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Directors Report of Pasupati Spinning & Weaving Mills Ltd.

Mar 31, 2015

TO THE MEMBERS

The Directors have pleasure in presenting their Report together with the Audited Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS

Particulars 2014-15 2013-14 Rs./Lacs Rs./Lacs

Sales and other Income 20658.50 21093.31

Profit before Finance Costs and Depreciation 1080.88 1122.92

Financial Charges 660.66 729.74

Depreciation 402.51 335.50

Profit before Taxes 17.71 57.68

Payment/Provision for Taxation (1.09) 4.75

Profit after Taxation but before extra-ordinary items 18.80 52.93

Extra-ordinary items - (99.41)

Net Profit after extra-ordinary items 18.80 (46.48)

COMPANY'S PERFORMANCE

During the year under review, although the turnover of the company marginally declined by 2.06%, the profit before taxes declined to Rs.17.71 lacs from Rs. 57.68 lacs. The marginal decline in turnover is mainly attributable to sudden decline in exports. During the year under review, the company made exports to the tune of Rs. 3666.24 Lacs as against exports of Rs. 4502.40 Lacs made during previous financial year showing a decline of 18.57%. The profit before taxes declined because the company's spinning unit, which was restarted from August 2013 incurred losses during the year. The said unit has started generating cash profit only from the last quarter of the year under review.

THE MANAGEMENT DISCUSSION & ANALYSIS

Spinning Unit at Dharuhera, Haryana

The production activities in this unit were re-started from 31.8.2013. However, due to initial teething troubles, the production activities could be streamlined in March 2014 but the unit started generating cash profit only from the last quarter of FY 2014-15. In order to meet the growing competition in cotton yarn market, the company had decided to go for value addition by producing doubled yarn, for which the company decided to procure eight new TFOs and two Cheese Winding machines and also made advance payment to the supplier. State Bank of Travancore (SBOT) had also sanctioned a Term Loan of Rs.180 Lacs for purchase of these machines. However due to delay in obtaining NOC from some of the consortium member banks, the said loan could not be disbursed. As a result the machinery supplier diverted the machine to some other supplier. Since the next delivery period of the machines was very long, the company decided to procure/import state-of-the-art Circular Knitting Machine to manufacture fine quality fabric out of cotton yarn (i.e. forward integration), which will result in better value addition. SBOT has also approved the change of machine and advance to the machinery supplier has been made through partial disbursement of loan. The machines are expected to be ready for delivery by October 2015. With the addition of the machine, the profitability of the spinning unit is expected to improve.

Knitting & Garment unit at Dharuhera, Haryana

The production activities of the Fabric/Garment Division at Dharuhera are going on smoothly. The company is achieving average monthly turnover of Rs.2 Crore from this unit. The company is supplying garments for well known brands i.e. Future Group, Reliance Trend, Pantloon Retail, Spencer and Bharti Wallmart etc. Besides, the company is also exporting garments.

Sewing Thread Unit At Kala Amb, Himachal Pradesh

During the year under review, the capacity utilisation remained a cause of concern due to labour shortage problem. Although the company was able to largely overcome the labour shortage problem from January 2015 but after Holi festival, the situation has again deteriorated. The situation is gradually improving and it is expected that the situation will be back to normal by next month. The company has been exporting significant percentage of its production and more than 90% of the same was being exported to Turkey. However, due to some internal problem in Turkey, our exports have virtually stopped during last quarter of the year under review. Therefore, the company has increased domestic sales during the same period. However, the realisation period in domestic sales ranges from 90 days to 120 days, which has created stress on working capital. The situation is expected to improve gradually once the realisation cycle is complete. It is not out of place to mention here that margins in domestic market are better than export market.

DIVIDEND

In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) 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 or loss of the Company for the year under review.

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

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

STATUTORY AUDITORS

During the year under review, the auditors need no rotation as they can continue as auditors for a period of two more years i.e. up the year 2017. M/s. B.K. Shroff & Co. Chartered Accountants, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. B.K. Shroff & Co. as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the thirty seventh AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

INTERNAL CONTROL SYSTEMS

Your Company has evolved a system of internal controls to ensure that the assets are safeguarded and transactions are authorised, recorded and correctly reported. The internal control system is supplemented by management reviews and independent periodical reviews by the outside chartered accountancy firms which evaluate the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness. The scope of internal audit covers a wide variety of operational methods and, as a minimum, ensures compliance with specified standards with regard to availability and suitability of policies and procedures, extent of adherence, reliability of management information system and authorization procedures including steps for safe- guarding of assets. The reports of internal audit are placed before Audit Committee of the Directors and Board. Audit Committee and board reviews such audit findings and the adequacy of internal control systems. The Statutory Auditors and the Internal Auditors of the Company also interact with the Audit Committee and Board to share their findings and the status of corrective actions under implementation.

M/s. M.C. Jain & Co. Chartered Accountants, New Delhi were appointed as Internal Auditors of the Company for the Financial Year 2014-15 and their reports for the year were submitted to the Audit Committee and to the Board.

COST AUDIT

The Central Govt has approved the appointment of M/s Avtar Singh & Co. as cost auditors for conducting Cost Audit for the Financial Year 2014-15 The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2015 will be submitted to the Central Government in due course.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Suchita Gupta & Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure-A

AUDITORS' OBSERVATIONS

Auditors' observations relating to Note no. 12 as contained in the Main Report under the para 'Basis of Qualified Opinion' are explained hereunder: -

Although, the company has made representation to the competent authority for payment of compensation at market rate in respect of part of company's factory land acquired by Government of Haryana, the company feels that final decision in this regard may take a very long time and moreover there is uncertainty about the success of company's representation. Hence, it has been decided that its affect would be given in company's books as and when actual compensation is received from Government of Haryana.

DEPOSITS

During the year, the Company did not accept any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year under review , company has not given any loans, Guarantee or made any investments covered under the provisions of Section 186 of the Companies Act, 2013.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. On the recommendation of the Risk Management Committee, the Board has adopted Risk Management Policy, which outlines the program implemented by the Company to ensure appropriate risk management within its system and culture. The Risk Management Policy is also posted on the website of the Company. The Company's risk management pro- gram comprises of a series of processes, structures and guidelines which assist the Company to identify, assess, monitor and manage its business risks, including any material changes to its risk profile. To achieve this, the Company has clearly defined the responsibility and authority of the Company's Board of Directors and of the Risk Management Committee to oversee and manage the risk management program while conferring responsibility and authority on the Company's senior management to develop and maintain the risk management program in light of the day to day needs of the Company. Regular communication and review of risk management practices provide the Company with important checks and balances to ensure the efficacy of its risk management program.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS

(i) Retirement by rotation

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Vrinda Jain retires by rotation and is eligible for reappointment. The brief resume(s) of the all Directors proposed to be appointed or reap- pointed at the ensuing AGM, as required in terms of Clause 49 of the Listing Agreement with the stock exchanges is provided in the annexure(s) to the notice of Annual General Meeting.

(ii) Resignation of Director:- During the year , Mr. S.K.Chaajer , whole Time Director of the company resigned from the Board on 30-6-2014.

(iii) Declarations by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

(iv) Board Evaluation

In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(v) Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. More details of the same are given in the Corporate Governance Report.

(vi) Board Meetings

During the year, four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013

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

The information relating to conservation of energy, technology absorption and foreign exchange earnings & outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexed herewith as Annexure-B.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure-C

PARTICULARS OF EMPLOYEES

The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs.60 lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs.60 lacs during the financial year 2014-15.

The information in accordance with the provisions of Section 197 of the Companies Act,2013 read with rule 5 of the Companies ( Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as Annexure-D.

CORPORATE GOVERNANCE

The Company has been in compliance with all the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchange and a certificate from the Auditors to this effect is made part of the Annual Report. Committed to the practice of good Corporate Governance, the Board lays strong emphasis on transparency, accountability and integrity, with its 'Governance Committee' specifically assigned the task of analysing the clause with respect to good governance practice. In terms of such sub clause (v) of Clause 49 of Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of the said clause, is also enclosed as a part of said Report.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

ACKNOWLEDGEMENT

Your Directors convey their sincere thanks to the various agencies of the Central Government, State Governments, Banks and other concerned agencies for all the help and cooperation extended to the Company. The Directors also deeply acknowledge the trust and confidence the shareholders and investors have placed in the Company. Your Directors also record their appreciation for the dedicated services rendered by the workers, staff and officers of the Company

For And on Behalf of Board of Directors

Sd/-

Ramesh Kumar Jain

Chairman & Managing Director

Place : New Delhi

Dated : 14-8-2015


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their Report together with the Audited Accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS

Particulars For the Year For the Year 2013-14 2012-13 (Rs. in Lacs) (Rs. In Lacs)

Sales and other Income 21093.31 15998.31

Profit before Interest and Depreciation 1122.92 1688.42 Financial Charges 729.74 710.69 Depreciation 335.50 312.77

Profit before Taxes 57.68 664.96 Payment / Provision for Taxation 4.75 126.67

Profit after Taxation but before extra-ordinary items 52.93 538.29 Extra-ordinary items (99.41) 1457.87

Net Profit after extra-ordinary items (46.86) 1996.16

2. COMPANY''S PERFORMANCE

During the year under review, although, the turnover of the company registered a growth of 31.85%, the profit before taxes also declined to Rs. 57.68 lacs from Rs. 664.96 lacs. During the year under review, the performance of the company deteriorated mainly due to the following reasons:

(a) The company had to pay interest to J M Financial Asset Reconstruction Co. Pvt. Ltd. (JMFARC) on Optionally Convertible Cumulative Debentures (OCCD), which were earlier to be converted into Equity. The terms of conversion were linked with the listing of company''s equity at Bombay Stock Exchange (BSE). Since there was delay in listing of company''s shares at BSE, the due date of conversion of OCCD into equity expired and the company had to pay interest since inception.

(b) During the year under review, the Company suffered loss to the tune of Rs.115.68 Lacs due to exchange rate fluctuations due to sudden depreciation of Indian Rupee against USD. Besides, due to depreciation of Indian rupee against USD, there was significant impact on prices of our major raw materials (i.e. Polyester, being used for manufacturing sewing thread at Kala Amb Unit), which is mainly linked with international market. The company is purchasing the entire requirement of polyester from Reliance Industries Ltd. and the said company increased prices of polyester by as much as Rs.19 per kg from April 2013 to August 2013, but the increased cost of production could be passed on to the customers only by the end of December 2013, which also adversely affected company''s profitability.

(c) During the year under review, the company continued to face problem of labour shortage. As a result the company''s sewing thread unit could not operate at full capacity resulting production losses.

(d) During the year, the company has re-started its Spinning unit at Dharuhera, which was lying closed since September 2008. In order to re-start this unit, the company had to incur huge expenditure on overhauling / repairing of machines / buildings as the plant was lying close since 2008. Even the company imported and commissioned four new machines (autoconers) to upgrade the production facilities to enable the company to produce better quality yarn. As per original schedule, the production activities were supposed to commence from last week of June 2013, but due to delay in getting the power connection restored, the company could commence the production activities from 31 August, 2013. Thereafter due to some teething troubles, the production activities could not be stabilized till March 2014. Hence instead of contributing anything to the bottom line, the company suffered significant loss in this unit.

3. DIVIDEND

In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.

4. SPECIAL RESOLUTIONS PASSED THROUGH POSTAL BALLOT

No special resolution was passed through postal ballot during the Financial Year 2013-14. None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing of a special resolution through postal ballot.

5. CORPORATE GOVERENANCE

Your Company is committed to good Corporate Governance Practices and following to the guidelines prescribed by the SEBI and Stock Exchange from time to time. The company has implemented all of its major stipulations as applicable to company. The statutory Auditors'' Certificate dated 27th May, 2014 in accordance with Clause 49 of the Listing Agreement and report on Corporate Governance is annexed to and forming part of the Directors'' Report.

6. EMPLOYEES STOCK OPTION PLAN

Your company has not provided any employee stock options.

7. DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, and based on the representations received from the operating management, the directors hereby confirm that :

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the period;

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) the directors had prepared the annual accounts on a going concern basis.

8. AUDITORS

During the year under review, the auditors need not be routed as they can continue as auditors for a period of three years i.e. up to the year 2017. M/s. B.K. Shroff & Co. Chartered Accountants, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. B.K. Shroff & Co. as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the thirty sixth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

9. INTERNAL AUDITORS

M/s. M. C. Jain & Co. Chartered Accountants, New Delhi were appointed as Internal Auditors of the Company for the Financial Year 2013-14 and their reports for the year were submitted to the Audit Committee.

10. COST AUDIT

The Central Govt. has approved the appointment of M/s. Avtar Singh & Co. as cost auditors for conducting Cost Audit for the Financial Year 2013-14 The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2014 will be submitted to the Central Government in due course.

11. PARTICULARS OF EMPLOYEES

None of the employees was drawing in excess of the limits as mentioned by Companies Act, Companies Act, 1956 and rules made thereunder which needs to be disclosed in the Directors report.

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

Information in accordance with Clause (e) of Sub-Section (1) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the financial year ended 31st March 2014 is given in the Annexure to this report.

13. INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

14. CORPORATE GOVERNANCE

The Company has been in compliance with all the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchange and a certificate from the Auditors to this effect is made part of the Annual Report. Committed to the practice of good Corporate Governance, the Board lays strong emphasis on transparency, accountability and integrity, with its ''Governance Committee'' specifically assigned the task of analysing the clause with respect to good governance practice. In terms of such sub clause (v) of Clause 49 of Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of the said clause, is also enclosed as a part of said Report.

15. DIRECTORS

Mr. Vidit Jain is the director who retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. The brief resume(s) of the all Directors proposed to be appointed or reappointed at the ensuing AGM, as required in terms of Clause 49 of the Listing Agreement with the stock exchanges is provided in the annexure(s) to the notice of Annual General Meeting.

16. DEPOSITS

During the year, the Company did not accept any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

17. AUDITORS'' OBSERVATIONS

Auditors'' observations relating to Note No. 12 as contained in the Main Report under the para ''Basis of Qualified Opinion'' are explained hereunder:

Although, the company has made representation to the competent authority for payment of compensation at market rate in respect of part of company''s factory land acquired by Government of Haryana, the company feels that final decision in this regard may take a very long time and moreover there is uncertainty about the success of company''s representation. Hence, it has been decided that its affect would be given in company''s books as and when actual compensation is received from Government of Haryana.

18. ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to Customers, Suppliers, Bankers, other Stakeholders and specially the employees for their co-operation. The Directors also appreciate the confidence reposed in the Management of the Company by its shareholders.

For and on behalf of Board of Directors For PASUPATI SPINNING & WEAVING MILLS LIMITED

Sd/- Place : New Delhi RAMESH KUMAR JAIN Dated : May 27, 2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting their Report together with the Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

Particulars For the Year For the Year 2012-13 2011-12 (Rs. in Lacs) (Rs. In Lacs)

Sales and other Income 15998.31 11431.47

Profit before Interest and Depreciation 1688.42 1272.98

Financial Charges 710.69 840.28

Depreciation 312.77 311.99

Profit before Taxes 664.96 120.71

Payment / Provision for Taxation 126.67* 0.10

Profit after Taxation but before extra-ordinary items 538.29 120.61

Extra-ordinary items 1457.87 0.11

Net Profit after extra-ordinary items 1996.16 120.72

* Includes provision for Deferred Tax Liability of Rs.126.64 Lacs.

OPERATIONS

During the year under review, the turnover of the company registered a growth of 39.95%. The profit before taxes also jumped to Rs. 664.96 lacs from Rs. 120.71 lacs. The improvement of results has been mainly due to the cotton yarn business, which the company is outsourcing on job work basis from outside. However, the operations of sewing thread unit remained below expected level mainly due to labour shortage during the year. Although the company is trying its level best to improve the same, the position still remains critical. In view of improved market of cotton yarn, the company proposes to restart production activities of its Spinning Unit at Dharuhera, where the production activities were suspended due to bad market scenario and frequent power problems. In order to upgrade its production facilities for producing quality yarn, the company has placed order for import of four new machines with financial assistance of Rs. 452 Lacs sanctioned by Bank of Baroda. The first shipment of two machines has already arrived in India. Barring unforeseen circumstances, production activities in spinning unit are expected to commence from Mid-June 2013. With the resumption of spinning unit, the turnover and profitability of the company is expected to improve further. The operations of company''s knitting and garment unit at Dharuhera have remained smooth during the year.

DIVIDEND

In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.

DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956 :

Your Directors hereby confirm that :

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the period;

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) the directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s. B. K. Shroff & Co., Chartered Accountants, auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting. Based on the recommendation of the Audit Committee, the Board of Directors proposes to the reappointment of M/s. B. K. Shroff & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

M/s. B. K. Shroff & Co., Chartered Accountants, have expressed their willingness to act as Statutory Auditors of the Company, if reappointed, and have further confirmed that the said reappointment would be in conformity with the provisions of Section 224 (IB) of the Companies Act, 1956.

INTERNAL AUDITORS

M/s. M. C. Jain & Co., Chartered Accountants, New Delhi were appointed as Internal Auditors of the Company for the Financial Year 2012-2013 and their reports for the year were submitted to the Audit Committee.

COST AUDIT

The Central Government has approved the appointment of M/s. Avtar Singh & Company as Cost Auditors for conducting Cost Audit for the Financial Year 2012-2013.

The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2013 will be submitted to the Central Government in due course.

PARTICULARS OF EMPLOYEES

There is no employee in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

STATEMENT PURSUANT TO LISTING AGREEMENT(S)

The Company''s securities are listed at Mumbai Stock Exchange & Delhi Stock Exchange and the Company has paid Annual Listing Fee to Bombay Stock Exchange for the year under review & for the current year.

CORPORATE GOVERNANCE

The Company has been in compliance with all the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchange and a certificate from the Auditors to this effect is made part of the Annual Report. Committed to the practice of good Corporate Governance, the Board lays strong emphasis on transparency, accountability and integrity, with its ''Governance Committee'' specifically assigned the task of analysing the clause with respect to good governance practice. In terms of such sub clause (v) of Clause 49 of Listing Agreement, Certificate of CEO / CFO, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of the said clause, is also enclosed as a part of said Report.

DIRECTORS

Shri Vidit Jain & Shri S. K. Chhajer are the directors who retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. The brief resume of the said Directors, as required in terms of Clause 49 of the Listing Agreement with the stock exchanges, is provided in the annexure to the notice of Annual General Meeting. The details of the different Committees of the Board of Directors are provided in the report on Corporate Governance annexed to the annual report.

DEPOSITS

During the year, the Company did not accept any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS'' OBSERVATIONS

The Auditors'' observations regarding Note Nos. 4 (v) (c), 12, 22, (37(b) and 37(c) have been suitably explained in accompanying notes to the Financial Statements. The same are however again explained hereunder :

Note 4 (v) (c)

Debt of Rs. 600 lacs was to be converted into Optionally Cumulative Convertible Debentures (OCCD). The OCCD was to be converted into fully paid up equity shares of Rs. 10 each at a price of Rs. 40 per share in 3 stages over a time frame of 18-30 months from the effective date i.e. 19.03.2010 subject to other terms and conditions which includes that in case the conversion does not take place in the respective stages, then the OCCD will be converted at the end of next stage except in case of stage 3, post which it will have to be compulsorily redeemed by the company alongwith accumulated interest which accrue monthly at 23% p.a. Due to certain unavoidable circumstances, OCCDs could not be issued within 30 months from the effective date and in view thereof, the company has approached JMFARC for payment of the OCCD amount with interest. The negotiations are still in progress and hence the amount to be paid is not yet finalized. In the meantime the company has paid / provided interest of Rs. 41929315 (Rs. 28129315 for the period from 19.03.2010 to 31.03.2012 which has been included under extra ordinary items and Rs.13800000 for the period from 01.04.2012 to 31.03.2013 which has been included in interest expense for the year) @ 23% p.a. Difference if any, will be accounted after finalisation of negotiations.

Note 12

Although, the company has made representation to the competent authority for payment of compensation at market rate in respect of part of company''s factory land acquired by Government of Haryana, the company feels that final decision in this regard may take a very long time and moreover there is uncertainty about the success of company''s representation. Hence, it has been decided that its affect would be given in company''s books as and when actual compensation is received from Government of Haryana.

Note 22

The company had provided the excise duty demands in earlier years in its books of accounts for which matter is sub-judice in various courts. The company has been advised that no liability is likely to arise against the demands; hence the provision is not required. Therefore, the management decided to write back such provision. The same has however been shown under the head ''Contingent Liabilities''.

Note (37(b) and 37(c)

The company has already applied to Central Government for necessary permission for payment of remuneration to Directors.

ADDITIONAL INFORMATION

Energy conservation measures, progress made in technology absorption and foreign exchange earning and outgo, as required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, 1988 is annexed and form part of this Report.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The Directors also take this opportunity to thank all investors, clients, vendors, bankers, regulatory and Government authorities and stock exchanges for their continued support.

For and on behalf of Board of Directors

For PASUPATI SPINNING & WEAVING MILLS LIMITED

Sd/-

Place : New Delhi RAMESH KUMAR JAIN

Dated : May 27, 2013 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

TO THE MEMBERS

The Directors have pleasure in presenting their Report together with the Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

For the Year For the Year 2011-12 2010-11 (Rs. in Lacs) (Rs. In Lacs)

Sales and other Income 11431.47 11075.70

Profit before Interest and Depreciation 1272.98 1484.49

Financial Charges 840.28 870.23

Depreciation 311.99 306.67

Profit before Taxes 120.71 307.59

Payment/ Provision for Taxation 0.10 -

Profit after taxation but before extra-ordinary items 120.61 307.59

Extra-ordinary Items 0.11 0.04

Net profit after extra ordinary items 120.72 307.63

OPERATIONS

During the year under review, the net profit of the company after depreciation and before tax has decreased to Rs. 120.71 Lacs as compared to profit of Rs. 307.59 Lacs of previous year as the margins were adversely affected due to rise in input costs (mainly Raw Materials). Company is trying to improve profitability by increasing sales of Sewing Thread (Finished Product) in local market. The Company is in the process for getting approval from various Overseas Vendors for using Pasupati Thread in their products.

RECENT DEVELOPMENTS

Capital Reduction by 60%

The Company was declared a sick company by the BIFR on 14.07.2005 and Bank of Baroda was appointed as the operating agency (OA) under Section 17 (3) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Hon'ble Bench of BIFR finally sanctioned Rehabilitation Scheme vide its order dated 17.02.2012. Pursuant to the terms of Rehabilitation Scheme as approved by the Hon'ble BIFR, the company reduced its share capital by 60% i.e. from Rs. 5,70,65,060/- (Rupees Five Crores Seventy Lacs Sixty Five Thousand and Sixty only) to Rs. 2,28,26,020/- (Rupees Two Crores Twenty Eight Lacs Twenty Six Thousand and Twenty only) and thereafter consolidated into 2372602 equity shares comprising of 2222602 fully paid up shares of Rs. 10/- each and 150,000 partly paid up shares of Rs. 10 each, by passing special resolution in its Extra Ordinary General Meeting duly held on 13.02.2012.

As on 31.03.2012, the total Paid up share capital of the Company stands as Rs. 2,37,26,020/- divided into 2372602 equity share of Rs. 10 each.

Full & Final Settlement of 14%, / 15% Redeemable Partly Convertible Debentures and 19% Debentures

The Hon'ble BIFR has also directed that all the debenture-holders shall be paid 75% of out standing amount in full and final settlement of all their claims and such amount shall be paid in 24 equal monthly installments with the complete waiver of entire simple interest, penal interest, compound interest, liquidated damages and any other charges of whatsoever nature and 25% of the outstanding principal amount. Accordingly, the company has already started paying the dues of all debenturholders as per the directions of BIFR.

DIVIDEND

In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956 :

Your Directors hereby confirm that :

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the period.

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) the directors had prepared the annual accounts on a going concern basis.

COST AUDIT

The Central Govt. has approved the appointment of M/s Avtar Singh & Company as cost auditors for conducting Cost Audit for the Financial Year 2011-12.

The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2012 will be submitted to the Central Government in due course.

AUDITORS

M/s. B.K. Shroff & Co., Chartered Accountants, auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. Based on the recommendation of the Audit Committee, the Board of Directors proposes to the reappointment of M/s. B.K. Shroff & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

M/s. B.K. Shroff & Co., Chartered Accountants, have expressed their willingness to act as Statutory Auditors of the Company, if reappointed, and have further confirmed that the said reappointment would be in conformity with the provisions of Section 224 (IB) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

There is no employee in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

STATEMENT PURSUANT TO LISTING AGREEMENT (S)

The Company's securities are listed at Mumbai Stock Exchange & Delhi Stock Exchange and the Company has paid Annual Listing Fee to Bombay Stock Exchange for the year under review & for the current year.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid clause 49, is attached to this report.

DIRECTORS

Shri Ashwani Kumar Rathore was co-opted as director on the Board of the company w.e.f. 25.02.2012 as an additional director.

Shri Praveen Paliwal is the director, who retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

AUDITORS' REMARKS

The Auditors' observations regarding Note Nos. 3, 4(v)(b), 4(v)(c), 4(vi)(g), 11, 30(b) and 32 have been suitably explained in accompanying Notes to the Notes to the Financial Statements. The same are however again explained hereunder :

Note 3 The explanation given is self explanatory, hence does not call for further comments.

Notes 4(v)(b) and (c) SASF(IDBI) had assigned its outstanding debt in favour of J M Financial Asset Reconstruction Company Private Limited (JMFARC) on 19th March 2010. Subsequently, JMFARC agreed to restructure the said debt on certain terms and conditions, which have already been approved by BIFR in the sanctioned scheme. As per the scheme, Rs. 4 Crore will be converted into equity and balance of Rs. 6 Crore will be converted into Optionally Cumulative Convertible Debentures, which in turn will also be converted into equity. Hence, the company feels that provision of interest is not required to be made in accounts. Similarly, the proposed waiver of Rs. 6.45 Crore by JMFARC will be given effect in company's accounts only on full implementation of Rehabilitation Scheme sanctioned by BFIR.

Note 4(vi)(g)

As per the scheme sanctioned by BIFR, the dues of debenture holders are to be settled at 75% of the principal amount to be paid in 24 equal monthly instalments. In view of the scheme sanctioned by BIFR, no provision of interest liability has been made in accounts.

Note 11

Although, the company has made representation to the competent authority for payment of compensation at market rate in respect of part of company's factory land acquired by Government of Haryana, the company feels that final decision in this regard may take a very long time and moreover there is uncertainty about the success of company's representation. Hence, it has been decided that its affect would be given in company's books as and when actual compensation is received from Government of Haryana.

Note 30(b)

The company has already applied to Central Government for necessary permission for payment of remuneration to Directors.

Note 32

The company's Rehabilitation Scheme has been sanctioned by BIFR vide its order dated 17.02.2012. The company has already started implementing the said scheme and on full implementation of the said scheme, the company's net worth will become positive. Therefore, the company has rightly prepared its accounts on the assumption that the company is a going concern.

ADDITIONAL INFORMATION

Energy conservation measures, progress made in technology absorption and foreign exchange earning and outgo, as required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, 1988 is annexed and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co- operation received from Banks, Central and State Governments, dealers, customers, vendors, members, executives, staff and workers of the company during the year under review.

For and on behalf of Board of Directors

Sd/-

Place : New Delhi RAMESH KUMAR JAIN

Dated : 30th May, 2012 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2011

The Directors have pleasure in presenting their Report together with the Audited Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

For the Year For the Year 2010-11 2009-10 (Rs. in Lacs) (Rs. In Lacs)

Sales and other Income 11075.73 8896.92

Profit before Interest and Depreciation 1389.89 285.38

Financial Charges 775.63 395.67

Depreciation 306.67 310.36

Profit / (Loss) before Taxes 307.59 (420.65)

Payment / Provision for Taxes - (165.80)

Profit / (Loss) after taxation but before extra-ordinary items 307.59 (254.85)

Extra-ordinary Items 0.04 0.04

Net profit after extra ordinary items 307.63 (254.81)

FINANCIAL HIGHLIGHTS

During the year under review, the net profit of the company after depreciation and before tax has increased to Rs. 307.59 Lacs as compared to loss of Rs 420.65 Lacs of previous year. Profit after extra ordinary items for the financial year 2010-11 stood at Rs. 307.63 Lacs as against loss of Rs. 254.81 Lacs of previous year.

OPERATIONS

General working of the company is satisfactory. However, profit margin of company effected due to rise in Input costs (Including Raw Material, Power, Employees Cost) Company is trying to improve profitability by increasing sales of Sewing Thread (Finished Product) in local market. The Company is in process for getting approval from various Overseas Vendors for using Pasupati Thread in their products. Presently, we are approved by GAP, Mother Care, C & A , Next and Tommy Hillfiger etc. We are expecting more approval from various other vendors shortly.

The Company is hopeful to increase sales in domestic market of their sewing thread by 20% during the year 2011-12.

REFERRING THE COMPANY TO BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION

As mentioned in the last years report, the Company has already been declared a Sick Unit u/s 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 14.07.2005. The requisite proceedings for the restructuring of the company are in process with BIFR.

DIVIDEND

In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956 :

Your Directors hereby confirm that :

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the annual accounts on a going concern basis.

COST AUDIT

The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2011 will be submitted to the Central Government in due course.

AUDITORS

M/s. B. K. Shroff & Co., Chartered Accountants, auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. Based on the recommendation of the Audit Committee, the Board of Directors proposes to the reappointment of M/s. B. K. Shroff & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

M/s. B. K. Shroff & Co., Chartered Accountants, have expressed their willingness to act as Statutory Auditors of the Company, if reappointed, and have further confirmed that the said reappointment would be in conformity with the provisions of Section 224 (IB) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

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

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

STATEMENT PURSUANT TO LISTING AGREEMENT (S)

The Company’s securities are listed at Bombay Stock Exchange Ltd. & Delhi Stock Exchange and the Company has paid Annual Listing Fee to Bombay Stock Exchange for the year under review & for the current year.

CORPORATE GOVERNANCE

A report on the implementation of Corporate Governance is enclosed which forms a part of Directors’ Report.

DIRECTORS

Shri Ghanshyam Dass Gupta was co-opted as director on the Board of the company w.e.f 21.07.02011.

AUDITORS’ REMARKS

The Auditors’ observations regarding Note Nos. 4, 5(ii), 5(iii), 6(g), 8, and 22 have been suitably explained in Notes to the Accounts (Schedule 21). The same are however again explained hereunder :

Note 4

The company is registered with BIFR and its Draft Rehabilitation Scheme (DRS) has already been approved by all the secured lenders and submitted to BIFR for final circulation / orders, hence the company is on the path of revival. Therefore, the company has rightly prepared its accounts on the assumption that the company is a going concern.

Notes 5(ii) and 5(iii)

SASF(IDBI) had assigned its outstanding debt in favor of J M Financial Asset Reconstruction Company Private Limited (JMFARC) on 19th March 2010. Subsequently, JMFARC agreed to restructure the said debt on certain terms and conditions, which are subject to approval by BIFR. In case, BIFR does not approve the scheme, the interest liability will arise on Rs. 10 crore proposed to be converted into Equity / Optionally Cumulative Convertible Debentures. Similarly, the proposed waiver of Rs. 6.45 Crore by JMFARC is also subject to approval by BIFR. Since both are contingent in nature, the company has rightly not given any financial impact of these transactions in the accounts.

Note 6(g)

The company has settled dues of more than 96% of secured lenders. Under the proposed DRS submitted to BIFR, dues of debenture-holders are proposed to be settled on the same terms as offered to majority of the lenders, therefore no provision of interest liability has been made in accounts.

Note 8

The explanation given is self explanatory, hence does not call for further comments.

Note 22

The company has already applied to Central Government for necessary permission for payment of remuneration to Directors.

ADDITIONAL INFORMATION

Energy conservation measures, progress made in technology absorption and foreign exchange earning and outgo, as required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, 1988 is annexed and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co- operation received from J. M. Financial Asset Reconstruction Company Private Limited, Banks, Central and Statement Governments, dealers and customers of the Company.

For and on behalf of

The Board of Directors

Place : New Delhi RAMESH KUMAR JAIN

Dated : 2nd September, 2011 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2010

The Directors present their Report together with the Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS:

For the Year For the Year 2009-10 2008-09 (Rs. in Lacs) (Rs. In Lacs)

Sales & Other Income 8896.62 10331.15

Profit before Interest and Depreciation 285.38 505.47

Financial Charges 395.67 673.20

Depreciation 310.36 371.30

(Loss) / Profit before Taxes (420.65) (539.04)

Payment / Provision for Taxes (165.80) 189.12

(Loss) / Profit after Taxation but before extra-ordinary items (254.85) (728.16)

Extra-ordinary items 0.04 7515.18

Impairment of Fixed Assets - (802.22)

Net (Loss) / Profit after extra ordinary items(254.81) 5984.80



OPERATIONS :

During the year under review, your company achieved Sales Turnover of Rs. 8896.62 Lacs as against Rs. 10331.15 Lacs in the previous year. The turnover is lower as production activities of companys EOU unit at Dharuhera remained suspended during the year, which was partly operational in previous year. However the turnover of Sewing Thread Unit has gone up from Rs. 7110.33 Lacs to Rs. 7451.28 Lacs showing a marginal increase of about 5%. The company incurred Net loss (before extra-ordinary items) of Rs. 254.85 Lacs as against loss of Rs. 728.16 Lacs during the previous year.

The working of our Sewing Thread unit during the year 2009-10 has improved marginally. Tha company is continuously trying to shift its production base to more value added items, which has started yielding favourable results. The export realisation has also started improving due to overall improvement in international scenario. The full impact of the same should be visible in companys performance during 2011-12. However, recently the capacity utilization has been adversely affected due to labour shortage. The company is trying its level best to overcome this problem by participating in jobfairs and also by recruiting apprentice / trainees.

The production activities at companys EOU unit at Dharuhera remained suspended during the year. However, knitting and garments unit at Dharuhera is working smoothly and improving every month. We are now supplying garments for various reputed brands like Big Bazar, Pantaloon, Reliance Retail, Le Coopers etc.

SETTLEMENT WITH FINANCIAL INSTITUTIONS :

SASF(IDBI), the only major term lender has assigned its outstanding debt in favour of J.M. Financial Asset Reconstruction Company Private Limited (JMFARC) on 19th March 2010. Further, JMFARC has also agreed in principle to restructure the outstanding debt on certain terms and conditions, which are subject to approval by BIFR.

REFERRING THE COMPANY TO BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION (BIFR):

As mentioned in the last years report, the Company was declared a sick industrial company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 14.07.2005 and Bank of Baroda was appointed as operating agency (OA) to examine viability of the company and formulate rehabilitation scheme. OA has since completed its examination and also submitted a Draft Rehabilitation Scheme to BIFR for its approval.

DIVIDEND:

In view of non-availability of distributable profits, the Board of Directors is not in a position to recommend any dividend for the year under review.

DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956:

Your Directors hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting, standards had been followed along with proper explanation relating to material departures.

ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the period.

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the "company and for preventing and detecting fraud and other irregularities.

jv) the directors had prepared the annual accounts on a going concern basis.

INDUSTRIAL RELATIONS:

Industrial relations continued to be cordial during the year under review.

STATEMENT PURSUANT TO LISTING AGREEMENTS):

The Companys securities are listed at Bombay Stock Exchange & Delhi Stock Exchange and the Company has paid Annual Listing Fee to Bombay Stock Exchange for the year under review & for the current year.

CORPORATE GOVERNANCE:

A report on the implementation of Corporate Governance is enclosed which forms a part of Directors Report.

DIRECTORS:

Shri Praveen Paliwal was co-opted as Director on the Board of the Company with effect from 18.05.2009.

Shri Deepak Gupta (IDBI Nominee) ceased to be a Director of the Company with effect from 23.09.2009 as his nomination was withdrawn by IDBI. The Directors place on record their appreciation for the valuable services rendered by him during his tenure.

Shri Vidit Jain was co-opted as Director on the Board of the Company with effect from 01.04.2010 and also appointed as Executive Director.

AUDITORS REMARKS :

The observations as referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments.

ADDITIONAL INFORMATION :

Energy conservation measures, progress made in technology absorption and foreign exchange earning and outgo, as required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, 1988 is annexed and form part of this Report.

ACKNOWLEDGEMENT :

Your Directors wish to place on record their deep appreciation of the continued support and cooperation received from All India Financial Institutions, Banks, Central and Statement Governments, dealers and customers of the Company.



For and on behalf of

The Board of Directors

PLACE : NEW DELHI RAMESH KUMAR JAIN

DATED : SEPTEMBER 04, 2010 CHAIRMAN & MANAGING DIRECTOR

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