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Directors Report of Pil Italica Lifestyle Ltd.

Mar 31, 2015

Dear Members,

The Directors of your Company have pleasure in presenting their Twenty Third Annual Report and the Audited Accounts of the Company for the year ended 31.3.2015

1. FINANCIAL HIGHLIGHTS

Your Company's performance during the year as compared to the Previous year is summarised below :

(Rs. in lacs.)

Particulars 2014-2015 2013-2014

Turnover 3964.03 3469.78

Other Income 175.22 121.26

Profit/Loss(-)before Tax, Interest,

Depreciation and exceptional items 58.93 104.24

Interest 39.61 41.61

Depredation 36,41 87.67

Profit/(Loss) before Tax and exceptional -17.04 -25.04 items

Provisions for Income Tax 0 0

Exceptional items 213.37 1506.11

Profit/(Loss)after Tax and exceptional 196.33 1481.07 items

Surplus carried from previous year -2996.08 -6639.71

Balance carried to Balance Sheet -2799.75 -5158.64

Transfer from Capital Reduction reserve - 930.00

Principal Waiver as per BIFR scheme - 1232.56

Balance carried to Balance Sheet -2799.75 - 2996.08

2. DIVIDEND

Based on Company's Performance. the Directors are unable to recommend dividend due to inadequate profits.

3. STATE OF COMPANY'S AFFAIRS

The Company is engaged in the manufacturing of plastic moulded furniture and is one of the top most leading manufacturers in Rajasthan. The Company operates in only single segment unit. During the year, the Company recorded a turnover of Rs.3964.03 lakhs.(prev. year Rs. 3469.78 lakhs) registering a growth of 14.24 % over the previous year and earned a cash profit of Rs. 19.37 lakhs,Profit after Tax(PAT) for the year was Rs. 196.33 (in lacs) with a downfall of 86.74 % in comparision to the previous year's profit i.e. Rs. 1481.07(in lacs).

The Management is taking every possible step to stream line its operations and to put the Company on growth Its endeavours are manifesting the results despite of non-availability of adequate working capital , competitive environment etc

4. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statement relates and the date of report.

5. CHANGES IN THE NATURE OF BUSINESS : There is no change in nature of business.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134 sub-section (3) clause (c) of the Companies Act, 2013, it is stated that:

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

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

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, and the adequate steps have been taken to make it afresh, 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.

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 systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

Based on the work performed by the auditors .management and board committee's. board is of the opinion that Company's internal financial controls were adequate and effective during the year.

7. PERSONNEL :

During the year under review, no employee of the Company was in receipt of remuneration in excess of the limits prescribed under rule 5(2) of the Companies (Appointment And Remuneration of Managerial Personnel) Rules,2014

8. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

(a) DIRECTORS :

In terms of the Articles of Association of the Company, Mr. Mukesh Kumar Kothari retires at the ensuing Annual General Meeting, being eligible , offered himself for re-appointment. Your Directors recommend the above re-appointment.

(b) KEY MANAGERIAL PERSONNEL :

During the year, Ms. Aditi Parmar, was appointed as a Company Secretary with effect from December 12th,2014. in accordance with the provisions of the section 203(ii) of the Companies Act,2013. Ms. Aditi Parmar is an Associate Member of the Institute of Company Secretaries of India.

Pursuant to section 203(iii) of the Companies Act, 2013, Mr. Narendra Bhanawat was appointed as Chief Financial Officer of the company with effect from March 23rd, 2015. Mr. Narendra Bhanawat, is a Commerce Graduate having with 25 years experience in finance and accounts.

9. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERA- TION AND OTHER DETAILS

The company's policy on Director's appointment and remuneration and other details provided in section 178(3) of the Act has been disclosed in Corporate Governance Report,which forms part of Directors Report.

10. STATEMENT ON DECLARATION GIVEN BY THE INDEPEN- DENT DIRECTOR U/S 149(6) OF THE COMPANIES ACT, 2013

It is stated that pursuant to the Provisions of Companies Act,2013, the declaration given by the Independent Directors meets the criteria of independence as mentioned in the Schedule IV of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

11. NO. OF MEETINGS OF THE BOARD

Eleven meetings were conducted by the Board during the year. For details of meeting. please refer Corporate Governance Report,which forms part of this report.

12. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, committees of the board and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreement. The Board's performance was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition, effectiveness of committee meetings etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors and performance of the board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and Individual Directors was also discussed.

13. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The details in respect of internal control systems & their adequacy are included in Management Discussion & Analysis Report which forms part of the Director's report.

14. AUDIT COMMITTEE

Details pertaining to composition of audit committee are included in Corporate Governance Report,which forms part of Directors Report.

15. AUDITOR AND AUDITORS REPORT

A. STATUTORY AUDITOR

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder,M/s. Sampatilal Bohra & Co, Chartered Accountants, Udaipur appointed as the Statutory Auditors of the Company, from the conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting. The Auditors' Report does not contain any qualification, reservation or adverse remark.

B. SECRETARIAL AUDITOR

The Board appointed M/s P.Talesara & Associates, firm of Practising Company Secretary,Udaipur to conduct Secretarial Audit for the financial year 2014-15. Report of secretarial auditor is annexed as Annexure 1 forming part of Directors report.

Management Response: The qualification made by the Auditor is incorrect. The composition of the Board of Directors is duly in compliance with the provisions of the Companies Act,2013, Articles of Association of the Company, Equity Listing Agreement executed with the stock exchanges at which the equity shares are listed and traded including directors to retire by rotation.

16. EXTRACT OF ANNUAL RETURN

Extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013 is attached herewith as Annexure 2.

17. TRANSACTION WITH RELATED PARTIES

Your Company has not entered into any contract or arrangement or transaction with its related parties which is not at arm's length during financial year 2014-15 which falls under the scope of Section 188(1) of the Act, Form AOC 2 is enclosed as Annexure 3 forming part of Directors Report.

18. DISCLOSURE ON THE REMUNERATION OF MANAGERIAL PERSONNEL

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

1) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year: No remuneration by way of sitting fees and commission is paid to Non Executive Directors and hence not comparable. Ratio of remuneration of Executive Directors to median remuneration of employees :

Mr. Daud Ali : 15.38 and Mr. Narendra Bhanawat : 1.55

2) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, in the financial year 2014-15:-

Executive Directors,Chief Financial % increase/decrease in Officer and Company Secretary remuneration 2014-15

Daud Ali 102.70%

Narendra Bhanawat 165 %

Aditi Parmar(w.e.f. 12.12.2014)* -

* Appointed w.e.f. 12.12.2014,hence not comparable.

3) In the financial year, there was an increase of 8.95% in the median remuneration of employees.

4) There are 43 permanent employees on the rolls of Company as on 31 March,2015.

5) The explanation on the relationship between average increase in remuneration and Company performance On an average, employees received an annual increase of 10% every year. The individual increments varied based on individual performances.

6) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the Company:-

Aggregate remuneration of key managerial personnel (KMP) in FY15 (lacs) 20.89

Revenue (lacs) 3964.03

Remuneration of KMP's (as % of revenue) 0.52

Profit After Tax (PAT) (lacs) 96.33

Remuneration of KMP (as % of PAT) 10.64

7) Variation in the market capitalisation of the Company, price earnings ratio as at the closing, date of the current financial year and previous financial year:

Particulars March 31, 2015 March 31,2014 % change

Market capitalization 72,18,75,000 20,61,50,000 250

PE Ratio 136.18 1.14 13073.68

8) Percent increase / decrease in the market quotation of the shares of the Company as compared to the rate which company came out with the last public offer in the year: The company came out with the IPO in the year 1992, The amount of Rs.590 lacs invested in the said IPO would be worth Rs. 811 Lacs as on march 31rd,2015 indicating a rise of 37 %.

9) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification :

The annual average increase was around 10% However, there is increase in 10.26% in comparision to the fiscal year 2013-14. Justification: Increase in salaries of Key Managerial Personnel are based on performance of Individuals,Inflation, and many other factors, therefore comparison of one against the other is not feasible.

10) Comparison of each remuneration of the key managerial Personnel against the performance of the Company:

Daud Ali Narendra Aditi Parmar* Managing Bhanawat Company Director WTD and Secretary CFO (in lacs) (in lacs) (in lacs)

Remuneration in FY15 20.16 0.73 0.12

Revenue (in lacs) 3964.03

Remuneration as % of revenue .51 .018 -

Profit after Tax (PAT) (in lacs) 196.33

Remuneration's % of PAT) 10.26 0.37 -

'since, this information is for the part of the year, hence not comparable.

11) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year - None

12) The company affirms remuneration is as per the remuneration policy of the Company to all the Directors, Key Managerial Personnel and other Employees.

19. SHARE CAPITAL

During the year under report, the Issued, subscribed and paid up capital of the Company increased to Rs. 2100 lacs from Rs. 1550 lacs with the allotment of 13750,000 equity shares of Rs. 4/- each consequent upon exercise of the option attached to the Convertible Warrants by the holders of such warrants. The equity shares have been listed on Mumbai Stock Exchange and National Stock Exchange Limited.

20. DELISTING OF EQUITY SHARES FROM JAIPUR STOCK EXCHANGES

Due to exit route order passed by SEBI vide Circular dated May 30, 2012..the equity shares of the company are no more listed on Jaipur Stock Exchange Limited (JSEL).

21. DEPOSITS

The Company has not accepted any deposits and no non- compliance occurred with respect to repaying of deposits during the year.

22. DEPOSITORY SYSTEM

The Company is already into Agreements with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

23. ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established vigil mechanism policy for the Directors and Employees to report their genuine concerns or grievances. The policy has been hosted on the Company's Website : www.ltalicafurniture.com. The policy provides for adequate safeguard against victimisation of employees and Directors to have direct access to the Chairman or members of the Audit Committee or Company Secretary of the company. This policy aims to:

Allow and encourage employees and business associates to bring to the management notice concerns about suspected unethical behavior, malpractice, wrongful conduct, fraud, violation of policies.

Ensure timely and consistent organizational response.

Build and strengthen a culture of transparency and trust.

Provide protection against victimization.

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

CONSERVATION OF ENERGY

The Company lays great emphasis in the savings cost of energy consumption. Therefore,reduction in the per unit consumption of energy is on going exercise in the Company. Effective measures have been taken to minimize the lossess of energy as far as possible.

TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company does not have a separate Research and Development activity. The Company has not imported any technology.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review, there was foreign exchange earnings in INR 9,21,900 (US S 14962.50)(calculated on the basis of F.O.B. value)

25. CORPORATE GOVERNANCE REPORT

Pursuant to the Listing Agreement with the Stock Exchange, Report on Corporate Governance is enclosed after Directors Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is annexed as Annexure 4 forming part of Directors Report.

27. ACKNOWLEDGEMENT

Your Directors express their deep sense of appreciation for the contribution made by the Staff .workers and all other employees of the Company for the successful growth in the operations of our business.

The Directors also thank the Banks, Financial Institutions, Customers, Suppliers, Shareholders, Central and State Government Authorities etc. for their continuous co-operation and support that contributed in the growth and prosperity of your Company. Your Directors look forward to the continued support of these partners in progress.

For and on behalf of the Board of Directors

Sd/- Sd/- DAUD ALI NARENDRA BHANAWAT (Managing Director) (Whole Time Director and DIN : 185336 Chief Financial Officer) DIN : 146824


Mar 31, 2013

To The Members,

The Directors of your Company lhave pleasure in presenting their Twenty First Annual Report and the Audited Accounts of the Company for the year ended 31.3.2013

FINANCIAL RESULTS

(Rs. in lacs.)

Particulars 2012-2013 2011-2012

Turnover 2800.22 2451.91

Other Income 37.67 81.66

Profit/Loss(-)before Tax, Interest,

Depreciation and extra ordinary items 50.13 49.98

Interest 37.18 43.42

Depreciation 109.45 109.03

Profit/(Loss) before Tax and extra ordinary itemst -96.50 -102.47

Provisions for Income Tax 0 0

Extra Ordinary items 308.65 0

Profit/(Loss)after Tax and extra ordinary items 212.15 -102.47

Surplus carried from previous year -6851.86 -6749.39

Balance carried to Balance Sheet -6639.71 -6851.86



DIVIDEND

your Directors are unable to recommend any dividend for the year 2012- 2013,as the amount is kept for the Company''s future operations

OPERATIONS

During the year under review the Company recorded a turnover of Rs.2800.22 lakhs (pr.yr. Rs. 2451.91 lakhs) and incurred a loss of Rs.96.50 lakhs (Pr.Yr. Rs. 102.47 lakhs) before considering extra ordinary items.

The bottom line continues to be under pressure due to non avalibility of adequate working capital facilities leading to under utilisation of the manufacturing facilities culminating in to high cost of production. The bottom line is also under pressure due to increased competition and declining margin coupled with the rising cost of the component of the production.

REHABILITATION AND REVIVAL

As you are aware your Company was declared a sick industrial Company by the Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 21.12.1998.The BIFR has circulated a draft revival scheme prepared by the operating agency viz. IDBI for the revival of the Company to the concerning persons for their consent.

DIRECTORS

Mr.Mukesh Kumar Kothari .Director, retire by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting.

FIXED DEPOSITS

The Company has not accepted any deposit from public during the year ended 31st March, 2013, under section 58-A of the Companies Act, 1956.

HUMAN RESOURCES

Your Directors would like to place on record their appreciation of the efficient and loyal services rendered by all staff and workforce of the Company, without whose wholehearted efforts, the overall satisfactory performance would not have been possible.

There are no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

DIRECTORS'' RESPONSIBILITY-STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, it is stated that:

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

(ii) the directors had selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss (without considering the non-provisions of interest, etc. as stated in the Note No.30) of the Company for that period;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records, except Fixed Assets Register which is missing and the adequate steps have been taken to make it afresh, 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)Your Company has been declared Sick by the Board for Industrial and financial Reconstruction (BIFR) vide its order dated 21-12-1998, The BIFR has circulated a draft revival scheme prepared by the operating agency viz. IDBI for the revival of the Company to the concerning persons for their consent. In view of this the Accounts had been prepared on a ''going concern basis''.

CONSERVATION OF ENERGY

The Company lays great emphasis on savings in the cost of energy consumption. Therefore, achieving reduction in the per unit consumption of energy is on going exercise in the Company. Effective measures have been taken to minimize the lossess of energy as far as possible.

TECHNOLOGY IMPORT AND ABSORPTION

Constant watch is kept on market trends. New designs are developed to cater market requirements. Processes are adapted to improve product quality thus meeting requirements for use on the latest market trends. The Company does not have a separate Research and Development activity.

The Company has not imported any technology.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review there was no earnings and outgo in foreign exchange.

AUDITORS AND AUDITORS-REPORTS

M/S Sampatilal Bohara & Co., Chartered Accountants, Udaipur retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Their remuneration for the current year is to be fixed by you.

The Auditors'' observations in their report are self explanatory and hence do not call for any further clarification under section 217 (3) of the Companies Act,1956.

Cost Auditors:

The Ministry of Corporate Affairs (MCA) has introduced The Companies (Cost Accounting Records) Rules, 2011 published vide GSR 430(E) dated 03rd June, 2011 which have become applicable '' to the Company with effect from the financial year 2011-12. Henceforth, the Company is required to maintain and keep cost records of all its units and branches. Further the Company to which ¦ these rules apply is required to submit a Compliance Report duly - certified by a Cost Accountant, along with the Annexure to the Central Government in prescribed Form. In view of the above, based on the recommendations of Audit Committee, the Board of Directors 1 at its meeting held on 27lh May,2013 has appointed M.S.Mehta & Associates, a Practicing Cost Accountant, as the Cost Auditor to issue ComplianceCertificate for the financial year 2012-2013.

Further, in compliance with the Industry wise specific Cost Audit order no. 52/26/CAB-2010 dated 6th November, 2012, which became applicable to the products manufactured by the company, M.S.Mehta & Associates has been appointed as the cost Auditor to conduct cost audit for the financial year 2013-14 at Board meeting of the company held on 27th May, 2013.

CORPORATE GOVERNANCE

A separate report on the compliance with clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors'' Certificate on its compliance form a part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report on the operation of the Company is provided in a separate section and forms a part this Report.

SAFETY

Adequate safety measures and safe working practices have been implemented to ensure safety of workforce, plant and Machinery as well as of the enviornment.

APPRECIATION

Your Directors wish to place on record their appreciation of co-operation and support received from the banks, financial Institutions, Customers, Suppliers, Shareholders, Central and State Government Authorities etc. to the continued growth and prosperity of your Company. Your Directors look forward to the continued support of these partners in progress.

Your Directors also wish to place on record their deep sense of appreciation for the devoted services of the executives, Staff and Workers of the Company for its success.

Place : Udaipur for and on behalf of the Board of Directors

Dated: 27-05-2013 DAUD ALI NARENDRA BHANAWAT

Managing Director Executive Director


Mar 31, 2012

The Directors of your Company have pleasure in presenting their Twentieth Annual Report and the Audited Accounts of the Company for the year ended 31.3.2012.

FINANCIAL RESULTS

(Rs. in lacs.)

Particulars 2011-2012 2010-2011

Turnover 2451.91 2090.96

Other Income 81.66 0.64

Profit/Loss(-)before Tax, Interest, Depreciation and extra ordinary items 49.98 8.96

Interest 43.42 0

Depreciation 109.03 109.62

Profit/(loss) before Tax and extra ordinary items -102.47 -100.66

Provisions for Income Tax 0 0

Extra Ordinary items 0 2911.67

Profit/(Loss)after Tax and extra ordinary items 0 2811.01

Surplus carried from previous year -6749.39 -9560.40

Balance carried to Balance Sheet -6851.86 -6749.39

DIVIDEND

In view of the poor performance of the Company your Directors are unable to recommend any dividend for the year 2011-2012.

OPERATIONS

During the year under review the Company recorded a turnover of Rs.2451.91 lakhs (pr.yr. Rs. 2090.96 lakhs) and incurred a loss of Rs. 102.47 lakhs (Pr.Yr. Rs. 100.66 lakhs) before considering extra ordinary items.

The bottom line continues to be under pressure due to non avalibility of adequate working capital facilities leading to under utilisation of the manufacturing facilities culminating in to high cost of production. The bottom line is also under pressure due to increased competition and declining margin coupled with the rising cost of the component of the production.

REHABILITATION AND REVIVAL

As you are aware your Company was declared a sick industrial Company by the Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 21.12.1998 In spite of all the endeavour, the BIFR recommended the winding of the Company against which an appeal has been preferred to the AAIFR and AAIFR has set aside the orders of BIFR and has remanded back matter to BIFR. BIFR/ IDBI (OA) is in process of formulating Draft revival Scheme.

DIRECTORS

Mr.Magan Lai Sharma,Director, retire by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting.

FIXED DEPOSITS

The Company has not accepted any deposit from public during the year ended 31st March, 2012, under section 58-A of the Companies Act, 1956.

HUMAN RESOURCES

Your Directors would like to place on record their appreciation of the efficient and loyal services rendered by all staff and workforce of the Company, without whose wholehearted efforts, the overall satisfactory performance would not have been possible.

There are no employees covered under the provisions of Section. 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, it is stated that:

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

(ii) the directors had selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss (without considering the non-provisions of interest, etc. as stated in the Note No.30) of the Company for that period;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records, except Fixed Assets Register which is missing and the adequate steps have been taken to make it afresh, 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) Your Company has been declared Sick by the Board for Industrial and financial Reconstruction (BIFR) vide its order dated 21-12-1998, BIFR vide its order dated 22-02-2007 recommended winding up of the Company. However Company preferred an appeal at AAIFR, AAIFR has set aside the orders of BIFR and has remanded back matter to BIFR. BIFR/ IDBI (OA) is in process of formulating Draft revival Scheme. In view of this the Accounts had been prepared on a 'going concern basis'.

CONSERVATION OF ENERGY

The Company lays great emphasis on savings in the cost of energy consumption. Therefore, achieving reduction in the per unit consumption of energy is on going exercise in the Company. Effective measures have been taken to minimize the lossess of energy as far as possible.

TECHNOLOGY IMPORT AND ABSORPTION

Constant watch is kept on market trends. New designs are developed to cater market requirements. Processes are adapted to improve product quality thus meeting requirements for use on the latest market trends. The Company does not have a separate Research and Development activity.

The Company has not imported any technology.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review there was no earnings and outgo in foreign exchange.

AUDITORS AND AUDITORS'REPORTS

M/S Sampatilal Bohara & Co., Chartered Accountants, Udaipur retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Their remuneration for the current year is to be fixed by you.

The Auditors' observations in their report are self explanatory and hence do not call for any further clarification under section 217 (3) of the Companies Act, 1956.

CORPORATE GOVERNANCE

A separate report on the compliance with clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors' Certificate on its compliance form a part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report on the operation of the Company is provided in a separate section and forms a part this Report. SAFETY

Adequate safety measures and safe working practices have been implemented to ensure safety of workforce, plant and Machinery as well as of the environment.

APPRECIATION

Your Directors wish to place on record their appreciation of co-operation and support received from the banks, financial Institutions, Customers, Suppliers, Shareholders, Central and State Government Authorities etc. to the continued growth and prosperity of your Company. Your Directors look forward to the continued support of these partners in progress.

Your Directors also wish to place on record their deep sense of appreciation for the devoted services of the executives, Staff and Workers of the Company for its success.

Place : Udaipur for and on behalf of the Board of Directors

Dated : 23-05-2012

DAUD ALI NARENDRA BHANAWAT

Managing Director Executive Director


Mar 31, 2011

To The Members,

The Directors of your Company have pleasure in presenting their Nineteenth Annual Report and the Audited Accounts of the Company for the year ended 31.3.2011.

FINANCIAL RESULTS

(Rs. In lacs.)

Particulars 2010-2011 2009-2010

Turnover 2307.93 1920.98

Other Income 0.64 0

Protit/Loss(-)before Tax, Interest, 8.96 98.80 Depreciation and extra ordinary items

Interest 0 0

-Depreciation 109.62 243.95

Profit/(Loss) before Tax and extra ordinary

items -100.66 -145.15

Provisions for Income Tax 0 0

Extra Ordinary items 2911.67 0

Profit/(Loss)after Tax and extra 2911.67 -145.15 ordinary items

Surplus carried from previous year -9560.40 -9415.25

Balance carried to Balance Sheet -6749.39 -9560.40

DIVIDEND

In view of the poor performance of the Company your Directors are unable to recommend any dividend for the year 2010-2011.

OPERATIONS

During the year under review the Company recorded a turnover of Rs. 2307.93 lakhs (pr.yr. Rs. 1920.98 lakhs) and incurred a loss of Rs. 100.66 lakhs (Pr. Yr. Rs. 145.15 lakhs) before considering extra ordinary items.

The bottom line continues to be under pressure due to non avalibility of adequate working capital facilities leading to under utilisation of the manufacturing facilities culminating in to high cost of production. The bottom line is also under pressure due to increased competition and declining margin coupled with the rising cost of the component of the production.

REHABILITATION AND REVIVAL

As you are aware your Company was declared a sick industrial Company by the Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 21.12.1998 In spite of all the endeavour, the BIFR recommended the winding of the Company against which an appeal has been preferred to the AAIFR and the same is pending for adjudication.

Your directors are fully confident that the Company is potentially viable and can be revived. With this zeal and happy to communicate that during the year under review your Company entered into negotiated settlements with its secured lenders and their assignees and settled their dues.

In order to discharge the settled amount the Company borrowed a sum of Rs. 516.50 lakhs on the security of its assets. Further under the settlement the Stressed assets Stabilisation Fund-assignee of Industrial Development Bank of India agreed to accept Rs. 640 lakhs including interest over a period of eight years.

The company continues to make payment as per the schedule of payment and there is no default.

DIRECTORS

Mr.Mukesh Kumar Kothari,Director, retire by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting.

FIXED DEPOSITS

The Company has not accepted any deposit from public during the year ended 31 st March, 2011, under section 58-A of the Companies Act, 1956.

HUMAN RESOURCES

Your Directors would like to place on record their appreciation of the efficient and loyal services rendered by all staff and workforce of the Company, without whose wholehearted efforts, the overall satisfactory performance would not have been possible.

There are no employees covered under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, it is stated that:

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

(ii) the directors had selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss (without considering the non-provisions of interest, etc. as stated in the Notes to Accounts - schedule 14) of the Company for that period;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records, except Fixed Assets Register which is missing and the adequate steps have been taken to make it afresh, 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) Your Company has been declared Sick by the Board for Industrial and financial Reconstruction (BIFR) vide its order dated 21-12-1998, BIFR vide its order dated 22-02-2007 recommended winding up of the Company. However Company preferred an appeal, AAIFR has stayed the impunged order. The management feels that result will come in to the company"s favour. In view of this the Accounts had been prepared on a going concern basis.

CONSERVATION OF ENERGY

The Company lays great emphasis on savings in the cost of energy consumption. Therefore, achieving reduction in the per unit consumption of energy is on going exercise in the Company. Effective measures have been taken to minimize the lossess of energy as far as possible.

TECHNOLOGY IMPORT AND ABSORPTION

Constant watch is kept on market trends. New designs are developed to cater market requirements. Processes are adapted to improve product quality thus meeting requirements for use on the latest market trends. The Company does not have a sepa-rate Research and Development activity.

The Company has not imported any technology.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review there was no earnings and outgo in foreign exchange.

AUDITORS AND AUDITORS' REPORTS

M/S Sampatilal Bohara & Co., Chartered Accountants, Udaipur retire at the ensuing Annual General Meeting and being eligible, Qffer themselves for re-appointment. Their remuneration for the current year is to be fixed by you.

The Auditors' observations in their report are self explanatory and hence do not call for any further clarification under section 217 (3) of the Companies Act,1956.

CORPORATE GOVERNANCE

A separate report on the compliance with clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors' Certificate on its compliance form a part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report on the operation of the Company is provided in a separate section and forms a part this Report.

SAFETY

Adequate safety measures and safe working practices have been implemented to ensure safety of workforce, plant and Machinery as well as of the eriviornment.

APPRECIATION

Your Directors wish to place on record their appreciation of co-operation and support received from the banks, financial Institutions, Customers, Suppliers, Shareholders, Central and State Government Authorities etc. to the continued growth and prosperity of your Company. Your Directors look forward to the continued support of these partners in progress.

Your Directors also wish to place on record their deep sense of appreciation for the devoted services of the executives, Staff and Workers of the Company for its success.

for and on behalf of the Board of Directors

DAUD ALI NARENDRA BHANAWAT Managing Director Executive Director

Place : Udaipur Dated : 28-05-2011

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