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Directors Report of Raj Rayon Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 22nd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended on 31st March, 2015.

Financial Results:

(Rs. in Lacs)

Particulars Current Previous Year Year 2014-2015 2013-2014

Net Sales and Other Income 19169.17 47276.74

Net Profit before interest, 565.25 (4725.17)

Depreciation and Tax

Less: Interest 7108.72 4874.03

Depreciation 4240.75 3161.11

Profit/ (Loss) before Tax (10784.22) (12760.31)

Less: Provision for Current Tax 0.00 0.00

Provision for Deferred Tax (3297.96) (3982.51)

Tax Adjustment for earlier years 0.12 (152)

Profit/(Loss) After Tax/ Profit/ (7486.38) (8776.28) (Loss) for the Period

*Previous years' figures have been regrouped wherever necessary to bring them in line with the current year's representation of figures

Performance:

During the financial year, your Company recorded Net Sales and Other Income of Rs. 19169.17 Lacs as compared to Rs. 47276.74 Lacs of previous year. The Company incurred a Net Loss of Rs. 7486.38 Lacs as compared to previous year's Net Loss of Rs. 8776.28 Lacs. The Company incurred Cash losses of Rs. 3245.63 Lacs as compared to Cash Losses of Rs. 5615.17 Lacs of previous year.

Dividend:

In absence of profits for the year ended and past accumulated losses, your directors do not recommend payment of any dividend for the year ended 31st March, 2015.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, which also deals with the opportunities, challenges and the future outlook for the Company, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange of India, is presented in a separate section forming part of the Annual Report.

Updates on Expansion/modernisation:

During the Year under review, in order to utilize the surplus backward capacity of CP plant with aim for improvement in profitability, the company has undertaken Direct Polymer Melt (DPM POY) project for production of POY by utilizing Direct Polymer Melt produced by CP plant The plant has been implemented in August 2014 and commercial operation of dPm POY plant has started in October 2014. The Capacity of the plant is 75347 MTPA. During the implementation of this project some old/obsolete POY Lines have also been replaced/sold.

Corporate Debt Restructuring (CDR):

The detailed key features of the CDR Proposal are given in under Notes No. 2 of Notes forming part of Notes to Accounts given in this Annual Report.

Internal Control System and Adequacy:

The Board has adopted the policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of financial disclosures.

The Company's Internal Audit department evaluates the efficiency and adequacy of internal control system and gives its report and recommendations to the Chairman of Audit Committee and based on Internal Audit Report the corrective actions are taken.

Subsidiary/Joint Ventures/Associate Companies:

Your Company does not have any subsidiary company or joint ventures however M/s. Raj Money Market Limited is its Associate Company, holding 35.55% Equity Shares (as on 31st March, 2015) in the Company.As on 31st March, 2015 the Company had a Net Worth of Rs. 127847935 and registered a Net Loss of (Rs. 725033).

Deposits:

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to National Stock Exchange Limited (NSE) and BSE Limited (BSE) where the Company's Shares are listed.

Statutory Auditors:

At the Annual General Meeting held on 30th September, 2014, M/s. K.M. Garg & Co., Chartered Accountants (Registration No. 120712W), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the four consecutive Annual General Meetings to be held in year 2018. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of Auditors shall be placed for ratification at every Annual General Meeting.

Accordingly, the appointment of M/s. K.M. Garg & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regards, the Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 of Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of Section 141 of Companies Act, 2013.

Auditors' observation and Management's response to Auditors' observation:

The Directors refer to the Auditors' observation in the Auditors' Report and provide their explanation as under:

i) In respect of Note 2 of the Financial Statement regarding amount payable towards recompense:

The recompense payable is contingent on various factors including improved performance of the Company (Borrowers) and many other conditions, the outcome of which currently is materially uncertain and cannot be determine.

ii) In respect of Auditors observation in Financial Statements regarding cash losses incurred by the Company:

It is clarified that the cash losses were primarily attributable to the lower volumes due to prevailing uncertain economic conditions, lower sales volume coupled with increase in depreciation and interest/finance cost.

Cost Auditor:

The Central Government had approved appointment of Mr. Jayant J. Paleja, Cost Accountant, Mumbai as Cost Auditor to conduct Cost Audit relating to the products manufactured by your Company for the financial year 2014-2015, the E-Form 23C for his appointment was filed on 23rd June, 2014. Further the Company has also appointed him to conduct the Cost Audit for the financial year 2015-2016 as per Section 148 of Companies Act, 2013 and his remuneration has to be ratified at the ensuing Annual General Meeting.

Secretarial Auditor:

The Company had appointed Prasad Raghunath Baraskar, Practicing Company Secretary to undertake Secretarial Audit of the Company, pursuant to Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 to conduct Secretarial Audit for the financial year 2014-2015.

The Secretarial Audit Report for the financial year 2014-2015 forms part of the Annual Report as Annexure I to the Board's Report.

Share Capital and Net Worth:

During the financial year there was no change in the Share Capital of the Company. However the Company took Members approval on 14th March, 2015 for issue 8.00 crs Equity Shares of Rs. 1/- each at par aggregating to Rs. 8.00 crs. The Company has received in-principle approvals from National Stock Exchange of India (NsE) on 30th March, 2015 and from BSE Limited on 15th April, 2015.

Further the Company has on 24th April, 2015 allotted 8.00 crs Equity Shares of Rs. 1/- each at par on preferential basis to allottees belonging to the category of Promoters and Non Promoters, consequently the paid-up share capital increased from Rs. 40,64,54,000 as on 31st March, 2015 to Rs. 48,64,54,000 as on the date of allotment.

Further the net worth of the Company has reduced to (Rs. 992.35 Lacs) as compared to Rs. 6503.52 Lacs in previous year. Since the Company's accumulated losses had resulted into erosion of more than fifty percent of its peak net worth during the immediately preceding four financial years i.e. Rs. 15279.80 Lacs, the Company proposes to make necessary reference to the Board for Industrial and Financial Reconstruction (BIFR) in due course of time pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985.

Extract of the annual return:

Pursuant to Section 134 (3) (a) of the Companies Act, 2013 an extract of the Annual Return in Form No. MGT - 9 is annexed herewith as Annexure II.

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(A) Conservation of energy:

The conservation of energy is of paramount importance and not only necessary for conserving national resources but also inevitable across all industry, as it has far reaching impact on the bottom line of the company. We have taken several steps in this regard related to our manufacturing activity but the key steps are-

1. We have taken initiatives for replacement of existing lights with "LED Lights" to save power consumption and during the current year we have completed this process in all the key areas where power consumption is high. In the ensuing year, we will complete the process of replacement of Existing Light with "LED Light" in all the area where it requires.

2. One of our key raw materials is PTA, which is available both in bags and tanker. Now we are bringing material in tankers as it directly fed in the process rather than bringing in Bag. As material brought in bags, require additional consumption of electrical energy on account of charging of electrical hoist for lifting and pulling down the bags.

3. The cooling Tower Fan and Air Cooler Fan are one of the major components which consume energy. We have optimised use of number of fans depending upon the temperature difference during the day and night.

4. We have optimised the plant process parameter, process activity and reduced the load on the cooling tower and chiller.

5. We have started using of turbo vent in place of electrical operated exhaust fan to contain electrical energy consumption.

(B) Technology absorption:

1. We have installed modern Power Capacitor Bank for increasing power factor which will directly reduce electric consumption.

2. We have implemented a Direct Polymer Melt line for direct consumption of melt instead of Polyester Chips for producing POY. This has actually reduced our process flow and not only improved quality but also reduced power consumption ratio per ton of production

(C) Foreign exchange earnings and Outgo:

The particulars regarding foreign exchange earnings and outgo are given in Note No. 37 and 39 Notes forming part of the Accounts.

Corporate Social Responsibility (CSR) Initiatives:

The Company has constituted a Corporate Social Responsibility (CSR) Committee as per provisions of Section 135 of Companies Act, 2013 to spend in various CSR initiatives as provided under schedule VII of the Companies Act, 2013 and rules made thereunder.

However due to losses suffered and your company been into Corporate Debt Restructuring (CDR), we didn't spend into any CSR activities/projects. However your Company is enthusiastic to serve the society at large, which it will do in the coming years.

Directors:

During the year the Company has re-designated Mr. Sushil Kumar Kanodia, from Chief Executive Officer to Chief Executive Officer and Chief Financial Officer of the Company. In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Association of the Company, Mr. Naval Babulal Kanodia, Whole Time Director of the Company retires by rotation and is eligible for re-appointment.

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.

Board Evaluation:

Pursuant to 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 and that of its committees and individual Directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

Remuneration Policy:

The Board of Directors has on recommendations of the Nomination & Remuneration Committee outlined policy for selection & appointment of Directors, Key Managerial Personnel & Senior Management and also to decide their remuneration along with the perks. The Nomination & Remuneration Committee revises the remuneration from time to time depending upon the performance of the Company and the Individual Director's/Key Managerial Personnel and other Senior Management. At Director level the Company pay's remuneration to Mr. Naval Babulal Kanodia, Whole Time Director of the Company.

Training of Independent Directors:

The Independent Directors appointed on the Board are made familiarised with the business and affairs of the Company in which the Company operates and its long terms plans and expectations.

At the time of appointment of Independent Director, the Company issues a formal letter of appointment providing in details their functions, roles & responsibility as an Independent Directors.

Board of Directors Meeting:

During the year ended 31st March, 2015, the Company had Nine (09) Board Meetings and the gap between the two meetings of the Board is as per Companies Act, 2013. The details of the Board Meetings are provided in the Corporate Governance Report.

Committees of Board:

Following are the various Committees formed by Board:

* Audit Committee

* Nomination & Remuneration Committee

* Stakeholders Relationship Committee

* Allotment Committee

* Risk Management Committee

* Corporate Social Responsibility Committee

The details of the composition of committees, its roles and responsibility along with no. of meetings held are given in the Report of Corporate Governance.

Vigil Mechanism:

The Company has established a vigil mechanism for its Directors and Employees to report genuine concerns relating any violations legal or regulatory requirements or misconduct in the Company through its Whistle Blower Policy. And also to report concerns of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct and ethics policy, incorrect or misrepresentation of any financial statements and reports thereon.

The protected disclosures will be dealt by the Chairman of the Audit Committee and the Chairman should address the same carry out the investigation and take needful action.

The policy on Whistle Blower as approved by the Board of Directors is uploaded on company's website.

Particulars of loans, guarantees or investments under Section 186:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Related Party Transactions:

All the related party transactions which were entered by the Company during the financial year were done on arm's length basis and were in the ordinary course of business of the Company. Also there are no materially significant related party transactions made by the company with Directors, Key Managerial Personnel, Promoter or any other designated persons which may conflict with the interest of the Company at large.

The policy on Materiality of Related Party Transactions as approved by the Board of Directors is uploaded on company's website.

Particulars of Employees and related disclosures:

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

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are required to be provided in the Annual Report. However there were no employees who were in receipt of remuneration for which details need to be disclosed.

Directors' Responsibility Statement:

The Directors' Responsibility Statement referred to in clause

(c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—

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

(b) the directors had 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 and loss of the company for that period;

(c) 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;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) 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.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Risk Management Policy:

The Company has laid down procedures to inform the members of the Board about the risk assessment and minimization procedures and the same is reviewed by the Board periodically. A Risk Management Committee has been duly constituted to formulate policy for framing, implementing and monitoring the risk management plan and to take remedial actions.

Prevention of Sexual Harassment at Workplace:

The Company has adopted Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the workplace, to provide protection to employees at the workplace. The Company has constituted Internal Complaints Committee as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 to consider and redress complaints of sexual harassment. The Committee has not received any complaints of sexual harassment during the year.

Corporate Governance Certificate:

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors' adhere to the requirements set out by the Securities and Exchange Board of India, Corporate Governance practice and have implemented all the prescribed stipulations.

Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, forms part of the Annual Report. Certificate from the Auditor of the Company M/s. K.M. Garg & Co., Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Acknowledgements:

Your Directors' would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives, Staff members and Workers of the Company.

For and on behalf of the Board of the Directors

SD/- Rajkumari Kanodia Place: Mumbai Non Executive Dated: 30th May, 2015 Chairperson & Director


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 21st Annual Report and the audited accounts for the year ended 31st March, 2014.

Financial Results:

(Rs in Lacs) Particulars Current Year Previous Year 2013-2014 2012-2013

Net Sales and Other Income 47276.74 71761.51

Net Profit before interest, (4725.17) 6533.39

Depreciation and Tax

Less: Interest 4874.03 3386.23

Depreciation 3161.11 2555.65

Profit before Tax (12760.31) 591.51

Less:Provision for Current Tax 0.00 186.38

Provisionfor Deferred Tax (3982.51) 85.70

Tax Adjustment for earlier years (1.52) (51.95)

Profit After Tax/ Profit for the Period (8776.28) 371.38

*Previous years'' figures have been regrouped wherever necessary to bring them in line with the current year''s representation of figures Performance:

During the financial year, your Company recorded Net Sales and Other Income of Rs. 47276.74 Lacs as compared to Rs. 71761.51 Lacs of previous year. The Company incurred a Net Loss of Rs. 8776.28 Lacs as compared to previous year''s Net Profit of Rs. 371.38 Lacs. The Company incurred Cash losses of Rs. 5615.17 Lacs as compared to Cash Profit of Rs. 2927.03 Lacs of previous year.

Dividend:

The Board of Director has not recommended any dividend on the Share Capital of the Company for the financial year 2013-2014 in view of losses and in compliance to approved restructuring proposal under CDR system.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, which also deals with the opportunities, challenges and the future outlook for the Company, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange of India, is presented in a separate section forming part of the Annual Report.

Updates on Expansion/modernisation:

During the Year under review, the company implemented Continuous Polymerisation (CP) plant which involves production of Polyester Chips (one of the key raw material for manufacturing POY). The commercial operation of CP plant started as per schedule in July, 2013. The Capacity of the plant is 153665 MTPA,

whereas existing capacity of the POY plant is 46891 MTPA. Considering both the plants put together if operates at 100% capacity utilization, the same lead to generation of surplus backward capacity of polyester chips of 106774 MTPA.

As such, during the year under review, in order to utilise the surplus backward capacity of CP plant with aim for improvement in profitability, the company has undertaken Direct Polymer Melt (DPM POY) project which will use Direct Polymer Melt produced by CP plant into POY. This will increase capacity of POY production from the current level of 46891 MTPA to 122238 MTPA (an increase of 75347 MTPA) after implementation of DPM POY project. During the implementation of this project some old/ obsolete POY Lines which were manufactured in 1975 will also be replaced/sold. The implementation started during the year under review with the support of the existing term lenders.

Corporate Debt Restructuring (CDR):

During the year under review, due to lower market demand, shortage in availability of raw material (PTA & MEG) domestically which needed for the Continuous Polymerisation plant coupled with higher cost of imported raw material leading to volatility in raw material prices, Rupee depreciation vis-a-vis USD , the company suffered losses and which forced the company to think about debt restructuring. Accordingly it took decision to undertake debt restructuring exercise under CDR mechanism that is governed by Corporate Debt Restructuring Scheme issued by Reserve Bank of India.

A Corporate Debt Restructuring Proposal ("CDR Proposal") as recommended by State Bank of India (Lead lender) and approved by other lenders who are members of CDR cell (herein after referred to as "CDR lenders") was approved by the CDR Empowered group ("CDR EG") at its meeting held on 24th March, 2014 and communicated to company vide Letter of approval dated 27th March, 2014.

The Master Restructuring Agreement ("MRA") between the Borrowers/Guarantors and CDR Lenders has been executed, by virtue of which the restructured facilities are governed by the provisions specified in the MRA. The CDR proposal includes moratorium on repayment of principal and interest of term debt, uniform interest rate with all the working capital and Term lenders (excluding TUFS Term loan), sanction of additional Working Capital proposed to be released with the implementation of DPM POY project. In terms of CDR Scheme, the promoters (on their own or together with their relatives, friends and associates) are required to bring Rs. 10.98 crore, which has already been infused. Key Features of the CDR Proposal

The financial restructuring package for your company was approved by the CDR cell and communicated to us vide their Letter of Approval dated 27th March, 2014.

The key features of the CDR package are:

1. It is to be implemented within a maximum period of 120 days from the date of approval of CDR EG i.e. 24th March, 2014.

2. The Cut-of-date is 01st August, 2013.

3. Re-schedulement of Term Loan and Short Term Loan so as to be repayable in 2 years moratorium and 8 year repayment (other than TUFS loan).

4. Interest rate on Working Capital and Term Loan @ 11% and 12.70% p.a. payable monthly respectively.

5. Additional working capital of Rs. 80.94 crore has been sanctioned.

The detailed key features of the CDR Proposal are given under Note No. 2 of Notes forming part of Notes to Accounts given in this Annual Report.

The CDR will give critical support to your company to tide over the present difficult business environment. The decision of the banks to consider and approve CDR also reflects the faith these institutions have in the long term business model of the Company. Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

Directors:

In terms of Article 99 of the Articles of Association of the Company and Sections 149, 152 and other applicable provisions, if any of Companies Act, 2013, Mrs. Rajkumari Kanodia, Director, retires by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting.

During the year Sumit Dalmiya - Non Executive Independent Director w.e.f. 30th October, 2013 and Mr. Gourishankar Poddar - Chairman and Managing Director w.e.f. 18th March, 2014 resigned from the Board. The Board records its appreciation for the valuable contribution made by them during their tenure as Directors of the Company.

Mr. Prahlad Rai Jajodia who was appointed as an Additional Director (Non Executive Independent) w.e.f. 18th March, 2014 and Mr. Naval Babulal Kanodia who was appointed as an Additional Director (Executive Director) w.e.f. 28th March, 2014 holds office until the date of ensuing Annual General Meeting. The Company has received due notices in writing pursuant to Section 160 of Companies Act, 2013 along with a deposit of Rs. 100000 proposing their candidatures at the ensuing Annual General Meeting.

Mr. Suresh Gupta, Independent Director of the Company be re-appointment as Independent Director for a term of five years pursuant to Section 149 and 152 of the Companies Act, 2013 commencing from 30th September, 2014. The Company has received notice in writing pursuant to Section 160 of the

Companies Act, 2013 along with a deposit of Rs. 100000 proposing appointment of Mr. Suresh Gupta as Independent Director of the Company.

Brief resume of the Directors proposed to be appointed/ re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold Directorships and Memberships/Chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, is provided in the Corporate Governance Report forming part of the Annual Report.

Directors Responsibility Statement:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

(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 as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern basis''.

Auditors and Auditors Report:

M/s. K.M. Garg & Co., Chartered Accountants (Registration No. 120712W), who are Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their appointment / re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 (now read as Section 139 of Companies Act, 2013) and that they are not disqualified for such appointment/re-appointment within the meaning of Secti on 226 of the said Act (now read as Secti on 141 of Companies Act, 2013).

Auditors'' observation and Management''s response to Auditors'' observations-

The Directors refer to the Auditors'' observation in the Auditors'' Report and provide their explanation as under:

i) In respect of Note 2 of the Financial Statement regarding amount payable towards recompense:

The recompense payable is contingent on various factors including improved performance of the Company (Borrowers) and many other conditions, the outcome of which currently is materially uncertain and cannot be determine.

ii) In respect of Auditors'' observation in Financial Statements regarding certain default in repayment of dues to banks in respect of Term Loans, Letter of Credit, Working Capital Facilities, interest liabilities etc:

It is clarified that the delay arose on account of liquidity shortage, due to delay in timely realisation of certain receivables from the customers and prevailing uncertain economic conditions, negative margin which adversely impacted the sales volumes.

iii) In respect of Auditors observation in Financial Statements regarding cash losses incurred by the Company:

It is clarified that the cash losses were primarily attributable to the lower volumes due to prevailing uncertain economic conditions, lower absorption of fixed overheads, higher finance costs and lower sales volume.

Cost Auditor:

The Central Government had approved appointment of Mr. Jayant J. Paleja, Cost Accountant, Mumbai as Cost Auditor to conduct Cost Audit relating to the products manufactured by your Company for the financial year 2013-2014, the E-Form 23C for his appointment was filed on 28th June, 2013. Further the Company has also appointed him to conduct the Cost Audit for the financial year 2014-2015 as per Section 148 of Companies Act, 2013 and his remuneration has to be ratified at the ensuing Annual General Meeting.

Cost Audit Report:

Pursuant to Section 209 (1)(d), Section 233B(4) of the Companies Act, 1956 and Companies (Cost Audit Report) Rules, 2011, Cost Audit Report for the financial year ended 31st March, 2013 was submitted to the Central Government on 05th October, 2013. Particulars of Employees:

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Director''s Report. There were no employees who were in receipt of remuneration for which particulars of employees have to be disclosed pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

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

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided herein below: (A) Conservation of Energy:

The information in regard to power and fuel consumption and cost per unit of production is furnished in the prescribed form herein below:

B) Technology Absorption:

As in the past, the Company continues its efforts to improve quality of yarns as routine activities.

C) Foreign Exchange earnings and outgo:

The particulars regarding foreign exchange earnings and outgo are given in Note No. 37 and 39 Notes forming part of the Accounts. Corporate Governance:

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors'' adhere to the requirements set out by the Securities and Exchange Board of India, Corporate Governance practice and have implemented all the prescribed stipulations.

Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, forms part of the Annual Report. Certificate from the Auditor of the Company M/s. K.M. Garg & Co., Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Acknowledgement:

Your Directors'' would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives, Staff members and Workers of the Company.

For and on behalf of the Board of the Directors

SD/- Rajkumari Kanodia Place: Mumbai Non Executive Dated: 30th May, 2014 Chairperson & Director


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 20th Annual Report and the audited accounts for the year ended 31st March, 2013.

Financial Results: (Rs. in Lacs)

Partculars Current Year Previous Year 2012-2013 2011-2012

Net Sales and Other Income 71752.67 68816.84

Gross Proft before interest, 6533.39 5768.35

Depreciaton and Tax

Less: Interest 3386.23 2912.98

Depreciaton 2555.65 2395.49

Proft before Tax 591.51 459.88

Less: Provision for Current Tax 186.38 7.05

Provision for Deferred Tax 85.70 70.85

Tax Adjustment for earlier years (51.95) 0.00

Proft Afer Tax/ Proft for the Period 371.38 381.98

*Previous years'' fgures have been regrouped wherever ecessary to bring them in line with the current year''s representaton of fgures

Performance:

During the fnancial year, your Company recorded Net Sales and Other Income of Rs. 71752.67 Lacs as compared to Rs. 68816.84 Lacs of previous year. The Net Proft for the year was Rs. 371.38 Lacs as compared to previous year Rs. 381.98 Lacs. Cash proft increased to Rs. 2927.03 Lacs from Rs. 2777.47 Lacs of previous year.

Dividend:

Your Directors'' recommend dividend @ 15% on prorate basis on 15% Non Convertble Non Cumulatve Redeemable Preference Share of the Company.

However in order to strengthen the reserve of the Company, your Directors'' considers it prudent to plough back the profts and do not recommend any dividend on Equity Shares of the Company for the fnancial year 2012-2013.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, which also deals with the opportunites, challenges and the future outlook for the Company, as stpulated under Clause 49 of the Listng Agreement with the Stock Exchange of India, is presented in a separate secton forming part of the Annual Report.

Backward Integraton cum Expansion/Modernisaton:

The Company went for backward integraton to manufacture PET Chips (Textle Grade) by setng up Contnuous Polymerisaton Plant (CP). The trail run of the CP plant commenced from 28th January, 2013 and commercial producton of the CP Plant for manufacturing polyester chips has successfully commenced w.e.f. 01st July, 2013 and per day installed capacity of the plant is 421 tons.

To improve the proftability of the Company, the Company has undertaken expansion/modernisaton for POY Plant during the fnancial year 2013-2014. The cost of the project is Rs. 62.64 crores with debt component of Rs. 45.00 crores which has been ted up with the existng Banks.

Sub Division of face value of Equity Shares and reclassifcaton of Share Capital:

During the year under review, the face value of Equity Shares of the Company were sub divided from Rs. 10/- to Rs. 1/- each w.e.f. 05th March, 2013 and also further the share capital was reclassifed into Equity Shares and Preference Shares.

At present, the issued, subscribed and paid up share capital of the Company stands at Rs. 40,64,54,000/- comprising of 26,64,54,000 Equity Shares of Rs. 1/- each and 1,40,00,000 15% Non Convertble Non Cumulatve Redeemable Preference Shares of Rs. 10/- each.

Conversion of Warrants with convertble opton on preferental basis to selected persons (promoter, public and body corporate):

In the year 2010, the Company obtained consent of the members through Special Resoluton under Postal Ballot for issuing convertble warrants and alloted 1,03,90,000 convertble warrants on 03rd January, 2011 with an opton to convert them into an equal number of Equity Shares of Rs.10/- each of the Company over a period of eighteen months on preferental basis to selected persons (promoter, public and body corporate) at a price of Rs. 17/- (including premium of Rs. 7/- each) per warrant afer receiving 25% of upfront money amountng to Rs. 4,41,57,500. In the previous year, on 10th January,2012 frst tranche conversion opton was exercised by Raj Money Market Limited (Promoter Company) for conversion of 8,90,000 warrants into Equity Shares and Rs.1,13,47,500 was received in respect of the conversion. These shares are under lock-in for a period of three (3) years from the date of allotment i.e. from 10th January, 2012 to 09th January, 2015.

On 31st March, 2012 second tranche conversion opton was exercised for 54,78,500 warrants into Equity Shares and Rs.6,98,50,875 was received in respect of the conversion. Out of the said conversion 2,78,500 Equity Shares alloted to Raj Money Market Limited (Promoter Company) are under lock–in period of three (3) years from the date of allotment i.e. from 31st March, 2012 to 30th March, 2015 and 52,00,000 Equity Shares alloted to Non promoter group (public) were under lock –in period of one (1) year from the date of allotment i.e. 31st March, 2012 to 30th March, 2013.

During the year, on 30th June, 2012, third tranche conversion opton was exercised by Raj Money Market Limited (Promoter Company) for conversion of 13,32,200 warrants into Equity Shares and Rs.1,69,85,550 was received in respect of the conversion. These shares are under lock-in for a period of three (3) years from the date of allotment i.e. from 30th June, 2012 to 29th June, 2015.

Further during the period under review, the Company forfeited 26,89,300 outstanding Warrants allotted to the Promoter and Non Promoter group entities which were not converted into Equity Shares. The application amount of Rs. 1,14,29,525/- paid on these warrants have been forfeited and transferred to capital reserves.

Issue of 15% Non Convertible Non Cumulative Redeemable Preference Shares:

During the year on 25th February, 2013, the Company allotted 1,40,00,000 15% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10/- each at a premium of Rs. 20/- each to "NAKODA LIMITED" (belonging to Non Promoter category) on preferential basis as per Section 80, 81 and 81(1A) and other applicable provisions of Companies Act, 1956. Approval of members for the said issue was received in an Extra Ordinary General Meeting held on 11th February, 2013. Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

Directors:

In terms of Article 99 of the Articles of Association of the Company, Mrs. Rajkumari Kanodia, Director, retires by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting.

During the year two Non Executive Independent Directors have resigned from the Board of Directors i.e. Mr. Jagdish Chandra Somani w.e.f. 06th November, 2012 and Mr. Vinod Kumar Jain w.e.f. 05th March, 2013. The Board records its appreciation for the valuable contribution made by them during their tenure as Directors of the Company.

Mr. Sumit Dalmiya who was appointed as an Additional Director (Non Executive Independent) w.e.f. 06th November, 2012, and Mr. Suresh Gupta who was appointed as an Additional Director (Non Executive Independent) w.e.f. 27th May, 2013 holds office until the date of ensuing Annual General Meeting. Notice proposing their candidatures at the ensuing General Meeting has been received by the Company.

Brief resume of the Directors proposed to be appointed/re- appointed, nature of their expertise in specific functional areas and names of companies in which they holds directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, is provided in the Corporate Governance Report forming part of the Annual Report. Directors Responsibility Statement:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

(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 as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern basis''.

Auditors and Auditors Report:

The Members of the Company in their Extraordinary General Meeting held on 06th July, 2013 has appointed M/s. K.M. Garg & Co., Chartered Accountants (Registration No. 120712W), as Statutory Auditor of the Company to fill the casual vacancy caused due to resignation of M/s. R. S. Agrawal & Associates, Chartered Accountants, Mumbai.

M/s. K.M. Garg & Co., Chartered Accountants (Registration No. 120712W), who are Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their appointment / re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment/re-appointment within the meaning of Section 226 of the said Act.

The Notes on Accounts referred to in the Auditors'' Report are self- explanatory and therefore does not call for any further comments except a non provision for doubtful debts amounting to Rs. 88.61 lacs where your Directors are confident that the money will be recovered, for which Company has filed legal suits and therefore no provisions at present is required to be made in the financial statements.

Cost Auditor:

The Central Government had approved appointment of Mr. Jayant J. Paleja, Cost Accountant, Mumbai as Cost Auditor to conduct Cost Audit relating to the products manufactured by your Company for the financial year 2012-2013, the E-Form 23C for their appointment was filed on 25th June, 2012. Further the Company has also appointed him to conduct the Cost Audit for the financial year 2013-2014.

Partculars of Employees:

In terms of the provisions of Secton 217 (2A) of the Companies Act, 1956, read with the Companies (Partculars of Employees) Rules, 1975 as amended, the names and other partculars of the employees are required to be set out in the Annexure to the Director''s Report. There were no employees who were in receipt of remuneraton for which partculars of employees have to be disclosed pursuant to Secton 217(2A) of the Companies Act, 1956 read with the Companies (Partculars of Employees) Rules, 1975.

Energy Conservaton, Technology Absorpton and Foreign Exchange Earnings and Outgo:

The partculars relatng to energy conservaton, technology absorpton, foreign exchange earnings and outgo, as required to be disclosed under Secton 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Partculars in the Report of Board of Directors) Rules, 1988, are provided herein below:

B) Technology Absorpton:

As in the past, the Company contnues its eforts to improve quality of yarns as routne actvites.

C) Foreign Exchange earning and outgo:

The partculars regarding foreign exchange earnings and outgo are given in Note No. 37 and 40 Notes forming part of the Accounts.

Corporate Governance:

Your Company is commited to maintain the highest standards of Corporate Governance. Your Directors'' adhere to the requirements set out by the Securites and Exchange Board of India, Corporate Governance practce and have implemented all the prescribed stpulatons.

Report on Corporate Governance, as stpulated under Clause 49 of the Listng Agreements with the Stock Exchanges in India, forms part of the Annual Report. Certfcate from the Auditor of the Company M/s. K.M. Garg & Co., Chartered Accountants confrming compliance of conditons of Corporate Governance as stpulated under the aforesaid Clause 49 is annexed to this Report.

Acknowledgement:

Your Directors'' would like to express their grateful appreciaton for assistance and co-operaton received from the Banks, Government Authorites, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciaton for the commited services of the Executves, Staf members and Workers of the Company.

For and on behalf of the Board of the Directors

SD/-

Place: Mumbai Gourishankar Poddar

Dated: 31st July, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to present the 19th Annual Report and the audited accounts for the year ended 31st March, 2012.

Financial Results: (Rs. in Lacs)

Particulars Current Year Previous Year 2011-2012 2010-2011

Net Sales and Other Income 68816.84 43361.55

Gross Profit before interest, Depreciation and Tax 5768.35 4646.14

Less: Interest 2905.83 1911.74

Depreciation 2395.49 2051.24

Profit before Tax 467.03 683.16

Less: Provision for Current Tax 14.20 25.05

Provision for Deferred Tax 70.85 251.73

Tax Adjustment for earlier years 0.00 0.45

Profit After Tax/ Profit for the Period 381.98 405.93

*Previous years' figures have been regrouped wherever necessary to bring them in line with the current year's representation of figures

Performance:

During the financial year, your Company recorded Net Sales and Other Income of Rs. 68816.84 Lacs as compared to Rs. 43361.55 Lacs of previous year. The Net Profit for the year was Rs. 381.98 Lacs as compared to previous year Rs. 405.93 Lacs. Cash profit increased to Rs. 2777.47 Lacs from Rs. 2457.17 Lacs of previous year.

Dividend:

In order to strengthen the reserve of the Company, your Director's considers it prudent to plough back the profits and not to recommend any dividend for the financial year 2011-2012.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, which also deals with the opportunities, challenges and the future outlook for the Company, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange of India, is presented in a separate section forming part of the Annual Report.

Expansion Plans: C.P. Project (Backward Integration) at Surangi, Silvassa (U.T.):

With a view to enhancing its operating margin and shore up its profitability, the Company is going in for backward integration to manufacture Fibre grade/Textile Polyester chips/Polymer by setting up Continuous Polymerisation Plant (CP). The execution of the project is in the advance stage and expected to commence its commercial production as slated on or before June, 2013.

Capital:

During the year under review, the authorised share capital of the Company was increased from Rs. 30.00 crores to Rs. 50.00 crores to enable the Company to meet the future additional capital requirements.

Conversion of Warrants with convertible option on preferential basis to selected persons (promoter, public and body corporate):

In the year 2010, the Company obtained consent of the members through Special Resolution under Postal Ballot for issuing convertible warrants and allotted 1,03,90,000 convertible warrants on 03rd January, 2011 with an option to convert them into an equal number of Equity Shares of Rs. 10/- each of the Company over a period of eighteen months on preferential basis to selected persons (promoter, public and body corporate) at a price of Rs. 17/- (including premium of Rs. 7/- each) per warrant after receiving 25% of upfront money amounting to Rs. 4,41,57,500. During the year, on 10th January, 2012 first tranche conversion option was exercised by Raj Money Market Limited (Promoter Company) for conversion of 8,90,000 warrants into Equity Shares of the Company and Rs. 1,13,47,500 was received in respect of the conversion. These shares are under lock-in for a period of three (3) years from the date of allotment i.e. from 10th January, 2012 to 09th January, 2015.

Further during the year, on 31st March, 2012 second tranche conversion option was exercised for conversion of 54,78,500 warrants into Equity Shares of the Company and Rs. 6,98,50,875 was received in respect of the conversion. Out of the above 2,78,500 Equity Shares allotted to Raj Money Market Limited (Promoter Company) are under lock-in period of three (3) years from the date of allotment i.e. from 31st March, 2012 to 30th March, 2015 and 52,00,000 Equity Shares allotted to Non promoter group (public) are under lock-in period of one (1) year from the date of allotment i.e. 31st March, 2012 to 30th March, 2013.

Following exercise of the aforementioned options, there are now 40,21,500 convertible warrants that can be converted into Equity Shares of Rs. 17/- (including premium of Rs. 7/- each) at the option of the allottees upto 02nd July, 2012.

Change of Registered Office of the Company:

Your Company's registered office address has been changed from "Survey No. 177/1/3 & 177/1/4, Village-Surangi, Dist-Silvassa, Dadra & .Nagar Haveli (U.T.)-396 230" to "Survey No. 177/1/3, Village-Surangi, Dist-Silvassa, Dadra & Nagar Haveli (U.T.)-396 230"w.e.f. 20th June, 2011.

Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

Directors:

In terms of Article 99 of the Articles of Association of the Company, Mrs. Rajkumari Kanodia, Director, retires by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting. Brief resume of the Director proposed to be appointed/re-appointed, nature of his expertise in specific functional areas and names of companies in which he holds directorships and memberships/ chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges in India, is provided in the Corporate Governance Report forming part of the Annual Report.

Directors Responsibility Statement:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

(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 as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern basis'.

Auditors and Auditors Report:

M/s R.S. Agrawal & Associates, Chartered Accountants (Registration No. 100156W), who are Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their appointment /re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment/re- appointment within the meaning of Section 226 of the said Act. The Notes on Accounts referred to in the Auditors' Report are self- explanatory and therefore does not call for any further comments except a non provision for doubtful debts amounting to Rs. 88.61 lacs where your Directors are confident that the money will be recovered, for which Company has filed legal suits and therefore no provisions at present is required to be made in the financial statements.

Cost Auditor:

Your Company has appointed Mr. Jayant J. Paleja, Cost Accountant, Mumbai as Cost Auditors to conduct Cost Audit relating to the product manufactured by your Company for the Financial Year 2012-2013.

Particulars of Employees:

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Director's Report. There were no employees who were in receipt of remuneration for which particulars of employees have to be disclosed pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

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

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided herein below:

(A) Conservation of Energy:

The information in regard to power and fuel consumption and cost per unit of production is furnished in the prescribed form herein below:

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Particulars Units Current Year Previous Year

(a)Power & Fuel Consumption:

1. Electricity Purchased - Units KWH in lacs 896.36 852.96

Total Amount Rs.In Lacs 3719.10 2719.94

Average Rate Rs.Per Unit 4.15 3.19

2.Light Diesel Oil (LDO) /Furnace Oil (FO)

Quantity Kilo Litres 205.55 322.00

Total Cost Rs.In Lacs 77.83 88.34

Average Rate Rs.Per Litre 37.87 29.97

(b)Consumption per unit of Production:

1. Electricity (KWH) Yarn 100 Kgs 125.81 128.11

2. Light Diesel Oil (Litres) Yarn 100 Kgs 0.29 0.44

B) Technology Absorption:

As in the past, the Company continues its efforts to improve quality of yarns as routine activities.

C) Foreign Exchange earning and outgo:

The particulars regarding foreign exchange earnings and outgo are given in Note No. 36 and 39, Notes forming part of the Accounts.

Corporate Governance:

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors' adhere to the requirements set out by the Securities and Exchange Board of India, Corporate Governance practice and have implemented all the prescribed stipulations.

Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, forms part of the Annual Report. Certificate from the Auditor of the Company M/s R. S. Agrawal & Associates confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Acknowledgement:

Your Directors' would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives, Staff members and Workers of the Company.

For and on behalf of the Board of the Directors

Place: Mumbai Gourishankar Poddar

Dated: 30th May, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present the 17th Annual Report and the audited accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars Current Previous

Year Year

2009-2010 2008-2009

Net Sales and Other Income 33799.41 32012.60

Gross Profit before interest,

Depreciation and Tax 3354.08 1640.05

Less: Interest 1319.58 1432.59

Depreciation 1703.96 1702.40

Profit before Tax 330.54 (1494.94)

Less : Provision for Current Tax 10.14 5.96

Provision for Deferred

Tax 7.96 (445.92)

Profit After Tax 312.44 (1054.98)

Add:(Less) : Prior Period Items &

Adjustments 0.19 (0.75)

Add:(Less): b/f Balance in

Profit &

Loss Account 2215.08 3355.08

Add:(Less) : Income Tax

Adjustment

for earlier years (61.05) (84.27)

Amount Available for Appropriation 2466.66 2215.08

Appropriations:

Proposed Dividend on Equity Shares 53.99 NIL

Tax on Proposed Dividend 9.2 NIL

Balance carried to Balance Sheet 2403.47 2215.08

2466.66 2215.08

PERFORMANCE

During the financial year, your Company recorded Net Sales and Other Income of Rs. 33799.41 Lacs as compared to Rs. 32012.60 Lacs of previous year. The Net Profit for the year was 312.44 Lacs as compared to previous year (Rs.1054.98) Lacs. Cash profit increased to Rs. 2016.40 Lacs from Rs 647.42 Lacs of previous year.

DIVIDEND

Your Directors, subject to approval of Bankers, Financial Institutions and Shareholders, have recommend a dividend of Re. 0.30 per equity share for the financial year ended on 31st March, 2010.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, which also deals with the opportunities, challenges and the future outlook for the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming part of the Annual Report.

EXPANSION PLANS

The Company has commenced the commercial production from four (4) FDY (Fully drawn Yarn) lines from 25th March, 2010.

The Companys plans to expand the installed capacity for manufacturing Polyester Texturised Yarn (PTY), Fully Drawn Yarn (FDY) and to create new capacity for manufacturing Twisted Yarn (TY), different types of coloured yarns therefrom which command good demand and sales margin in the market. This would enable the Company to enhance its profitability of operations.

The Companys expansion project envisages creation of additional manufacturing capacity as under:

PTY( 75/36 SD denier) 21,000 MTA

TY (75/36 SD denier) 3,060 MTA

FDY(150/36 SD denier) 1,886 MTA The Company has approached its bankers for sanctioning of term loans to part finance the said expansion project. The Company has sold its Land & Building of Unit no. 3 and shifted its Plant & Machinery therefrom to Unit no. 4 (Surangi) to enhance its operating efficiency.

CONVERSION OF WARRANTS WITH CONVERTIBLE OPTION ON PREFERENTIAL BASIS TO A PROMOTER GROUP COMPANY

During last year, the Company obtained consent of the members through a Special Resolution under postal ballot for Conversion of 19,27,000 Warrants with convertible option into an equal number of equity shares of Rs. 10/- each over a period of 18 months on preferential basis to a Promoter Group Company named M/s. Raj Money Market Limited and allotted 81,500 equity shares on 20th March, 2009 on exercise of their option out of 19,27,000 warrants.

During the year, M/s. Raj Money Market Limited have exercised their option to convert 8,99,000 warrants out of the aforesaid 19,27,000 warrants. The Company at the Committee of Directors meeting held on 29th September, 2009 has allotted 8,99,000 Equity Shares of Rs. 10/- each.

Following exercise of the aforementioned options, there are now 9,46,500 warrants that can be converted into Equity Shares of Rs.10/- each of the Company at the option of the allottee up to 25th August, 2010.

POSTAL BALLOT EXERCISE

During the year ended 31st March, 2010, the Company sought the approval of its members by way of Postal Ballot in respect of the following Ordinary Resolution vide Notice dated 06th November, 2009. Mr. Bharat Pathak, Practicing Company Secretary was appointed as the Scrutinizer for the aforesaid Postal Ballot exercise and the results were declared on the 15th December, 2009.

(i) Ordinary Resolution under Section 293 (1) (a) of the Companies Act, 1956 for selling the Land & Building at Unit No. 3 of the Company and shifting the plant and machinery and other operational facilities at Unit No. 3 to the Surangi Unit of the Company.

The detail of the result of the postal ballot report is as under:

No. of Valid Postal No of Shares Postal No. of shares

Postal Ballot Forms held by the Ballot Forms held by the

Ballot Forms with members who with members who

Received Assent have cast their Dissent have cast their

votes in favour votes against

363 325 74,91,379 38 7,380

Resolution was passed with requisite majority

FIXED DEPOSITS

The Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

DIRECTORS

In terms of Article 99 of the Articles of Association of the Company, Mr. Vinod Kumar Jain, Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. Brief resume of the Director proposed to be appointed/reappointed, nature of his expertise in specific functional areas and names of companies in which he holds directorships and memberships/ chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchange in India, is provided in the Corporate Governance Report forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

(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 as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a going concern basis.

AUDITORS AND AUDITORS REPORT

M/s R.S. Agrawal & Associates, Chartered Accountants, who are Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them to the effect that their appointment /reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment/reappointment within the meaning of Section 226 of the said Act. The Notes on Accounts referred to in the Auditors Report are self-explanatory and therefore does not call for any further comments except a non provision for doubtful debts amounting to Rs. 93.54 lacs where your directors are confident that money will be recovered for which Company has filed legal suits and therefore no provisions at present is required to be made in the financial statements.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors Report. There were no employees who were in receipt of remuneration for which particulars of employees have to be disclosed pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided herein below:

TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO IEPF

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividends which remained unpaid/ unclaimed for a period of 7 years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the said Act. There is unclaimed dividend which is due for transfer to IEPF before 28th September, 2010 which the Company will transfer as and when the date comes.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the requirements set out by the Securities and Exchange Board of India, Corporate Governance practice and have implemented all the prescribed stipulations.

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India forms part of the Annual Report. Certificate from the Auditor of the Company M/s R. S. Agrawal & Associates confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives, Staff and Workers of the Company.



For and on behalf of the Board of the Directors



Place: Mumbai GOURISHANKAR PODDAR

Dated: 28th May, 2010 Chairman & Managing Director

 
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