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Directors Report of Reliance Chemotex Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 37th Annual Report on the business and operations of the Company and Audited Financial Statements for the Financial Year ended on 31st March, 2015.

FINANCIAL HIGHLIGHTS

The Company's financial performance for the year ended on 31st March, 2015 is summarised below:

Rs. in lacs

FINANCIAL YEAR

PARTICULARS 2014-15

Total Revenues (including other income) 25123.96

Profit before, Interest, Depreciation & 2733.62

amortization, and Tax

Less: Interest / Finance Cost 1256.51

Less: Depreciation & amortization 571.72

Profit before Tax 905.39

Less: Provision for Taxation

Current year 172.00

Earlier year Tax (35.51)

Deferred Tax 117.31

Wealth Tax 0.60 254.40

Profit after Tax 650.99

Add: Profit brought forward 1585.06 from previous year

Total Available surplus 2236.05

Ou t of which the following appropriations have been made

Transfe r to General Reserve 10.00

Propose d Dividend

Preferen ce Shares 206.83

Equity Shares 39.77 246.60

Tax on Proposed Dividend 50.20

Closing Balance in Statement of Profit and 1929.25 Loss

Rs. in lacs FINANCIAL YEAR

PARTICULARS 2013-14

Total Revenues (including other income) 25262.23

Profit before, Interest, Depreciation & 2583.64

amortization, and Tax

Less: Interest / Finance Cost 1076.32

Less: Depreciation & amortization 561.53

Profit before Tax 945.79

Less: Provision for Taxation

Current year 190.00

Earlier year Tax 6.03

Deferred Tax 183.47

Wealth Tax 0.35 379.85

Profit after Tax 565.94

Add: Profit brought forward 1297.59 from previous year

Total Available surplus 1863.53

Ou t of which the following appropriations have been made

Transfe r to General Reserve 10.00

Propose d Dividend

Preferen ce Shares 191.57

Equity Shares 37.87 229.44

Tax on Proposed Dividend 39.03

Closing Balance in Statement of Profit and 1585.06 Loss

RESULT OF OPERATIONS AND STATE OF COMPANYS AFFAIRS

The highlights of the Company's Performance are as under:

* Revenue from operations including other income decreased by 0.55% to Rs.25123.96 Lacs

* Exports decreased by 1.22% to Rs. 13578.69 Lacs.

* PBDIT increased by 5.80 % to Rs. 2733.61 Lacs.

* Cash Profit decreased by 1.99% to Rs. 1477.00 Lacs.

* Net Profit increased by 15.02% to Rs. 650.99 Lacs.

Net Revenue from operations, including other income for the year ended 31st March, 2015 was Rs 25123.96 Lacs as against Rs 25262.23 Lacs in the previous year. Though yarn production during the year was higher at 13349 Tons compared to 12525 Tons in the previous year. Net revenue including the other income was almost flat mainly as a result of decrease in the prices of polyester yarn due to decrease in prices of polyester fiber. Average price of polyester fiber during the year decreased to Rs. 91.76 per kg compared to Rs.101.76 per kg in the previous year.

Cost of goods sold as percentage of net revenue, including other income decreased to 53.73%as against 57.51% in the previous year. The decrease is on account of reduction in polyester fiber prices on the back of a significant drop in crude prices.

Employees cost as a percentage of net revenue including other income increased to 12.41% as against 10.05% in the previous year mainly on account of increase in DA, reduction in discounting rate which adversely impacted the provision for retirement benefits and recruitment of additional manpower for the capacity expansion undertaken during the year.

Other expenses as a percentage of net revenue including other income marginally increased to 22.97% as against 22.21% in the previous year mainly due to increased stores and spares consumption and higher selling expenses for exports.

Finance cost as a percentage of net revenue including other income increased to 5.00% as against 4.26% during the previous year mainly due to an additional term loan availed during the year for the expansion / modernization project.

DIVIDEND ON EQUITY SHARES

The Board of Directors has recommended a Dividend of 10% (i.e. Rs. 1.00/- per Share) on Equity Shares of Rs.10/- each as final Dividend. The Dividend, if approved by the Members at the Annual General Meeting will absorb a sum of Rs. 39.77Lacs and Rs. 8.09 Lacs by way of Dividend Distributions Tax thereon.

DIVIDEND ON PREFERENCE SHARES

The Board of Directors has recommended a Dividend of 10%(i.e. Rs. 10.00/- per Share) on Cumulative Redeemable Preference shares of Rs.100/- each. Dividend has to be paid as per the terms of the issue for the year, which will absorb a sum of Rs. 206.83 Lacs for such Dividend and Rs 42.11 Lacs by way of Dividend Distribution Tax thereon.

RESERVES

During the year under review, a sum of Rs. 10.00 Lacs has been transferred to General Reserve.

CURRENT OUTLOOK

Current outlook, industry structure & development along with opportunities and threats are discussed in detail in the Management Discussion & Analysis Report, which forms part of this report.

FINANCE

Your Company has been in strong financial health during the year under review. During the year, your Company has:

* Allotted 3,00,000 10% Cumulative Redeemable Preference Shares of Rs.100/- each on 17.01.2015 aggregating to Rs. 300.00 Lacs.

* Repaid Rs.959.63 Lacs of term loans to the Banks and Financial Institutions.

* Availed Corporate Loan of Rs 1000.00 Lacs from State Bank of India

Furthermore, during the year under review, RIICO & Exim Bank Ltd has disbursed term loan of Rs. 1200 Lacs &Rs. 1041.00 Lacs respectively for the expansion / modernization project. The Company's Bankers have provided a need-based working capital facility during the year.

EXPORTS

Exports have always been the main focus of your Company. The Company's exports have increased 14.06 % from 6344 metric tonnes to 7236 metric tonnes. However, in value terms exports decreased to Rs 13578.69 Lacs compared to Rs 13746.56 Lacs due to appreciation in value of INR against Euro.

RATINGS

ICRA has upgraded the rating on the bank facilities of the Company to "ICRA BBB from CRISIL BBB-/Stable/Crisill A3".

This upgrade in rating reflects an improvement in the Company's overall financial risk profile, particularly its liquidity, backed by stable accruals, continued fund support from promoters, and prudent financing. The Company's successful commissioning of its enhanced capacities along with a stable demand from its customers will ensure that it achieves an annual topline growth of about 10% over the medium term and improve its operating margin from 10% to 12-13 % over the years.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri N.G Khaitan, Non-Executive & Non Independent Director & Shri Rahul Shroff, Executive Director of the Company who retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

Smt. Dipika Shroff, who was appointed as an additional director in the board meeting held on 10th February, 2015 and holds office up to the date of ensuing Annual General Meeting, is proposed to be appointed as Director of Company at the ensuing Annual General Meeting. The Company has received necessary notice under Section 161(1) of Companies the Act, 2013 from a member proposing her appointment and the resolution for her appointment shall be placed at the Annual General Meeting for the approval of members

Information as required pursuant to clause 49 of listing agreement with the stock exchanges on the directors, including those retiring by rotation is provided in the report of corporate governance.

Your Directors recommend the said appointments /re- appointments as stated above.

During the year Shri V.B.L Mathur & Shri B.K Agarwal resigned from Directorship of the Company w.e.f 06th February,2015 and 31st March,2015 respectively. The Board places on record its gratitude for the services rendered for very long time by Shri V.B.L Mathur & Shri B.K Agarwal during their association with the Company. Shri Mahesh Kumar Gupta, CFO & CS, also resigned from the Company w.e.f 09th August, 2014.

During the year under review, the Company has appointed/ re- appointed following people as Key Managerial Personnel in the Meeting held on 09thAugust, 2014.

1. Shri Sanjiv Shroff as Managing Director

2. Shri Ravindra Kala as Chief Financial Officer

3. Shri Vimal Tank as Company Secretary

APPOINTMENT OF INDEPENDENT DIRECTORS / EXECUTIVE DIRECTORS AT LAST AGM

In compliance with the provision of Section 149 & 152 and schedule IV and other applicable provision, if any, of the Companies Act, 2013 read with (Appointment and Qualification of Directors) rules 2014, Shri Narayan Shroff, Shri V.B.L Mathur, Shri K.L Sonthalia, Shri Shanker Menon, Shri Ramadoss Srinivasn and Shri B.K Agarwal were appointed as Independent Directors at the 36th Annual General Meeting for a term of 5 year from 29.09.2014 to 28.09.2019.

At the aforesaid AGM, Shri Sanjiv Shroff, Managing Director of your Company was re-appointed for three years commencing from 01.09.2014 to 31.08.2017 & Shri R.N Sharma, Whole time Director was re-appointed for a term of three years from 29.09.2014 to 28.09.2017.

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

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

BOARD EVALUATION

Pursuant to Provision of the Companies Act, 2013 read with Rules issued there under and Clause 49 of Listing Agreement, the Board has carried out an annual evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Committees. The performance of Individual Directors, the Board and its various Committees were discussed in details. A structured questionnaire each for evaluation of the Board, its various Committees and individual director were prepared and recommended to the Board of Director by Nomination & Remuneration Committee for doing the required evaluation, after taking into consideration the input received from directors covering, various aspect of the Boards function such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance etc.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company. A Performance evaluation of Independent Directors was carried out by the entire board. A Performance evaluation of the Chairman and non-independent directors was also carried out by the Meeting of Independent Directors separately.

NUMBER OF MEETING OF BOARD

The Board of Directors met six times during the year on 30.05.2014, 09.08.2014, 31.10.2014, 17.01.2015, 10.02.2015 and 30.03.2015. The frequency of and the quorum at these meetings were in conformity with the provisions of the Companies Act, 2013 and the Listing Agreement entered into by the Company with the Stock Exchanges. Attendance and other details are given in Corporate Governance Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

STATUTORY AUDITORS

M/s G.P. Kejriwal & Co. Chartered Accountants, Jaipur (Firm Registration Number: 001036C), were appointed as Statutory Auditor of the Company at the previous Annual General Meeting held on 29th September, 2014 till the conclusion of 39th Annual General Meeting, subject to ratification of their appointment in every Annual General Meeting. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained a written certificate from the above mentioned Auditors to the effect that they conform with the limits specified in the said Section and that they are not disqualified for appointment within the meaning of Section 141 of the said Act.

Ratification of appointment of Statutory Auditors is being sought from the shareholders of the Company at the ensuing AGM.

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

AUDITORS REPORT

The Auditor's Report for the F.Y. 2014-15 does not contain any qualification, reservation or adverse remarks.

COST AUDITORS

Cost Audit Report for the year 2013-14 was filed with the MCA on 26.09.2014 before due date. Due to applicability of New Companies Act, 2013 and Cost Audit Rules clarify that the Cost Audit for the year 2014-15 was not applicable on your Company but the Management has decided to conduct the Audit by M/s HMVN & Associates Cost Accountants, 31, Community Centre, Golden Palace, 2nd Floor, Ashok Vihar, Delhi-110052 for the year 2014-15 for their Internal Control.

M/s. HMVN & Associates,Cost Accountants, New Delhi has been appointed by the Board to conduct the Audit for the Financial Year 2015-16. As required under the Companies Act,2013 the remuneration payable to the Cost Auditors is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking member's ratification for remuneration payable to M/s. HMVN & Associates, Cost Accountant, New Delhi is included in the Notice of Annual General Meeting.

SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT

Pursuant to Provision of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, made there under, the Company has appointed M/s. V.M & Associates, Practicing Company Secretary, Jaipur to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure-2 and forms integral part of the Report.

The Secretarial Audit Report does not contain any qualification/ reservation & adverse remark.

The Board of Directors has re-appointed M/s. V.M & Associates, Practicing Company Secretary, Jaipur to conduct the Secretarial Audit for the Financial Year 2015-16.

INTERNAL AUDITORS

Pursuant to Provision of Section 138 of the Companies Act,2013 and Companies (Accounts) Rules, 2014 made thereunder, the Board of Directors in its meeting held on 08th August,2015 has re- appointed M/s. Rajeev Amitabh & Co, Chartered Accountant, New Delhi to conduct the Internal Audit of the Company for the Financial Year 2015-16.

FIXED DEPOSITS:

During the Financial Year 2014-15, your Company has not invited, accepted or renewed any deposits from the public within the meaning of Secti'on73 and 74 of the Companies Act., 2013 read together with The Companies (Acceptance of Deposit) Rules, 2014.

SHARE CAPITAL

During the year under review, the Company has allotted 3,00,000 No.s of 10% Cumulative Redeemable Preference Shares of Rs. 100/- on 17.01.2015 on private placement basis to augment long term funds and increase shareholders fund. After issue of above additional Preference Shares, issued preference capital increased to Rs. 2307.50 Lacs. During the Year the Company has extended the period of Redemption of 325000 10% Cumulative Redeemable Preference Shares of Rs. 100/- each up to 20 years. Present Capital Structure are as under.

Equity Share Capital : 399.48 Lacs

Preference Share Capital : 2307.50 Lacs

EXTRACT OF ANNUAL RETURN

The Extract of the Annual Return in Form MGT-9 containing details as on the financial year ended 31st March, 2015, as required under Section 92 (3) of the Companies Act, 2013, read with the Companies (Management and Administration) Rules 2014, is included in the Report as an Annexure-7.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitment affecting the financial position of the Company between the end of the financial year as on 31st March,2015 of the Company to which the financial statements related and date of this report (August 08, 2015).

SIGNIFICANT MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There were no significant and material orders passed by the regulators, courts or tribunals which would impact the going concern status of the Company.

SUBSIDIARY COMPANY

The Company has no Subsidiaries as on 31st March, 2015.

LOANS, GUARANTEES & INVESTMENTS BY THE COMPANY

Details of Loans, Guarantees, and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the Note No. 12 of the Financial Statement.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has put in place an adequate system of internal control commensurate with its size and nature of business to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the Company checks and verifies the internal control and monitors them in accordance with the policy adopted by the Company. Your Company is implementing ERP system to have better internal control.

REPORT ON CORPORATE GOVERNANCE

A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange form a part of the Annual Report are given in Annexure-8 .

VIGIL MECHANISM /WHISTLE BLOWER POLICY

Your Company is committed to highest standard of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Policy provides a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. The policy is to promote ethical behavior in all its business activities and to report concerns and unethical behavior, actual or suspected fraud or violation of our code of conduct and ethics. Under the said Mechanism, the employees are free to report violations of applicable laws and regulations and the Code of Conduct. It also provides for adequate safeguards against the victimization of persons who use such mechanism. The Vigil Mechanism/Whistle Blower Policy has been posted on the Company's website www.reliancechemotex.com.

The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time.

Your Company here affirm that no director/employee has been denied accessed to the Chairman of the Audit Committee and that no compliant were received during the year. Brief details about the policy are given in the Corporate Governance Report.

NOMINATION & REMUNERATION POLICY

The Board of Directors has framed the policy on Nomination & Remuneration which lays down the framework in relation to remuneration of directors, Key Managerial Person and Senior Management of the Company. This policy also lays down the criteria for selection and appointment of Board Members. The Nomination & Remuneration policy has been posted on the Company's website www.reliancechemotex.com and also annexed with the report in Annexure-6.

Remuneration Committees was renamed as "Nomination & Remuneration Committee in the Meeting of Board of Directors held on 30th May, 2014. Further the Board of Directors also approved the Policy on Nomination & Remuneration in the Meeting held on 09th August, 2014. Further the said Committee was reconstituted in the Board Meeting held on 10th February, 2015 with the following person namely Shri K.L Sonthalia, Shri Shanker Menon and Shri Ramadoss Srinivasan.The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, KMP & Senior Executive of the Company including criteria for determining qualification, positive attributes and independence of directors and other related matter has been provided in the Corporate Governance Report.

RELATED PARTY TRANSACTION

The Company has framed the policy on related party transactions and the Audit Committee shall review the related party transactions in every meeting. As reviewed by the Audit Committee there are no material related party transactions during the year. Audit Committee in the Meeting held on 30th May, 2014 has sanctioned the omnibus approval of various transaction with related party for one year. Although during the year the Company has approved the Lease/ Leave Agreement with Indo Textile & Fibers Ltd, A.S Chemotex Private Limited, A.R Commercial Private Limited & Spell Fashions Private Limited from 01.04.2014 and obtained the shareholders' approval in the Annual General Meeting held on 29.09.2014. The disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is given in AOC -2 as given in Annexure-3. The policy on related party transactions are posted on companies website www.reliancechemotex.com

DISCLOSURE UNDER THE SEXUAL HARRASAMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has always believed in providing a safe and harassment free workplace for every individual through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15.

No. of No. of S. No. complaints complaints received disposed off

1 NIL N.A.

The Company Framed a Policy on Sexual Harassment of Women at the Workplace and also the committee has been constituted namely to redress the compliant received regarding sexual harassment. There is no complaint received during the year.

COMPOSITION OF AUDIT COMMITTEE

As per the requirement of Clause 49 of the Listing Agreements with Stock Exchange and in compliance of Section 177 of Companies Act, 2013, the Company had re- constituted the Audit Committee in the board meeting held on 10th February, 2015 comprising the following Directors

1. Shri K.L.Sonthalia - Chairman

2. Shri N.G.Khaitan - Member

3. Shri Shankar Menon - Member

4. Shri Ramadoss Srinivasn - Member

Shri K.L Sonthalia is the Chairman of the Audit Committee.

The composition, role, functions and powers of the 'Audit Committee' are in accordance with Clause 49 of the Listing Agreement with Stock Exchange and Section 177(1) of the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

In terms of requirements of Section 135 of the Companies Act, 2013 and rules issued there under, the Board of Directors of your Company has constituted a CSR Committee comprising of Shri K.L Sonthalia, Shri R.N Sharma, Shri Rahul Shroff as members of the committee. This Committee is responsible for formulating, implementing and monitoring the CSR Policy of the Company. During the year, on the recommendation of CSR Committee, the Board of Directors has given the aid of Rs. 13,38,000/- towards Prime Minister National Relief Fund. The Report on CSR Activities required under the Companies Act, 2013 are set out in the Annexure- 4.

RISK MANAGEMENT

Your Company has framed the Risk Management Policy and has constituted a Committee on Risk Management. The Committee closely monitors all risks that could have a negative effect on the Company. The Risk Management Committee comprised of Shri Rahul Shroff, Shri Sanjiv Shroff, Shri Ameya Shroff & Shri R.N Sharma, and was also attended by the CFO and the Company Secretary. Risk which has reviewed by the Risk Management Committee are Financial Risk, Compliance Risk, Hazardous Risk, and Employee Related Risk.

Although the Company has long been following the principle of risk minimization as is the norm in every industry, it has now become compulsion. Therefore, in accordance with clause 49 of the listing agreement the Board members were informed of risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a proactive approach to reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

PARTICULARS OF EMPLOYEES & THEIR DISCLOSURES:

The information required pursuant to Section 197 (12) read with rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure- 5.

A detailed discussion on human resources & industrial relations is made in the "Management Discussion & Analysis Report" which forms a part of this report. The Board places on record their appreciation for the effort and contribution made by each employee and for each employee's continued high level of performance.

There are no employees of the Company in receipt of remuneration of Rs. 5.00 Lacs Per Month or more as required to be furnished under Section 197 (12) of the Companies Act, 2013 and rules made there under, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014.

MANAGERIAL REMUNERATION

The detail of Managerial Remuneration are given elsewhere in Corporate Governance Report as forming part of Board's Report.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO.

The statement pursuant to Section 134 (3)(m) of The Companies Act, 2013 read with the Rule 8(3) of The Companies (Accounts) Rules,2014 regarding particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act is given in Annexure- 1.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement Board of Directors hereby state and confirm that:

(i) In the preparation of the annual accounts for the year ended March 31st, 2015 the applicable accounting standards and schedule III of the Companies Act, 2013 had been followed and there are no material departures from the same;

(ii) Appropriate accounting policies have been selected and these have been applied consistently and that the judgements and estimates that have been made are reasonable and prudent so as to provide a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 to safeguard the assets of the Company and to prevent or detect fraud and other irregularities;

(iv) The annual accounts for the year ended 31st March, 2015 have been prepared on a going concern basis;

(v) Robust and detailed Internal Financial Controls to be followed by the Company have been laid down. These controls are adequate and were operating effectively;

(vi) Appropriate system have been devised to ensure that your Company is compliant with all applicable provisions and statutory requirements. These systems were adequate and operating effectively.

ACKNOWLEDGMENT

The Directors express their grateful appreciation for the co- operation and continued assistance received from Financial Institutions, Banks, Government Authorities, Shareholders, Suppliers and Esteemed Customers. The Directors also wish to place on record the appreciation for the services rendered by the Employees of the Company.

FOR AND ON BEHALF OF BOARD OF DIRECTORS FOR RELIANCE CHEMOTEX INDUSTRIES LIMITED

Place: Mumbai (Sanjiv Shroff) (Rahul Shroff) Date: 08th August, 2015 DIN: 00296008 DIN : 02301693


Mar 31, 2014

Dear Shareholders,

The Directors have the pleasure of placing before you the THIRTY SIXTH Annual Report along with the Audited Accounts of the Company for the year ended 31st March 2014.

Rs. in Lacs

FINANCIAL RESULTS Year ended Year ended 31.03.2014 31.03.2013

Profit before Depreciation & amortisation, exceptional items and Tax 1564.61 1278.41

Less: Depreciation & amortisation 561.53 470.27

1003.08 808.14

Less: Exceptional item 57.28 37.92

Profit before Tax 945.80 770.22

Less: Provision for Taxation

Currentyear 190.00 154.00

Earlieryear Tax 6.03 4.45

DeferredTax 183.47 8.16

WealthTax 0.36 379.86 0.14 166.75

Profit after Tax 565.94 603.47

Add: Profit brought forward 1297.59 901.55 from previous year

1863.53 1505.02

Out of which the following appropriations have been made Transfer to General Reserve 10.00 10.00

Interim / Proposed Dividend

Preference Shares 191.57 132.71

Equity Shares 37.87 229.44 36.07 168.78

Tax on Interim / Proposed Dividend 39.04 28.65

Leaving a balance of to be carried forward 1585.05 1297.59

1863.53 1505.02

INTERIM DIVIDEND ON EQUITY SHARES

Your Directors have declared an Interim Dividend of 7.50% on Equity Shares i.e. Rs. 0.75 per share of Rs. 10/- each at their Board Meeting held on 08.02.2014 which has already been distributed among the Shareholders of the Company. It has absorbed a Sum of Rs. 28.40 Lacs and Rs. 4.83 Lacs by way of Dividend Distribution Tax for therein.

FINALDIVIDENDONEQUITYSHARES

Your Directors propose a Dividend of 2.5% on Equity Shares i.e. Rs.0.25 perShare of Rs.10/- each as final Dividend. The Dividend, if approved by the Members at the Annual General Meeting, will absorb a sum of Rs. 9.47 Lacs and Rs. 1.61 Lacs by way of Dividend Distributions Tax thereon.

INTERIM DIVIDEND ON PREFERENCE SHARES

Your Directors have also declared an Interim Dividend of 7.50% on 10% Cumulative Redeemable Preference Shares i.e. Rs. 7.50 per share of Rs. 100/- each amounting to Rs. 143.06 Lacs and Rs. 24.31 Lacs as DividendTaxwhich hasalso been distributed.

FINAL DIVIDEND ON PREFERENCE SHARES

The remaining Dividend @ 2.50% on 10% Cumulative Redeemable Preference shares of Rs.100/- each has to be paid as per the terms of the issue for the year, which will absorb a sum of Rs. 48.51 Lacs for such Dividend and Rs. 8.24 Lacs by way of Dividend DistributionTaxthereon.

OPERATIONS

The company has performed strongly in the past financial year despite many economic challenges on both the global and domestic front. The company has achieved its highest ever turnover on the back of continues modernisation, innovative product development and steady expansion. Over this past financial year, the company has continued to focus on enhancing its economies of scale, increasing productivity, reducing costs, shrinking delivery schedules, investing in research and development of new products and aggressively pursuing opportunities in new markets. The company has increased its yarn production, which has resulted in an increase in its revenue, cash profit and profit before depreciation, interest and taxes.

The highlights of the company''s performance are shown below:

The Yarn Production has increased by 22.25% to 12,525 metric tonnes.

The Revenue from operations has increased by 20.94% to Rs. 25,552.78 Lacs.

The Cash Profit has increased by 21.51% to Rs. 1,507.33 Lacs.

The Profit before Depreciation, Interest and Taxes has increased by 16.94% to Rs. 2,021.01 Lacs.

The Net Profit has decreased by 6.22% to Rs. 565.94 Lacs.

This decrease in net profit is due to the payment of MAT. We can expect a MAT credit of Rs. 76.00 lacs in the upcoming years.

EXPORTS

Exports have always been the focus of the company. The company''s exports (FOB) in the last financial year were Rs. 13,261 Lacs as against Rs. 11,591 Lacs in the previousyear. This constitutes a 14.41% increase in the value of the company''s exports.

CURRENT OUTLOOK

Current outlook, industry structure & development along with opportunities and threats are discussed in detail in the Management Discussion & Analysis Report, which forms part of this report.

FINANCE

During the year under review the Company has repaid Rs. 945.19 Lacs of term loans to the Financial Institutions. Disbursement totaling of Rs. 410.32 Lacs was also received from RIICO against sanctioned term loan of Rs. 10 Crores. The Company''s bankers have provided need-based working capital limits during the year.

RATINGS

CRISIL has upgraded its rating on the bank facilities of the Company to "CRISIL BBB-/Stable/crisil A3" from "CRISIL BB /Stable/CRISILA4 ''.

This upgrade reflects an improvement in the Company''s overall financial risk profile, particularly its liquidity, backed by stable accruals, continued fund supportfrom promoters, and prudent financing. The Company''s successful commissioning of its enhanced capacities alongwith a stable demand from its customers will ensure that it achieves and annual topline growth of about 10% over the medium term and sustains its operating margin at 9 to 10 per cent.

FIXED DEPOSITS

The Company has not accepted any deposits during the year under review as per definitions stated in Section 58A of the Companies Act., 1956.

EXPANSION & MORDENISATION OF PLANT

In keeping with its philosophy of continuous modernisation, strict quality control and innovation the company has embarked on the expansion and modernisation of its existing plan situated in Village: Kanpur, Udaipur (Raj.) in the year under review. This project has an estimated cost of Rs. 34.70 Crores and focused on the installation of an additional 4800 Spindles and the modernisation of machines. The expansion will make the existing production plant more balanced. It will increase product flexibility and versatility, reduce delivery time, increase productivity and will allow the company to better service its customers. The company envisages that this expansion cum modernisation of machines will be completed by March 2015.

SHARE CAPITAL

During the past financial year, the Company has increased its Authorised Preference Share Capital by adding 5 Lacs Shares of Rs. 100/- each. The company has also allotted 1,90,000 Equity Shares of Rs.10/- each and 1,00,000 Preference Shares of Rs. 100/- each to its promoter group company on private placement basis. Subsequently the present issued EquityShare Capital is Rs. 4.02 Crores as against 3.83 Crores and Preference Share Capital is Rs.20.07 Crores as against Rs. 19.07 Crores of the Company in last year.

Listing Of Shares

Your Company''s shares are listed at BSE Ltd. and the listing fee for the year 2014-15 has been duly paid.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to the requirement of 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 for the year ended March 31,2014 the applicable accounting standards have been followed along with appropriate explanations relating to material departures. The notes to the accounts are self explanatory.

(ii) Appropriate accounting policies have been selected and these have been applied consistently and that the judgements and estimates that have been made are reasonable and prudent so as to provide a true and fair view of the state of affairs of the Company.

(iii) Proper and sufficient care has been taken for the maintance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 to safeguard the assets of the Company and to prevent or detect fraud and other irregularities;

(iv) The annual accounts for the year ended 31st March, 2014 have been prepared on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange form a part of theAnnual Report.

DIRECTORS

Shri R.N Sharma, Whole time Director of the company retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Shri Ramadoss Srinivasan, who was appointed as additional director in the board meeting held on 29th October, 2013 and holds office up to the date of ensuing annual general meeting is proposed to be appointed as Independent Director of Company at the ensuing Annual General Meeting. The Company has received necessary notice under Section 161(1) of Companies the Act, 2013 from a member proposing his appointment and the resolution for his appointment shall be placed at the annual general meeting for the approval of members

The Company has received requisite notices in writing from members proposing Shri V.B.L Mathur, Shri Shankar Menon, Shri B.K Agarwal, Shri K.L Sonthalia, and Shri Narayan Shroff, for appointmentas Independent Directors.

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

Information as required pursuant to Clause 49 of the Listing Agreement with the Stock Exchange on the Directors, including those retiring by rotation is provided in the Report on Corporate Governance.

Your Directors recommends the said appointments/re- appointments as stated above.

MANAGEMENT

The tenure of Shri Sanjiv Shroff, as Managing Director of the Company is expiring on 31st August, 2014. Based on the recommendation of the Nomination and Remuneration Committee the Board has decided to re-appoint Shri Sanjiv Shroff as Managing Director of the Company for a further period of 3Years, subject to approval of the Shareholders in the ensuing Annual General Meeting.

Shri R.N Sharma, Wholetime Director ofthe company who retire at the ensuing annual general meeti ng, shall offer himself for his re-appointment. Board had decided to re-appoint him as Wholetime Director of the company for a period of three years, subject to approval of the Shareholders in the ensuing Annual General Meeting.

SUBSIDIARY COMPANY

The Company has no Subsidiaries as on 31st March, 2014.

AUDIT COMMITTEE

As per the requirement of Clause 49 of the Listing Agreements with Stock Exchange and in compliance of 292(A) of Companies Act, 1956, the Company had constituted an Audit Committee comprisingthefollowing Directors:

1. Shri V.B.L.Mathur

2. Shri N.G.Khaitan

3. Shri K.L.Sonthalia

4. ShriShankarMenon

5. Shri RamadossSrinivasan

Shri V.B.L. Mathur is the Chairman of the Audit Committee.

The composition, role, functions and powers of the ''Audit Committee1 are in accordance with Clause 49 of the Listing Agreement with Stock Exchange and Section 177(1) of the Companies Act, 2013.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors of your Company has renamed and reconstituted its existing ''Remuneration Committee'' as ''Nomination and Remuneration Committee'' and have also revised its terms of reference to make it in line with the requirements of Section 178 of the Companies Act, 2013 and clause 49 of the listing agreement. At present, the ''Nomination and Remuneration Committee'' comprised of Mr. V.B.L Mathur, Mr. K.L Sonthalia, Mr. Shankar Menon and Mr. Ramadoss Srinivasan as members of the Committee. This Committee is entrusted with the power and responsibility by the Board of identifying and recommending to the Board appointment & removal of Directors, Key Managerial Personnel and Senior Management Personnel of the Company and to formulate and monitortheir Remuneration Policy.

Company Secretary ofthe Company acts as Secretary to all these Committee

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)

In terms of requirements of Section 135 of the Companies Act, 2013 and rules issued there under, the Board of Directors of your Company has constituted a CSR Committee comprising of Shri K.L Sonthalia, Shri R.N Sharma, Shri Rahul Shroff as members of the committee. This Committee is responsible for formulating and monitoring the CSR Policy ofthe Company.

PERSONNELS INDUSTRIAL RELATIONS

A detailed discussion on human resources & industrial relations is made in the "Management Discussion & Analysis Report" which forms a part of this report. The Board places on record their appreciation for the effort and contribution made by each employee and for each employee''s continued high level of performance.

There are no employees of the Company in receipt of a remuneration of Rs.5,00,000/- per month or more as, required to be furnished under section 217(12A) Companies Act, 1956 read with the Companies (Particulars of Employees Rules, 1975) asamended.

AUDITORS

STATUTORY AUDITORS

M/s G.P. Kejriwal & Co. Chartered Accountants, Jaipur, the retiring Auditors, offer themselves for re-appointment. The Company has received acceptance from the Auditors to the effect that their appointment, if made, would be within the prescribed limits under 141(3)(G) of the Companies Act, 2013.

Boards recommends their re-appointment for a period of three years from the conclusion of this AG M to the conclusion of the 39th AGM, for the financial year ending 2017 (subject to ratification ofthe appointment by the members at every AGM heldafterthisAGM)

AUDITORS REPORT

The observations of the Auditors'' together with the notes in Accounts they referred to in their report are self-explanatory and do not call for any further comments.

COST AUDITORS

Cost Audit Report for the year 2012-13 was filed with the MCA on 26.09.2013 before due date. The Cost Audit Report for the year 2013-14 shall become due for filling on 30th September 2014. This report is under process and will be filed before the due date.

The Company has re-appointed M/s HMVN & Associates, Cost Accountants, 31, Community Centre, Golden Palace, 2nd Floor, Ashok Vihar, Delhi-110052, as Cost Auditors of the Company for the financial year 2014-15 on such remuneration as may be determined by the Shareholders. Appointment so made would be in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice company hasobtainedtheSecretarialCompliance Report from M/s. V.M & Associates for the financial year ended on 31st March, 2014 as annexed with the annual report.

In the line with the requirement of section 204 of the Companies Act, 2013 and as recommended by Audit Committee, the Board of Directors of the Company has appointed M/s. V.M & Associates, Company Secretaries, to conduct secretarial audit on compliances of the Company for the financial year 2014-15.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUT GO.

The statement pursuant to Section 217(l)(e) of the Companies Act, 1956, read with Companies Act (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure ''1'' forming part of the report.

ACKNOWLEDGMENT

The Directors express their grateful appreciation for the co- operation and continued assistance received from Financial Institutions, Banks, Government Authorities, Shareholders, Suppliers and Esteemed Customers. The Directors also wish to place on record the appreciation forthe services rendered by the Employees of the Company.

On behalf of the Board

R.N.SHARMA SANJIV SHROFF

Place : Mumbai Wholetime Vice Chairman&

Dated :09/08/2014 Director Managing Director


Mar 31, 2012

The Directors have the pleasure of placing before you the THIRTY FOURTH Annual Report along with the Audited Accounts of the Company for the year ended 31st March 2012.

FINANCIAL RESULTS Year ended Year ended 31.03.2012 31.03.2011 (Rs. in lacs) (Rs. in lacs)

Profit before'Depreciation & amortisation, exceptional items and Tax 877.23 1084.85

Less: Depreciation & amortisation 469.88 458.88

407.35 625.97

Less: Exceptional item 114.01 113.17

Profit before Tax 293.34 512.80

Less : Provision for Taxation

Current Year 60.21 103.85

Deferred Tax 10.79 71.00 (29.44) 74.41

Profit alter tax 222.34 438.39

Add : Profit brought forward from previous year 882.80 593.20

1105.14 1031.59 Out of which the following appropriations have been made Transferto General Reserve 10.00 10.00

Proposed Dividend:

Preference Shares 130.80 83.11

Equity Shares 36.07 166.57 36.07 119.18

Tax on Proposed Dividend 27.02 19.61

Leaving a balance to be carried forward 901.55 882.80

1105.14 1031.59

DIVIDEND ON EQUITY SHARES

Your Directors propose to maintain a Dividend of 1fj% on Equity Shares i.e. Rs.1.00 per Share of Rs.10/- each. The Dividend, if approved by the Members at the Annual General Meeting, will absorb a sum of Rs. 36.07 Lacs and Rs. 5.85 Lacs by way of Dividend Distributions tax thereon.

DIVIDEND ON PREFERENCE SHARES

The Dividend @ 10% on Cumulative Redeemable Preference shares of;Rs,100/- each has to be paid;as per the terms of the issue for the year;: which will absorb a sum of Rs.130.50 Lacs for such Dividend and Rs.21.17 Lacs by way of Dividend Distribution Tax thereon.

OPERATIONS

During the year under review, your Company's operations suffered due to high prices of raw materials, higher interest cost and foreign exchange rate fluctuations. Your Company achieved a turnoverof Rs.20,432.77 Lacs as compared to - Rs.19,199.40 Lacs in the previous year, an increase of 6.42%.

EXPORTS

Exports (FOB) during the year were Rs.12,937 Lacs as against Rs. 12,599 Lacs in the previous year.

CURRENT OUTLOOK

Current outlook, industry structure & development along with Opportunities and threats are discussed in detail in the Management Discussion & Analysis Report, which forms part of this report.

FINANCE

During the year under review the Company has repaid Rs.628.88 Lacs of term loans to the Financial Institutions. The Term loan of Rs.10 Crores sanctioned by the State Bank of India in last year for Expansion & Modernization has been revised to Rs.13 Crores. The Company's bankers have provided need-based working capital limits during the year. FIXED DEPOSITS

The Company has not accepted any deposits during the year under review as per definitions stated in Section 58A of the Companies Act., 1956.

EXPANSION & MODERNIZATION OF PLANT During the year the Company has undertaken the expansion and modernization of its existing plant situated at Village : Kanpur, Udaipur (Raj.) at an estimated cost of Rs. 35 Crores for the installation of 10,080 Spindles and the Modernization of 5,184 Spindles. The new expansion is expected to come into Commercial^ Production by March, 2013. SHARE CAPITAL

There is no change in issued Equity and Preference Share Capital during the year. However, the Company has increased Authorised Preference Share Capital by adding 10 Lacs Preference Shares of Rs.100/- each. Subsequently the present Authorised Preference Share Capital of the Company is Rs. 25.25 Crores as against Rs. 15.25 Crores in last year. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 217(2AA) of the Gorrj(Sanies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that: (i) in,the preparation of the annual accounts for the year ended March 31, 2012 the applicable accounting standards have been followed along with proper explanation relating to material departures; The notes to the accounts are self explanatory. (it) 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. (iii) The Directors have taken proper and sufficient care to maintain an adequate accounting records in accordance With the provisions of the Companies Act, 1956 allowing them to safeguard the assets of the Company and to prevent or detect fraud and other irregularities; ' (iv) The Directors have prepared the annual accounts for the year ended 31st March, 2012 on a going concern basis. REPORT ON CORPORATE GOVERNANCE A separate Section on Corporate Governance and a certificate from Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause .49, of the Listing Agreement with Stock Exchange form apart of the Annual Report. DIRECTORS

Shri V.B.L. Mathur & Shri K. L. Sonthalia retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Information as required pursuant to Clause 49 of the Listing Agreement with the Stock Exchange on the Directors, including those retiring by rotation is provided in the Report on Corporate Governance.

Shri P. C. D. Nambiar, a Director of the Company since 1986, passed away on 27th May 2012. Shri P. C. D. Nambiar's guidance, support and commitment to the Company over the last 26 years had been invaluable. The Board of Directors would like' to extend their sincerest gratitude for Shri P. C. D. Nambiar's services to the Company and express their deepest condolences for his sad demise. His presence on the Board will be missed.

MANAGEMENT

The tenure of Shri R.N. Sharma, Wholetime Director of the Company is expiring on 31st October, 2012. Based on the recornmendation of the Remuneration Committee, the Board hasdecidedto re-appoint Shri R.N. Sharma as Wholetime Director of the Company for a period of 3 years, subject to approval of the Shareholders in the ensuing Annual GeneralMeettng. SUBSIDIARY COMPANY

The Company has no Subsidiary as on 31st March, 2012.

AUDIT COMMITTEE

As per the requirement of Clause 49 of the Listing Agreements With Stock Exchange and in compliance of Sec. 292(A) of Companies Act, 1956, the Company had constituted an Audit Committee comprising the following Directors :

1. Shri V. B. L. Mathur

2. Shri P. C. D. Nambiar

3. Shri N. G. Khaitan

4. Shri K. L Sonthalia

Shri V.BiL. Mathur is the Chairman of the Audit Committee. Out of the above-Directors Shri P.C.D. Nambiar passed away on 27lh May, 2012 and in his place a new Independent Director will be appointed shortly as an Audit Committee member. The composition, role, functions and powers of the 'Audit Committeeare in accordance with Clause 49 of the Listing Agreement with Stock Exchange and Section 292A of the Companies Act 1956. PERSONNEL & INDUSTRIAL RELATIONS A detailed discussion on human resources & industrial relations is made in the "Management Discussion & Analysis Report" which forms a part of this report. The Board places on record their appreciation for the effort and contribution made by each employee for a continued high level of performance. There are no employees of the Company in receipt of a remuneration of Rs.5,00,000/- per month or more as, required to be furnished under Section 217 (2A) of the Companies Act; 1956 read with the Companies {Particulars of Employees Rules, 1975) as amended. AUDITORS : STATUTORY AUDITORS

M/s G. P. Kejriwal & Co., Chartered Accountants, Jaipur, the retiring Auditors, offer themselves for re-appointment. The Company has received acceptance from the Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956. COST AUDITORS

Cost Audit Report for the year 2010-11 was filed with the ROG on 30/09/2011. The Cost Audit Report for the year 2011 - 12 shall become due for filing on 30th September, 2012. This report is under process and will be filed before the due date. M/s. HMVN & Associates, Cost Accountants, 31,

Community Centre, Golden Palace, 2nd Floor, Ashok Vihar, Delhi-110 052 have been appointed as Cost Auditors of the Company for the Financial Year 2012-13 subject to approval of the Central Government on such remuneration as may be determined by the Managing Director.

AUDITORS' REPORT

The observations of the Auditors' together with the notes in Accounts they referred to intheir report are self-explanatory.

However, in this regard we; have to state further as under:

i. The Company,is following the Mercantile System of Accounting on air items and recognises Income and Expenditure on accrual basis except for certain items as mentioned in note 1 (ix) in Notes 26 of the Annual Accounts due to the reasons mentioned there in. It is not possible now to quantify the effects on Profit/Loss A/C and assets arid liabilities of the Company for items referred to in notes. These will be accounted for in the year of settlement.

ii. As on 1st April, 2011 the Company had unsecured loans of Rs. 12.43 Crores. During the year 2011-12 the Company took new unsecured loans of Rs.25.68 Crores and also repaid a sum of Rs.25.23 Crores of these loans. Thereby there was a balance of Rs.12.88 Crores in unsecured loans A/C. Though there were no stipulations regarding the repayment of such unsecured loans, a part of such loans was repaid during the year as the parties demanded repay merit. For the year 2012- 13 as mentioned in note (1) (xvii) in Notes 26 of Annual Accounts, the Company has obtained letters of undertaking from these parties stating that they will not seek repayment of their outstanding loans before 30/04/13. Accordingly these unsecured loans have been considered as long term borrowings under the provisions of the revised Schedule VI of the Companies Act, 1956.

iii. There were slight delays in payment of certain dues towards works, contract Tax, TDS and ESI etc.

Though such delays were insignificant in nature, the concerned officers have been requested to ensure timely payments and deposits.

iv. As disputes are pending with various Authorities for Rs.2.41 Lacs on a/c of Excise Duty and Rs.45.22 Lacs on a/c of Service Tax, no payment for these dues have been made.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The statement pursuant to Section 217(1) (e) of the Companies Act, 1956, read with Companies Act (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure '1' forming part of the report.

ACKNOWLEDGMENT

The Directors express their grateful appreciation; for the co-operation and continued assistance received from Financial Institutions, Banks, Government Authorities, Shareholders,- Suppliers and Esteemed Customers. The Directors also wish to place on record the appreciation for the services rendered by the Employees of the Company.

On behalf of the Board

R. N. SHARMA SANJlV SHROFF

Place : Mumbai Wholetime Director Vice Chairman & 31st July, 2012 Managing Director


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in placing before you the THIRTY THIRD Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS Year ended Year ended 31.03.2011 31.03.2010

(Rs. in lacs) (Rs. in lacs)

Profit before Depreciation and Tax 971.72 749.01

Less: Depreciation for the year 458.88 429.90

512.84 319.11

Less: Provision for Taxation Current year 102.50 49.30

Deterred Tax (29.44) 91.17

Wealth Tax 0.18 73.24 0.14 140.61

439.60 178.50

LessAdd : Adjustment for taxation for earlier years (net) 1.34 3.47

Profit after tax 438.26 181.97

Add : Profit brought forward from previous year 593.20 557.55

1031.46 739.52

Out of which the following appropriations have been made Transfer to General Reserve 10.00 10.00

Proposed Dividend:

Preference Shares 83.11 80.45

Equity Shares 36.07 119.18 36.07 116.52

Tax on Proposed Dividend 19.48 19.80

Leaving a balance of to be carried forward' 882.80 593.20

1031.46 739.52

DIVIDEND ON EQUITY SHARES

Your Directors propose to maintain a Dividend of 10% on Equity Shares i.e. Rs.1.00 per Share of Rs. 10/- each. The Dividend, if approved by the Members at the Annual General Meeting, will absorb a sum of Rs. 36.07 Lacs for Dividend and Rs. 5.85 Lacs for Dividend Distributions tax thereon.

DIVIDEND ON PREFERENCE SHARES

The Dividend @ 10% on Cumulative Redeemable Preference shares of Rs. 100/- each has to be paid as per the terms of the issue for the year, which will absorb a sum of Rs.83.11 Lacs for such Dividend and Rs.13.64 Lacs for Dividend Distribution Tax there on.

The Company has redeemed 4,79,500 Preference Share during the year and has already paid Rs.39.80 Lacs as Interim Dividend on the said shares out of the above payable Dividend on Preference Shares.

OPERATIONS

During the year under review, your Company has achieved a turnover of Rs, 19,412.06 Lacs as compared to Rs.16,485.60 Lacs in the previous year reflecting an increase of 17.75%. The Company has produced 10,573 MT of yarn as compared to 10,380 MT produced in the previous year.

EXPORTS

Exports (FOB) during the year was Rs.13,010 Lacs as against 12,002 Lacs. Exports have increased by 8.40% as compared to previous year.

CURRENT OUTLOOK

Current outlook, industry structure & development along with opportunities and threats are discussed in detail in Management Discussion & Analysis Report, which forms part of this report.

FINANCE

During the year under review the Company has repaid Rs.558.50 Lacs of term loans to the Financial Institutions. The Company has been sanctioned a term loan of Rs. 1000.00 lacs each from RIICO & State Bank of India for expansion & modernization. The Company's bankers have provided the need based working capital limit during the year.

FIXED DEPOSITS

The Company has not accepted any deposits during the year under review within the meaning of Section 58A of the Companies Act., 1956.

EXPANSION & MORDENIZATION OF PLANT

During the year the Company has undertaken expansion and modernization of its existing plant situated at Village: Kanpur, Udaipur (Raj.) at an estimated cost of Rs. 30.00 Crores for installation 10,080 Spindles and modernization of 5,184 Spindles. It is expected to start the Commercial Production by April, 2012

SHARES CAPITAL

As per advice of the Bankers, the Company has redeemed 4,79,500 10% Cumulative Redeemable Preference Shares of Rs. 100/- each before maturity out of fresh 9,80,000 Shares issued during the year for a period of 20 years. Now the present issued Preference Shares Capital of the Company is Rs. 13.05 Crores against Rs. 8.04 Crores in last year.

CAPTIVE POWER SUPPLY

Power supply from Lignite based Captive Power Plant of 135 MW located at Bikaner in the State of Rajasthan, for which the Company has invested an amount of Rs. 2.26 Crores in Equity and Preference Shares of the said Company, has commenced with effect from July, 2010.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of 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 for the year ended March 31, 2011 the applicable accounting standards have been followed alongwith proper explanation relating to material departures and the notes to the accounts are self explanatory.

(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 on 31" March, 2011 and of the profit of the Company for the year ended on that.

(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;

(iv) That the Directors have prepared the annual accounts for the year ended 31stMarch, 2011 on agoing concern basis.

REPORT ON CORPORATE GOVERNANCE

A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange form part of the Annual Report.

DIRECTORS

Shri B.K.Jhawar and Shri P.C.D. Nambiar retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Information as required pursuant to Clause 49 of the Listing Agreement with the Stock Exchange on the Directors including those retiring by rotation is provided in the Report of Corporate Governance.

MANAGEMENT

The tenure of Shri Sanjiv Shroff as Managing Director of the Company is expiring on 31s'August, 2011. Based on the recommendation of the Remuneration Committee the Board has decided to re-appoint Shri Sanjiv Shroff as Managing Director of the Company for a further period of 3 years, subject to approval of the Shareholders in the ensuing Annual General Meeting.

SUBSIDIARY COMPANY

The Company has no Subsidiary as on 31s1 March, 2011.

AUDIT COMMITTEE

As per the requirement of Clause 49 of the Listing Agreements with Stock Exchange and in compliance of Sec.292 (A) of Companies Act, 1956, the Company had constituted an Audit Committee comprising the following Directors:

1. Shri V.B.L.Mathur

2. Shri P.C.D.Nambiar.

3. Shri N.G.Khaitan.

4. ShriK.LSonthalia

Shri V.B.L. Mathur is the Chairman of the Audit Committee.

The composition, role, functions and powers of the Audit Committee' are in accordance with Clause 49 of the Listing Agreements with Stock Exchange and Section 292A of the Companies Act, 1956.

PERSONNEL & INDUSTRIAL RELATIONS

The detailed discussion on human resources & industrial relations is made in "Management Discussion & Analysis Report" which forms part of this report. The Board places on record their appreciation for the efforts and contribution made by all the employees for continued high level of performance.

There are no employees of the Company who were in receipt of remuneration of Rs.5,00,000/- per month or more as required to be furnished under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees Rules, 1975) as amended.

AUDITORS

STATUTORY AUDITORS

M/s G.P. Kejriwal & Co. Chartered Accountants, Jaipur, the retiring Auditors, offer themselves for re-appointment. The Company has received acceptance from the Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956.

COST AUDITORS

Cost Audit Report for the year 2009-10 was filed with ROC on 25/09/2010. The Cost Audit Report for the year 2010-11 shall become due for filing on 30"" September, 2011. This report is under process and will be filed before due date.

M/s R.J. Goel & Co, Cost Accountant 31, Community Centre, Golden Palace, 2nd Floor, Ashok Vihar, Delhi-110 052 have been appointed as Cost Auditors of the Company for the financial year 2011-12 subject to approval of the Central Government, on such remuneration as may be determined by the Managing Director.

AUDITORS' REPORT

The observations of the Auditors' read together with the notes in Accounts referred to by them in their report are self-explanatory. However in this regard we have to state further as under:

1) The Company is following Mercantile System of Accounting on all items and recognises Income and Expenditure on accrual basis except for certain items as mentioned in schedule 23 note 1 (ix) of Annual Accounts due to the reasons mentioned there in. It is not possible now to quantify the results on Profit/Loss A/c and assets and liabilities of the Company for items referred to in schedule 23 note 1 (ix). These will be accounted for in the year of settlement.

2) The Managing Director has not signed the attached Balance Sheet, Profit and Loss Account along with schedules and the cash flow statement as he was not present within the territory of India at the relative time of the Board Meeting in which such accounts were approved. A statement for this is appended to Balance sheet and Profit and Loss account explaining the reasons for Managing Director not signing the Balance sheet as required under section 215 (2) of the Companies Act 1956.

3) Payment of Interim Dividend was made only on part of Redeemable Preference shares as mentioned in note no.7(XIV) in Schedule '23', which were redeemed during the year. Company is of the view that for payment of Interim Dividend permission of shareholders and Financial Institution was not necessary.

4) The Company has a system of writing off of Deferred Revenue Expenditure over a period of 5 years as the benefit will accrue over a period of such time. This year no deferred Revenue Expenditure has been incurred and such unamortised expenditure of Rs.9,39,587/- as on 31.03.2010 has been debited in this year. However all related details for Expenditure incurred are stated in note no 1(xii) in Schedule 23 of Annual Accounts.

5) There were slight delays in payment of certain dues towards Service Tax, Works Contract Tax and Dividend Tax. Though such delays were insignificant in nature, the concerned officers have been requested to ensure timely payments and deposits.

6) As disputes are pending with various Authorities for Rs.0.23 lacs on a/ c of Excise Duty, Rs.47.63 lacs on a/c of Service Tax, 0.90 lacs on a/ c of Rajasthan Sales Tax Act and Rs.721.68 lacs on a/c of Income Tax & FBT, no payment for these dues have been made.

7) During this year Turnover as per Profit & Loss Account and schedule '14' of Turnover includes Net Foreign Exchange Gain of Rs.3,21,00,165/- on a/c of Forward cover for export sale as stated in note no. 7(xiii) in Schedule 23 of Annual Accounts.. Management is of the view that this is not contrary to the Accounting Standard AS-11, as applicable and the provision of schedule VI (Part II) of the Companies Act, 1956.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO.

The statement pursuant to Section 217(1) (e) of the Companies Act, 1956, read with Companies Act (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure 1'forming part of the report.

ACKNOWLEDGMENT

Your Directors express their grateful appreciation of the co-operation and continued assistance received from the Financial Institutions, Banks, Government Authorities, Shareholders and Suppliers and Esteemed Customers. Your Directors also wish to place on record the appreciation of the services rendered by the Employees of the Company.

On behalf of the Board

R. N. SHARMA SANJIV SHROFF

Whole time Director Managing Director

Place: Mumbai

06th August, 2011


Mar 31, 2010

The Directors have pleasure In placing before you the THIRTY SECOND Annual Report together with the Audited Accounts of the Company for the year ended 31th march 2010.

FINACIAL RESOULTS (Letter not visibal)

DIVIDEND ON EQUITY SHARES

Your Directors propose to maintain a Dividend of 10% on Equity Shares the Rs.1.00 per Share of Rs.10/- each. The Dividend it approved by the to Members at the Annual General Meeting. will absorb a sum of Rs.36 07 Lacs for Dividend and Rs.6.13 Lacs for Divided Distributions tax thereon.

DIVIDEND ON PREFERENCE SHARES

The Dividend @ 10% on Cumulative Redemable Prefence shares in Rs.100/- each has to be paid as per the forms of the issue for the year, which will absorb a sum of Rs 1.80.45 Lacs for such Dividend and Rs 13.67 Lacs for Dividend Distribution Tax thereon.

OPERATIONS

During the year under review, your Company has achieved a turnover of Rs 16,485.60 Lacs as compared to Rs.12.562.41 Lacs in the previous, year reflecting an Incerase Of 31.23%. The Company has producedfo,380 MT Of year as compared to 7.562 MT produced in the previous year.

EXPORTS

Exports (FOB) during the year was Rs 12.002 Lacs as against 10.881 Lacs. Exports have Increased by of 30% as compared to previous year.

CURRENT OUTLOOK

Current outlook. industry structure & development along with opportunities and threats are discussed in detail in management Dicussion & Analysis Report. which forms part of the is report.

FINANCE

During the year under review the Company has repaid Rs.142.90 Lacs of term loans to the Financial Insitutions Balance desburesement of Rs.89 Lacs was also received during the year them State Bank of India against term loan sartctioned by them in earlier year.

FIXED DEPOSITS

The Company has not accepted any deposits during the year under review within the mearing of Section 58A of the Companies Act, 1956.

EXPANSION OF PLANT

During the year the Company has completed Expansion by instrailing 6240 Spinas at its plant situated at villago: Kanper, Udaipur as planned in earlier year.

SHARES CAPITAL

There is no change in Equity and Preference Share Capital during the year.

CAPTIVE POWER SUPPLY

The Power supply them Lignite based Captive Power Plant of 135 MW located at Bikanor in the State the Rajasthan for which the Company has invosted an amount of Rs. 2.26 Crores In Equity and Preference Shares of the saw Company, has starts in July, 2010. It is expected that the full supply of Power will start in August/September,2010 which Will reduce the cost of power.

DIRECTORS RESPONSIBILITY STATEMENT

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

(I) In the perparation of the annual accounts for the year ended march 31,2010 the applicable accouniting standards have been followed alongwith proper explanation relating to material departure and the nines to the accounts are self explanatory.

(II) The Directors have selected such accounting policies and appied them consitontly and thede Judgments and estithetes that are reasonable and prudent so as to give a ture view fair and the state of affairs of the Company as on 31st march, 2010 and of the profit of the Company for tne year ended on that.

(III) Thr Directors have taken proper and sufficent care for the maintenance of adequate accounting rocords in accordance with the provisions of the Companies Act. 1956 to safeguarding and detecting of the Company and for preventing and detecting fraud and in her irregularities.

(Iv) That the Directors have prepared the annual accounts for the year ended 31th march,2010 on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

A separate section on Corporate Governance and a certificate them Auditors of the Company regarding compliance of conditions in Corporate Governance as stipulated under Clause 49 of of the Listing Agreement with Stock Exchange form part of the Annual Report.

Directors

Shri S.L.Shroff, Shri N.G Khaitan and Shri. B.K.Agrawal retire by raration at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment, inforthetion as required pursuant to Clause 49 of the Listing Agreement with the Stock Exchange on the Directors Including those retining by rotation is provided in the Report of Corporate Governance.

MANAGEMENT

The Board of Directors of the Company has appointed Shri Rahul Shroff, as Wholetime Director of the Company to be designated as Executive Director for a period of 3 years w.e. from 01th August 2010. Remuneration and in its terms of appointment of Shri Rahul Straff have also been approved by the Remuneration Committee in its meeting held on 31th July,2010. Appointment and remuneraion referred to herein above is subject to approval of shareholders in the onsuing Annual General Meeting.

SUBSIDIARY COMPANY

The Company has no Subsidiary as on 31th therch, 2010.

AUDIT COMMITTEE

As per the requirement of Clause 49 of the Listing Agreements with Stock Exchange and in compliance of Sec 292(A) of Companies Act, 1956, the Company had constituted an Audit Committee compresing the following Directors:

1. Shri V. B. L. Mathur

2. Shri P. C. D. Nombiar

3. Shri N. G. Khaitan

4. Shri k. L. Sonthalia

Shri V.B.L. Mathur is the Chairman of the Audit Committee

The composition, role, functions and powers of the "Audit Committee are in accordance with Clause 49 of the Listing Agreements With Stock Exchange and Section 292A of the Companies Act, 1956.

PERSONNEL & INDUSTRIAL RELATIONS

The detailed discussion on human rescurces & Industrial retarions is made in "management Discussion & Anailysis Report" Which forms part of this report. The Board places on record their appreciation for the efforts and contribution made by all the employees for continued high leval in performance.

As required under the provisions of section 217(2A) in the Companies Act, 1956 read with the Componies (Particulars in Employees) Rules, 1975 as amended the particuaRs of employees of the Company who were in receipt of reminefation Rs.2,00,O00/- per month or there Rs annexed and marked as Annexure I which forms part of this report.

AUDITORS

M/s G.P. Kejnwal & Co, Chaptered Accountants. Jaipur. the meeting AUDITORS, offer themselves for re-appointment The Company has received acceptor them the AUDITORS to the effect that their appointment it made, would be within the presented limits under Section 224(1B) of the Companies Act 1956.

AUDITORS REPORT

The observations of the AUDITORS read together with the times in Accounts raferred to by them In their report are self-explanatory However in this regard we have to state further as under:

i. The Company Rs following Mercantile System of Accounting on all items and recognrses income and Expenditure on acciual basis except for certain Items as mentioned in schedule 23 nine 1(ix) of Annual Account due to the reasons mentioned therein

ii. The Company has a system of writing off of Defened Revenue Expenditure over a period of S years as the benefit will accrue over a period of such time This year no deferred Revenue Expenditure has been incurred and such unamortised expenditure is Rs.9,39,587/- as on 31.03.2010. However all related delaties for Expenditure incurred are stated in nine no. 1(xii) in Schedule 23 of Annual Accounts.

iii. During this year Turnover as per Profit & Loss Account and schedule 14 of Turnover includes Net Foreign Exchange Gain of Rs.3.21.00,165/- on ate of Forward cover for export sale as stated in nine no, 7(xii) in Schedule 23 of Annual Accounts.. management is not the view that this contrary to the Accounting Standard AS-11, as appucable and the prevision of schedule VI (Part II) of the Companies Act, 1956.

iv. There were slight detays in payment of certain dues towards Service Tax, VAT and Tax deducted at source the concerned officers have been requested to ensure timely payments and doposits.

PARTICULARs OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The statement pursuant to Section 217(1) (e) of the Companies Act. 1956, read with Companies Act (Disclosure of Pareticulars in the Report of Board of Directors) Rules 1988 Rs the Annexure 2 forming part of the report.

ACKNOWLEDGMENT

Your Directors expresses their grateful approiation of the co-operation and continued assistance recerved them the Financial Institutions, Banks. Govnament Autherities. shareholders and Suppliers and Esteemed Customers. Your Directors also wish to place on record the appreciation in the services rendafred by the Employees of the Company.



On behalf of the Board

Place : Mumbai R. N. SHARMA SANJIV SHROFFF

31th,Jury, 2010 Wholetime Director managing Director

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