates, as Internal Auditors of the company.

SECRETARIAL AUDITOR

As per section 204 of Companies Act 2013, every listed company is required to annex with its Boards report, a Secretarial Audit Report which shall be issued from the financial year 2014-15 onwards which is to be given by a Company Secretary in practice.

The directors are pleased to confirm the appointment of M/s Jaks & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the company.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Central & State Government, Local Authorities, Clients, Vendors, Advisors, Consultants and Associates at all levels for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation for their commitment, dedication and hard work put in by every member of the Company.

To them goes the credit for the Company''s achievement and to you, our shareholders we are deeply grateful for the confidence and the faith that you have always reposed in us.

For and on behalf of the Board of Directors PLACE : JAIPUR Sd/- Sd/- DATE : 30.05.2014 R.K. Poddar Amita Poddar Director Director DIN:00143571 DIN:00143486


Mar 31, 2013

The directors have great pleasure in presenting the annual report together with audited statement of accounts for the year ended September 30, 2013.

(consolidated)

financial highlights 2012-13 2011-12 in '' in ''

net revenue from operations 658,53,48,871 452,05,81,457

less expenditure 510,97,28,244 351,72,78,952

operating profit (pbidt) 147,56,20,628 100,33,02,505

interest 28,54,39,350 20,51,99,592

profit before depreciation & tax (pbt) 119,01,81,278 79,81,02,913

depreciation 50,34,74,226 42,34,87,038

profit before tax 68,67,07,052 37,46,15,875

provision for taxation 15,89,29,966 6,74,85,866

profit after tax 52,77,77,086 30,71,30,009

provision for deferred tax 2,09,84,814 1,30,14,433

profit after deferred tax 50,67,92,272 29,41,15,576

balance brought forward 61,07,67,157 51,66,76,293

profit available for appropriation 111,75,59,429 81,07,91,869 appropriation

dividend paid 1,22,90,705

proposed dividend 13,20,61,645 4,30,42,192

dividend distribution tax 2,14,23,700 69,82,520

general reserve 15,00,00,000 15,00,00,000

balance carried forward in p&l a/c 80,17,83,378 61,07,67,157

(standalone)

financial highlights 2012-13 2011-12 in '' in ''

net revenue from operations 448,95,05,679 308,39,19,980

less expenditurev 331,32,81,507 232,52,57,512

operating profit (pbidtb 117,62,24,172 75,86,62,468

interest 27,14,32,642 18,38,28,194

profit before depreciation & tax (pbt) 90,47,91,530 57,48,34,274

depreciation 34,95,87,981 29,79,43,411

profit before tax 55,52,03,549 27,68,90,863

provision for taxation 13,98,74,629 5,53,15,987

profit after tax 141,53,28,920 22,15,74,876

provision for deferred 1,84,69,264 1,12,54,813

profit after deferred tax 39,68,59,656 21,03,20,063

balance brought forward 23,17,06,088 22,14,10,737

profit available for appropriation 62,85,65,744 43,17,30,800

dividend paid 13,20,61,645 4,30,42,192

proposed dividend 2,14,23,700 69,82,520

general reserve 15,00,00,000 15,00,00,000

balance carried forward in p&l a/c 32,50,80,399 23,17,06,088

Results of operation : consolidated

income for the year ended september 30 2013 was ''. 658.53 crore as compared to ''. 452.06 crore for the previous year. net profit after tax was ''. 50.68 crore vis-a-vis ''. 29.41crore for fy 2011-12. earnings per share was ''. 19.19 compared to ''. 12.30 for the previous year.

standalone

income for the year ended september 30 2013 was ''. 448.95 crore as compared to ''. 308.39 crore for the previous year. net profit after tax was ''. 39.68 crore vis-a-vis ''. 21.03 crore for fy 2011-12. earnings per share was ''. 15.03 compared to ''. 8.80 for the previous year.

share capital

the paid up share capital of the company as on september 30 2013 stood at ''. 26.41 cr and the reserves and surplus ''. 235 cr (206.18 cr in the previous year) and on consolidated level reserves and surplus ''. 312.00 cr as against ''. 268.29 cr in the previous year. the company''s shares are listed on the national stock exchange (nse), bombay stock exchange (bse), and madras stock exchange (mse). the company has paid the annual listing fees to all the stock exchanges and there are no arrears.

allotment of equity shares against exercise of option on convertible warrants in terms of the approval given by the shareholders of the company at the annual general meeting held on 29.03.2012, and upon receipt of requisite statutory approvals, the board of directors of the company allotted a total of 25 lakh fully paid up equity shares of ''.10 each in 2 equal instalments on 15.02.2013 and 07.06.2013, to g muralikrishna and v ramachandran, two of the promoters of the company, on preferential basis. the company does not have any convertible warrant outstanding as on date.

dividend

your directors are pleased to recommend an increased dividend of ''. 5.00 per share on an enhanced paid up capital of ''. 26,41,23,290. total dividend pay-out including dividend distribution tax is ''. 15.35 cr.

business and prospects

while the business focus continues to be on banking and financial services and insurance, healthcare and technology verticals, the company has taken the initiative to launch services in new horizontals such as big data and analytics, cloud services and mobile technology solutions.

according to IDC these new generation offerings are estimated to drive 90% of the growth in the IT space between 2013 and 2020. it is expected to have a potential to generate revenues in excess of a trillion dollars during this decade.

our company has set up a center of excellence for rolling out solutions on the mobile platform. we have launched our ''predictive analytics practice'' in May this year when the company had the privilege of ringing the nasdaq closing bell commemorating 15 years of listing of our US subsidiary on the nasdaq.

these bold initiatives not only present a humungous opportunity but also establish your company in the forefront of cutting edge technologies.

the company has long-standing relationships with large multinational corporations. focus on a few large clients has helped the company to strengthen the relationship and gain increased traction from existing clients.

the company works with eight of the top 20 global banks in the bfsi space. these clients include universal banks, investment banks, capital market institutions, insurance companies etc.

in the healthcare vertical the company caters to healthcare providers, healthcare payers and life sciences companies.

all these client organizations offer huge potential for the new age service offerings launched by the company.

knowledge services is yet another business segment that is non linear. the company made significant progress offering technology training to various corporates in India and overseas. social sector has been added to the basket this year. the company is associated with nasscom as an accredited training partner for skill development in the IT and ITES sectors. this initiative is an integral part of a national mission for up-gradation of skills. the national mission has an objective to cover 500 million persons under this program by 2022.

subsidiary companies and consolidated financial statements with the gradual easing of the global slowdown and with the US economy looking up, all the subsidiaries have performed satisfactorily during the year.

as per section 212 of the companies act 1956, the company is required to attach directors report, balance sheet and profit and loss account of the subsidiaries. the ministry of corporate affairs, government of India, vide its general circular no: 2/2011 dated 08.02.2011, has provided exemption to companies from complying with section 212, provided the board approves the proposal and such companies publish the audited consolidated financial statements in the annual report. accordingly, the annual report for 2012-13 does not contain the financial statements of the subsidiaries. the audited annual accounts and related information of the subsidiaries, where applicable, will be made available upon request. these documents will also be available for inspection during business hours at the registered office of the company at chennai.

particulars of employees as required by the provisions of section 217 (2a) of the companies act, 1956, read with companies (particulars of employees) rules, 1975, as amended, the names and other particulars of the employees are set out in annexure to the directors'' report. however, as per the provisions of the section 219(1) (b) (iv) of the companies act, 1956, the report of the directors is being sent to all the shareholders of the company excluding the aforesaid information. any shareholder of the company interested in obtaining such information may write to the secretary at the corporate office of the company.

vmoksha - arbitration status

as reported already, your company signed a definitive share purchase agreement (spa) to acquire 100% equity in three vmoksha entities based at bangalore, singapore and USA in the month of may 2005. however, the sellers tried to renege the spa and hence your company initiated arbitration proceedings.

arbitration proceedings were presided by hon''ble justice mr.k.venkataswami, judge, supreme court (retd) as the sole arbitrator. arbitration proceedings were conducted over a period of two years spread over 34 sittings. the first sitting

was held on 28.10.2006 and thirty fourth sitting was held on 28.06.2008 and 5 volumes of 1370 pages of documents were submitted before the arbitrator. the hon''ble arbitrator posted the matter for pronouncement of award on 20.09.2008. at the request of the advocates of the respondents the award date was rescheduled to 29.09.2008. unfortunately, hon''ble justice mr.k.venkataswami passed away on 26.09.2008 just 3 days before the revised pronouncement date.

as the company wanted to settle the issue in a legally valid manner, the company decided to continue the arbitration proceedings. hence, the company has filed a petition before the hon''ble high court of madras seeking its directions for appointment of a new arbitrator for speedy disposal of the arbitration proceedings [ref o.p.no.336 of 2009]. the petition is pending before the honble high court for disposal.

based on its present knowledge of facts and as per legal opinion obtained, the current legal proceedings, in the opinion of your management, will not have a material adverse effect on the results / operations of helios and matheson.

directors'' responsibility statement

pursuant to the requirement under section 217 (2aa) of the companies act, 1956, with respect to directors responsibility statement, it is hereby confirmed that:

in the preparation of the annual accounts for the financial year ended september 30 2013 the applicable accounting standards have been followed along with proper explanation relating to material departures.

the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review.

the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the companies act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

the directors have prepared the accounts for the financial year ended september 30 2013 on a "going concern" basis.

directors

s.k patil retires by rotation at this annual general meeting and is eligible for election. suresh kumar r was appointed as additional director of the company at the board meeting held on 29.10.2013 and holds office upto the date of the ensuing annual general meeting. notice has been received from a

member of the company proposing the candidature of suresh kumar r as a director of the company at the ensuing annual general meeting. necessary resolutions for approval of shareholders are proposed in the notice of the ensuing annual general meeting for the reappointment of s.k patil and appointment of suresh kumar r as directors of the company.

conservation of energy, research & development, technology absorption, foreign exchange earnings and outgo

the provisions of subsection (1) (e) of section 217 of the companies act, 1956, read with companies (disclosure of particulars in the report of board of directors) rules, 1988, are set out in the annexure to this report.

auditors

m/s.venkatesh & co., chartered accountants, chennai, retire at the ensuing annual general meeting and are eligible for reappointment. a certificate under section 224 (1-b) of the companies act, 1956, has been received from them.

acknowledgement

your directors thank the clients, vendors, investors, financial institutions and bankers for their continued support for the company''s growth. your directors place on record their appreciation of the contribution made by the employees at all levels, who, through their competence, hard work, solidarity, cooperation and support, have enabled the company to achieve rapid growth.

your directors thank the government of India, particularly the department of electronics, software technology parks- chennai and bangalore, department of commerce (mepz special economic zone) chennai, ministry of information technology, ministry of commerce, the reserve bank of india, the department of telecommunications, the state governments, and other government agencies for their support during the year and look forward to their continued support in the future.

for and on behalf of the board

place: chennai muralikrishna g.

date : 29.11.2013 chairman & managing director

 
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