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Directors Report of Suditi Industries Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the Twenty Fourth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2015 and the Profit and Loss Account for the year ended on that date.

Financial Results: (Rs. in Lakhs)

Particulars Current Previous Year Ended Year Ended 31.03.2015 31.03.2014

Export Sales 29.99 40.83

Local Sales 6960.00 6166.55

Other Income 57.18 23.61

Gross income 7047.17 6230.99

Profit before Interest 565.24 429.05 and Depreciation

Finance Cost 250.24 213.34

Profit after Finance Cost 315.00 215.71

Depreciation 194.27 119.89

Profit / (Loss) before Tax 120.73 95.82

Provision for Tax 23.05 18.50

Profit / (Loss) after Tax before 97.68 77.32 extra ordinary income

Extra Ordinary Items* (3.56) -

Net Profit 94.12 77.32

Add: Brought forward from the 832.27 779.93 previous year

Transfer to General Reserve - -

Amount available for appropriation 926.39 857.25

Proposed Dividend 20.97 21.35

Tax on Proposed Dividend 4.19 3.63

Balance carried to Balance Sheet 901.23 832.27

* Refer appropriations in the Reserves and Surplus

Dividend:

In order to promote the growth of the company as well as to fulfill the aspirations of the stakeholders, the promoters have in writing waived their entitlement on the profit distribution in the form of dividend if any declared by the company for the year 2014-15. Accordingly the Board after considering all these aspects has recommended a dividend for the year under review at the rate of Rs.0.50 per Equity Share only on the portion of the paid up equity capital held by the public as on 31st March 2015. No amount has been transferred to General Reserve from the profits for the year 2014-15.

Operations:

There is substantial improvement in the overall performance during the year under review in comparison to previous year. The company has achieved an increase of around 13% in the sales figures and around 26% in the net profits before tax in comparison to previous year. However the growth in the sales of the Retail division barring sales under FIFA licentiate rights is lower than anticipated for the year and consequently the company had to absorb the losses generated by the Retail business activities. Because of this the overall profit recorded by the company is lower than the projections for the year under review. The Macro economic conditions in the country have shown signs of recovery and optimistic throughout the year. However the situations continued to remain grim all over the world barring few countries. This does not augur well for the textile and garment sector which depends maximum on export

sales for their revenue. But timely initiatives taken by government, value addition by many units as well as reasonably stable price ranges prevailed over a long period during the year has given a major boost in the demand for goods in the domestic market. This has helped the company to achieve growth in the sales except in the retail division where the company needs to give further thrust in the development of product ranges as well as the market network.

The company continued the revamping task undertaken in the previous year in order to strengthen the operations of the Retail division to make it a profitable business. Many unviable outlets were discontinued including the outlets opened under Large Format Stores (LFS) models like Reliance/Maya etc. In its place the company has started new counters through other LFS like Wall Mart, Shoppers Stop, Lifestyle and Arvind Megamart. Another major step taken by the company during the year is the expansion of business through on line sales network like Flip kart, Jabbong, Myntra etc. Further the company is also using other social network to expand the reach of the products to the actual users. The company has also plans to expand the sales network through other media like Television channels and other social media. Finally regarding the pending EPCG License issue, the company is actively pursuing the matter with DGFT office to resolve the matter at the earliest.

Export Sales:

The overall export performance for the year is not as per the estimates made by the company. This is mainly due to prevailing unfavorable economic and market conditions for clothing and other apparels in the European market and other parts of the world. Hence the company continued to remain focused maximum in the local market. The exports were mainly sent in the form of finished fabrics to neighboring countries like Bangladesh. The company is exploring the possibility of increasing the volume of fabric shipments to Bangladesh which again depends upon the global economic conditions as Bangladesh mainly caters to the export market. The company continues its efforts to find the possibility of developing new markets in African and Far East countries. However much depends upon the positive changes in the global economic conditions particularly in the US and European economies. The objective of the company is to achieve the target of exporting 50% of its capacity to the overseas customers with better value addition. Further efforts are continued to align with some reputed brands in the overseas market to promote the exports in large volume.

The company continues to follow the business promotion programme by taking active participation in various international Fairs/ exhibitions as well as selling garments by using the brand and logos of some important sports events. The company has executed new agreements with some reputed football clubs in Europe to enhance the scope of the sales. As India is better placed than other competitors in the global markets, the prospects are good in terms of better unit value realization and volume. The company has developed better products particularly in the printed and embroidery varieties as there is better scope for increasing the volume based business on regular basis. In view of these, company continues to follow its plans to increase the exports business in sizable volume in the future.

FIFA 2014 (Foot Ball World Cup - Brazil):

As stated in the last year the company had developed and produced wide range of garments with FIFA brand LOGOS embossed on the garments by using licentiate rights acquired for India. The overall response was encouraging though this was one of the first attempts by any company in India. Even for the company this was the first experience and the outcome was encouraging. In view of this the company has now executed fresh new agreements with other reputed football clubs.

Expansion:

As stated in the last year, the management has not undertaken any new projects during the year under review. Accordingly there will not be any major expansion plan for some period except addition of some balancing equipments and replacement of old machineries and equipments. The remaining portion of the retail expansion plan as proposed in the Rights issue offer documents will be undertaken gradually over a period of time in the next few years depending upon the market conditions.

Human Resources & Industrial Relations:

The Company treats its "human resources" as one of its most important assets. The Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. The Industrial relations with the employees at the Company's plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai and in the other locations continue to remain healthy and cordial.

Share capital:

During the year under review, the company has not any issued any class of shares like shares with preferential rights or sweat equity shares and accordingly there is no change in the Subscribed and Issued capital.

Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011):

The company had granted options to the employees in the year 2013 under the Suditi Employee Stock Option Plan 2011. Each option is equal to one share at par (Rs.10/- each) being the price fixed for exercising the right. To facilitate the employees to exercise their right to buy the options granted to them, the Company has divided the total options granted on certain prescribed basis over a period of 5 years. The share arising on exercise of the options shall be subject to a lock in period of 1 year from the date of allotment. The two parts of the grant has been vested till the date of 31st March 2015. The details are as follows:

Granted Accepted Rejected Vested

No of Total No of Total No of Total Upto Employees options employees options Employees options second (Nos.) (Nos.) (Nos.) part of Grant

48 278700 18 219500 30 59200 58075

The disclosure of the details is as follows:- (a) Options granted & Accepted; 219500

(b) The pricing formula; At par

(c) Options vested; 58075

(d) Options exercised; Nil

(e) The total number of shares arising as a result of exercise of option; Nil

(f) Options lapsed; 59200

(g) Variation of terms of options; NA

(h) Money realised by exercise of options; Nil (i) Total number of options in force; 219500 (j) Employee wise details of options granted to;- (i) Senior managerial personnel; 206000 (ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year. Nil (iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant; Nil

(k) Diluted Earnings per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ['Earnings Per Share']. No options are exercised till date. Based on the options vested EPS is Rs.58/.

(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed.

The impact on account of this will reduce the profits by Rs.970433/- and accordingly on proforma basis the company's basic and diluted earnings would have been Rs.0.59 and Rs.0.58 respectively.

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock. NA

(n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

(i) Risk-free interest rate, 8.52%

(ii) Expected life, 5 years

(iii) Expected volatility, 4.72%

(iv) Expected dividends, Rs. 0.50 per share

(v) The price of the underlying share in market at the time of option grant.] Rs.7.68

Meetings:

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year six Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

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, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The details have been explained in the Corporate Governance Report.

Declaration by an Independent Director(s) and re-appointment, if any:

A declaration by an Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is enclosed as Annexure II. An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.

Remuneration Policy:

The Board has, on the recommendation of the Nomination & Remuneration Committee follows a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Managerial Remuneration:

A) Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. (Enclosed as Annexure III).

B) Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement showing the requisite information pursuant to the Companies (Appointment of Managerial Personnel) Rules 2014 is not annexed herewith as there are no employees covered by the above rules.

C) Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Board's Report. Nil

D) There are no disclosures to be made as the directors except the Chairman & Managing Director, are not in receipt of any remuneration or stock options other than sitting fees and reimbursement of expenses incurred for attending the meeting. The details are furnished separately in the corporate governance report.

Details of Subsidiary/Joint Ventures/Associate Companies:

The company has incorporated two subsidiaries only during the month of March 2015 and the subsidiaries are yet to commence their business operations. The subsidiaries have obtained the commencement approval from the Registrar of companies- Maharashtra only in the month of April 2015 and other necessary legal formalities are yet to be obtained for commencing the business operations. Hence there are no details pursuant to sub-section (3) of section 129 of the Act, to be given in the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures.

Name of the Capital as on 31.3.2015 Share Date of

company held by Authorised Subscrib Suditi Incorporation Commencement

Suditi Sports Rs.50 Lakhs Rs.5 Lakhs Rs.4 lakhs 18.03.2015 04.04.2015 Apparel Ltd.

Suditi Design Rs.50 Studio Ltd. Lakhs Rs.5 lakhs Rs.4 lakhs 23.03.2015 04.04.2015

Deposits:

The Company has not accepted any deposits within the meaning of Section 73 & 76 of Companies Act, 2013 and the rules made there under.

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 is given in the Annexure I forming part of this report.

Directors & the Key Managerial Personnel:

In accordance with the provisions of section 152 & 161 as well as Rule 3 of The Companies (Appointment and Qualification of Directors) Rules, 2014, the company has appointed Smt. Sanjula Sanghai as additional Director to represent as Women Director on the Board. As an Additional director she holds office upto the date of Annual General meeting and seek re-election to the Board in the forthcoming Annual General Meeting. Further Shri. Pawan Agarwal,

Chairman & Managing Director retire by rotation at the forthcoming Annual general meeting and being eligible offer himself for reappointment. Shri. Pawan Agarwal Chairman & Managing Director whose term as Managing Director expired on 31st Janauary 2015 has been reappointed as Managing Director with effect from 1st February 2015 by the Board subject to approval of members in the forthcoming Annual General Meeting. Further the company is in the process of appointing a Chief Financial Officer (CFO) to take over the functions of CFO which hitherto is held by Chairman & Managing Director.

Directors' Responsibility Statement:

The Directors hereby confirm:-

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

ii) That 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;

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

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

v ) That 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 and;

vi) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance:

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

Cost Audit:

The Company has appointed M/s. NNT & Co, (Reg. No. 100911), Cost Accountants as the Cost Auditor to audit the cost records maintained by the Company for the year 2014-15. However in view of the new Companies (Cost Records & Audit) Rules 2014 and amendment thereof, the management is of the view that the company is now out of the purview of the Cost Audit Report Rules. In view of this, the company has not appointed any Cost Auditor for the year 2015-16.

Auditors:

Pursuant to Section 139 of the Companies Act, 2013 M/s. Chaturvedi & Co., (ICAI Firm Registration No.302137E) Chartered Accountants had been appointed as the Statutory Auditors of the Company at AGM held on 12th September 2014 to hold office till the conclusion of the AGM to be held in the calendar year 2017 subject to ratification by the members at each annual general meeting. Accordingly the resolution proposing ratification of appointment of M/s. Chaturvedi & Co. as statutory auditors of the company for financial year 2015-16, pursuant to Section 139 of the Companies Act, 2013 is annexed and forms part of the notice of annual general meeting.

Secretarial Audit Report:

In terms of Section 204 of the Act and Rules made there under, Shri. Shivhari Jalan Practicing Company Secretary has been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure separately to this report. The report is self-explanatory and does not call for any further comments other than the explanation given on the appointment of Chief Financial Officer.

Internal Audit & Controls:

The Company has engaged SGCO & Co as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

Vigil Mechanism:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been made available to each and every stakeholder.

Risk management policy:

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, that in the opinion of the Board may threaten the existence of the company as given separately in the Corporate Governance Report.

Extract of Annual Return:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report as ANNEXURE IV.

Material changes and commitments, if any, to report affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:

There are no such material changes and commitments to report under this head.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future:

There are no such significant and material orders passed by any regulators to report under this head.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

The company has set up vigilant internal control mechanism to ensure that the financial statements prepared are true, fair and transparent. The company has set up strong internal audit department apart from Management committee to ensure that all the financial transactions executed are in compliance with applicable laws and regulations and in line with the budget plans. Any variations or deviations are appropriately dealt with by the internal Audit department as well as by the Audit committee. According to the management the present mechanism followed in the company is adequate and effective. The details are also stated in the Management discussion and analysis report annexed herewith and form part of this report.

Particulars of loans, guarantees or investments under section 186:

There are no loans/guarantee or security provided during the year

under review. The details of investments made are as follows:- Details of Investments:-

Sl Date of Details of Amount Purpose for Date of Date of Expected No investment Investee which the BR SR rate of

proceeds (if reqd) return from investment is proposed to be utilized by the recipient

1 01/04/15 Suditi Sports 4 lakhs Investment in 16/01/2015 NA 10%

Apparel Ltd. subsidiary

2 01/04/15 Suditi Design Investment in Studio Ltd. 4 lakhs subsidiary 16/01/2015 NA 10%

Particulars of contracts or arrangements with related parties:

The particulars of contract or arrangements entered into by the Company with related parties at arm's length basis referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2. as Annexure V.

Obligation of company under the "Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act 2013:

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Accordingly the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

Corporate Social Responsibility (CSR):

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable to the company.

Transfer of Amounts to Investor Education and Protection Fund:

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (12.09 2014), with the Ministry of Corporate Affairs.

Listing with Stock Exchange:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors

Place: Mumbai PAWAN AGARWAL

Date: 29.05.2015 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Third Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2014 and the Profit and Loss Account for the year ended on that date.

Financial Results: (Rs. in Lakhs)

Particulars Current Previous Year Ended Year Ended 31.03.2014 31.03.2013

Export Sales 40.83 28.66

Local Sales 6166.55 5352.07

Other Income 23.61 21.44

Profit before Interest and Depreciation 429.05 294.46

Finance Cost 213.34 123.85

Profit after Finance Cost 215.71 170.61

Depreciation 119.89 99.00

Profit / (Loss) before Tax 95.82 71.61

Provision for Tax 18.50 13.52

Profit / (Loss) after Tax before extra ordinary items 77.32 58.09

Extra Ordinary Items (Net) - -

Net Profit 77.32 58.09

Add: Brought forward from the

previous year 779.93 745.75

Transfer to General Reserve - -

Amount available for appropriation 857.25 803.84

Proposed Dividend 21.35 20.57

Tax on Proposed Dividend 3.63 3.34

Balance carried to Balance Sheet 832.27 779.93

Dividend:

In view of the requirement of funds to maintain the growth of the company as well as to fulfill the aspirations of the stakeholders, the promoters have in writing waived their entitlement on the profit distribution in the form of dividend, if any, declared by the company for the year 2013-14. Accordingly, the Board after considering all these aspects, has recommended a dividend for the year under review at the rate of Rs.0.50 per Equity Share only on the portion of the paid up equity capital held by the public as on 31st March 2014.

Operations:

The company continues to record substantial improvement in the overall performance during the year under review in comparison to the previous year. The company has achieved an increase of over 15% in the sales figures and around 34% in the net profits before tax in comparison to the previous year. However, the growth in the sales of the Retail division is lower than anticipated for the year and consequently the company has to absorb the losses generated by the Retail business activities. Because of this, the overall profit recorded by the company is lower than the projections for the year under review. The economic conditions in the country remained sluggish and pessimistic throughout the year. The situation remained same all over the world barring few countries. This was a matter of concern for the industry particularly textiles and other capital goods industry. There was no major growth in the demand witnessed by any major sectors of the industry. Lack of government initiatives, weak fiscal conditions and inflation in food prices has created a major slump in the

demand for goods in the domestic market. This has affected the growth of the company particularly in the export business and in garment sales.

The company has undertaken a major revamping of the Retail business division to strengthen the operations in order to make it a profitable division. Accordingly, the company discontinued the operations of some of the unviable stores like in Goa, Belgaum etc and also the counters operating through Large Format Stores (LFS) like Reliance/Maya etc. In its place the company has started new identical numbers of counters through other LFS like Pantaloon, Shoppers Stop, Lifestyle and Arvind Megamart. In addition to these outlets, the company has expanded the business through wholesale dealers and online sales network. The company proposes to add some more counters in the LFS formats and exclusive retail outlets in different parts of the country. The "Riot" brand name taken by the company is now fully acquired and used exclusively by the company for its Retail business activities. Apart from this, and in order to increase the profitability, the company has merged the activities of the Buying agency division with the existing marketing set up. Similarly, the company has closed the depot and merged the depot business with the existing marketing set up. The company has also discontinued the operations at Bhiwandi unit. Further, in respect of the pending EPCG License issues, the company is actively pursuing the matter with the DGFT office.

Export Sales:

There is some marginal increase in the exports in comparison to the previous year. However, the overall export performance is not as per the estimates made by the company. This is mainly due to unfavorable market conditions for clothing and other apparels in the European market and other parts of the world. Therefore, the company, during the year under review, continued to remain focused predominantly in the local market. The exports were mainly sent in the form of finished fabrics to neighboring countries like Bangladesh. The company continues to take initiatives to increase the volume of shipments to Bangladesh as the prospects to increase the same are very good. The company is now taking effective measures to explore the possibility of developing new markets in African and Far East countries. Also the company is observing some positive changes in the global market because of some economic recovery in the US and some European economies. The company is relentlessly taking various efforts to start the exports business particularly in these markets as they offer potential for supply of garments in huge volume. The long term objective of the company is to achieve a target of exporting 50% of its capacity in the overseas market. Alongside, the company continues its efforts to align with some large reputed brands in the overseas market to ensure continuity of exports in large volume.

The company continues to maintain the market development programme by taking active participation in various international Fairs/exhibitions as well as selling garments by using the brand and logos of some important sports events. One such effort undertaken by the company was by acquiring the licentiate rights of FIFA 2014 which is very encouraging and the company would be undertaking similar efforts in the future also. This has been followed with the objective of identifying some new avenues like selling of garments by developing new markets in these regions. As the global markets are now within the reach of Indian textile exporters in terms of competition the prospects are good for better unit value realization and volumes. The company has added various products like printed garments and fabrics to attract high end customers who offer better rates and attractive margins to undertake volume based business on regular basis. In view of these, the company continues to pursue its plans to increase the exports business in sizable volume in the future.

FIFA 2014 (Foot Ball World Cup - Brazil):

The company has developed and produced wide range of garments with FIFA brand LOGOS embossed on the garments by using licentiate rights acquired for India. The sale of garments embossed with FIFA LOGOS have already started in full scale and are expected to last till the end of July, 2014. As a part of expansion of the Retail business activities, the company proposes to continue the market development programme through selling licensed garments of various prestigious clubs promoting big sports events. The company is in the process of finalizing the agreements with other sports related organizations/clubs like "Real Madrid" in Spain & "Manchester City" in England. This will provide great opportunity for the company to establish the brand name in the market as well as to boost the sale of garments in the domestic market.

Expansion:

Since the company has completed almost all planned projects, the management has decided not to undertake any new projects for some time. Accordingly there will not be any major expansion plan for some period except addition of some balancing and replacement of old machineries and equipments. As per the detailed plan of capital expenditure given in the Rights Issue offer document, the company has completed the construction/acquisition of new administrative block to centralize all administrative and back office operations, new garment unit as well as significant portion of the expansion of Retails Business through setting up new stores. The remaining portion of the retail expansion plan will be undertaken gradually over a period of time in the next few years depending upon the market conditions.

Industrial Relations:

Industrial relations with the employees at the Company''s plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai and in the other locations continued to remain healthy and cordial.

Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011): During the last year the company had granted options to the employees under the Suditi Employee Stock Option Plan 2011. Each option is equal to one share at par (Rs.10/- each) being the price fixed for exercising the right. To facilitate the employees to exercise their right to buy the options granted to them, the Company has divided the total options granted on certain prescribed basis over a period of 5 years. The share arising on exercise of the options shall be subject to a lock in period of 1 year from the date of allotment. The first part of the grant has been vested during the month of March 2014. The details are as follows:

Granted Accepted Rejected Vested No of Total No of Total No of Total First part Employees options Employees options Employees options of (Nos.) Grant (Nos. ) Grant

48 278700 18 219500 30 59200 21950

The disclosure of the details is as follows:-

(a) (i) options granted; 278700

(ii) options accepted; 219500

(b) the pricing formula; At par

(c) options vested; 21950

(d) options exercised; Nil

(e) the total number of shares arising as a result of exercise of option; Nil

(f) options lapsed; 59200

(g) variation of terms of options; NA

(h) money realised by exercise of options; Nil

(i) total number of options in force; 219500

(j) employee wise details of options granted to;- (i) senior managerial personnel; 206000

(ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year; Nil

(iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant; Nil

(k) diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ''Earnings Per Share'']. No options are exercised till date.

(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. The impact on account of this will reduce the profits by Rs.339567/- and accordingly, on proforma basis, the company''s basic and diluted earnings would have been Rs.0.44 and Rs.0.44 respectively.

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock. NA

(n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

(i) risk-free interest rate, 8.51%

(ii) expected life, 5 years

(iii) expected volatility, 4.30%

(iv) expected dividends, Rs.0.50 per share

(v) the price of the underlying share in market at the time of option grant, Rs.7.68

Personnel:

The statement showing the requisite information in compliance with the provisions of Section 217 (2A) of the Companies Act, 1956 is not furnished herewith, as there are no employees covered by that section.

Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of Companies Act, 1956 and the rules made there under.

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure forming part of this report.

Directors:

The Board wishes to place on record the sad demise of Shri. Indu Sekhar Rao and acknowledges with gratitude the valuable contribution made by Shri. Indu Sekhar Rao towards the growth of the company during his tenure as Director of the company. Accordingly Shri. Indu Sekhar Rao ceases to be the member of the Board with effect from 7th April 2014. The Board also wishes to place on record with grief the sad demise of founder Chairman Shri. Kishorilal Agarwal and acknowledges with deep gratitude the valuable contribution made by Shri. Kishorilal Agarwal towards the growth of the company during his tenure in the past as Chairman of the company.

In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company Shri. Vivek Gangwal & Shri Sushil Kumar Kasliwal, would retire by rotation, and being eligible, offer themselves for re-appointment.

Directors'' Responsibility Statement:

The Directors hereby confirm: -

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give 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) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) That the Directors have prepared the annual accounts on a ''going concern'' basis.

Corporate Governance:

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

Cost Audit:

The Company had appointed M/s. Talati & Associates (Prof.V.J.Talati - Reg. No.-2203), Cost Accountants as the Cost Auditor to audit the cost records maintained by the Company for the year 2013- 14. This is as per the direction received from the Central Govt., in respect of conducting the audit of cost records maintained by the Company. For the year 2014-15 the company has appointed M/s. NNT & Co, (Reg. No. 100911) cost accountants as the cost auditor in place of M/s. Talati & Associates who has expressed their inability to accept the assignment due to personal reasons.

Auditors:

M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors

Place : Mumbai PAWAN AGARWAL Date : 27.05.2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Second Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2013 and the Profit and Loss Account for the year ended on that date.

Financial Results: (Rs. in Lakhs)

Particulars Current Previous Year Ended Year Ended 31.03.2013 31.03.2012 Export Sales 28.66 32.57

Local Sales 5352.07 4168.17

Other Income 21.44 64.92

Profit before Interest and Depreciation 294.46 235.95

Finance Cost 123.85 77.66

Profit after Finance Cost 170.61 158.29

Depreciation 99.00 77.98

Profit / (Loss) before Tax 71.61 80.31

Provision for Tax 13.52 14.96

Profit/(Loss) after Tax before extra ordinary items 58.09 65.35

Extra Ordinary Items (Net)

Net Profit 58.09 65.35

Add: Brought forward from the previous year 745.75 729.91

Transfer to General Reserve

Amount available for appropriation 803.84 795.26

Proposed Dividend 20.57 42 60

Tax on Proposed Dividend 3.34 6.91

Balance carried to Balance Sheet 779.93 745.75

Dividend:

Considering the need to maintain a balanced approach towards the growth of the company and the aspirations of the stakeholders, the promoters have in writing waived their entitlement on the profit distribution in the form of dividend i any declared by the company for the year 2012-13. In view of this the Board is pleased to recommend a dividend for the year under review at the rate of Rs.0.50 per Equity Share on the paid up share capital of the

Operations:

The company has registered substantial improvement in the overall performance during the year under review in comparison to previous in the sales is lower than anticipated due to lower than projected sales recorded by the retail division. In view of this the company had to absorb the loss generated by the Retail business activities which ultimately affected the overall profit recorded by the company.

The economic conditions in the country and across the globe continue to remain a matter of concern for the industry. Because of economic crisis in many parts of Europe, the demand for the consumer goods remain subdued. In the domestic market the situation has started deteriorating and the optimism prevailed in the last few years have started receding in the current year as the country registered economic growth much below the projected level. However the situation has still not slipped out of control and the country is expected to do much better in the current fiscal year. The company is anticipating a positive development in the demand for garments and fabrics with bolter price structure.

The company continues to expand the Retail business by adding new outlets through Large Format Stores (LFS) like Reliance/ Lifestyle etc. In addition to these outlets, the company has opened some exclusive outlets in various cities on its own or through franchisees. The company proposes to add some more counters in the LFS formats and an additional at least 15 exclusive retail outlets in different parts of the country. The "Riot" brand name taken by the company would be now fully acquired and used exclusively by the company for its Retail business activities. Apart from this the company is also taking some immediate measures to streamline the activities of the Buying agency division to expand the scope of business for the company. Further regarding the pending EPCG License matter, the company is actively following up the matter with DGFT office to resolve the issue at the earliest. Export Sales:

The market conditions continued lo remain depressed for clothing and other apparels in the European market and other parts of the world. Therefore the company during the year under review focused maximum in the local market. Hence there were no significant exports of garments and fabrics during the year under review. However the company made some efforts in the neighboring countries like Sri Lanka, Bangladesh to explore the possibilities of regular supply of fabrics to the garment manufacturers of these countries. The company was able to make some progress which resulted in the supply of some consignments to Bangladesh. The company is now taking some effective measures to ensure regular supply of finished fabrics to garment manufacturers of Bangladesh and Sri Lanka. Apart from this the company has now made some preliminary studies to assess the possibility of arranging the supply of garments through countries like Myanmar. The various options and possibilities are now assessed and a detailed critical review would be made of all these alternatives before taking any final decision. Further the company is observing some noticeable changes in the global market because of some recovery in the US economy. The company has now initiated some actions to start the exports business particularly in these markets as these markets offer potential for supply of garments in huge volume. Ultimately the company intends to supply at least 50% of its capacity in the overseas markets to ensure the sales of more value added garments and apparels. Alongside the company is actively pursuing its efforts to align with some big reputed brands in the overseas market to ensure the export in large volume.

The company continues to maintain the market development programme by taking active participation in various international Fairs/exhibitions to demonstrate the capacity to manufacture quality fabrics and gaments. This has been followed with the objective of identifying some new potential customers as well as developing new markets in these regions. As the global markets are now slowly opening up for Indian textile goods in terms of better unit value realization and volume, the company has added various products like printed garments and fabrics to attract high end customers. This will help the company to get better rates and attractive margins to undertake volume based business on regular basis. In view of these, the company has drawn up plans to increase its exports business in sizable volume in the future.

FIFA 2014 (Foot Ball World Cup - Brazil):

As a part of expansion of the Retail business activities, the company is undertaking a major market development programme from 2014. To meet this objective the company has taken the license rights for India - For apparels for FIFA 2014 (Football World Cup in Brazil). This will provide a great opportunity for the company to establish the brand name in the market and boost the sale of garments in the domestic market. Expansion: As a part of the expansion cum modernization plan, the company has now completed the execution of the printing project at the existing factory unit at Navi Mumbai. The company has started the commercial production during the year under review and this is expected to give better product range in printing varieties with value addition to enhance the profitability of the existing processing unit. Apart from this the second garment unit at Bhiwandi has also started commercial production during the year under review. The production is expected to be stabilized during the current year. As per the a detailed plan of captal expenditure drawn for the next two years which includes expansion of Retail business activities, and construction/acquisition of new administrative block to centralize all administrative and back office operations, the company has achieved significant progress in the implementation of this plan during the year under review.

Rights Issue:

During the year under review the company issued shares to the existing shareholders on rights basis. The issue was opened for subscription on 20th.September 2012 and closed on 4th October 2012. Further the company has completed all the formalities and procedures related to the Rights issue of shares and filed necessary application with Secures and Exchange Board of India (SEBI)for issue of No Objection Certificate for the release of Security deposit kept with the Bombay Stock Exchange Ltd. After the Right Issue the paid up captal of the company has increased from Rs.852 lakhs to Rs. 1667.43 lakhs. The proceeds received from the Rights issue are spent on the projects envisaged in the ofler document and the surplus funds which is yet to be spent on the specified capital expenditure are deployed towards the working capital needs of the company as stated in the offer document. These funds will be utilized as and when the need for the capital expenditure arises.

Industrial Relations:

Industrial relations with the employees at the Company''s plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai and Bhiwandi as well in the other locations continue to remain healthy and cordial.

Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011):

During the year under review the company has granted options to the employees under the Suditi Employee Stock Option Plan 2011. Each option is equal to one share at par (Rs.10/- each) being the price fixed for exercising the right. To facilitate the employees to exercise their right to buy the options granted to them, the Company has divided the total options granted on certain prescribed basis

The vesting of the opt ons to each and every employee who have accepted the options shall take place during March/April 2014.

Personnel:

The statement showing the requisite information in compliance with the provisions of Section 217 (2A) of the Companies Act, 1956 is not furnished herewith, as there are no employees covered by that section.

Deposits:

The Company has not accepted any deposts within the meaning of Section 58A of Companies Act, 1856 and the rules made there

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure forming part of this report.

Directors:

In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company Shri. Sushil kumar

Kasliwal and Shri. IndusekharRao Directors, would retire by rotation, and being eligible, offers themselves for re-appointment.

Directors'' Responsibility Statement:

The Directors hereby confirm: -

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give 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) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) That the Directors have prepared the annual accounts on a ''going concern'' basis. Corporate Governance:

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

Cost Audit:

The Company has appointed M/s.Talati & Associates (Prof.V.J.Talati - Reg.No. M-2203), Cost Accountants as the Cost Auditor to audit the cost records maintained by the Company for the year2012-13. This is as per the direction received from the Central Govt., in respect of conducting the audit of cost records maintained by the Company.

Auditors:

M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re appointment.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation forthe support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors Place : Mumbai PAWANAGARWAL

Date ; 29.05.2013 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

The Directors have pleasure in presenting the Twenty First Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2012 and the Profit and Loss Account for the year ended on that date.

Financial Results: (Rs. in Lakhs)

Particulars Previous Current Year Ended Year Ended 31.03.2012 31.03.2011

Export Sales 32.57 9.01

Local Sales 4168.1 3093.43

Other Income 64.92 53.29

Profit before Finance Charges/Cost

and Depreciation 235.95 258.66

Finance Cost 77.66 39.57

Profit after Finance Cost 158.29 219.09

Depreciation 77.98 68.67

Profit/(Loss) before Tax 80.31 150.42

Provision for Tax 14.96 30.75

Profit / (Loss) after Tax before extra

ordinary items 65.35 119.67

Extra Ordinary Items (Net) - -

Net Profit 65.35 119.67

Add: Brought forward from the

previous year 729.91 610.23

Transfer from General Reserve - -

Amount available for appropriation 795.26 729.91

Proposed Dividend 42.60 -

Tax on Proposed Dividend 6.91 -

Balance carried to Balance Sheet 745.75 729.91

Dividend:

Considering the sustained growth in the business and stability in the profitability levels, the board is pleased to recommend a dividend at the rate of Rs.0.50 per Equity Share on the paid up share capital as on 31a March 2012 of the company.

Operations:

The company has recorded significant improvement in the overall performance during the year under review in comparison to previous year. The company has registered an increase of almost 36% in the sales figures in comparison to previous year. However the growth in the sates is not in line with the projected level due to lower than the anticipated sales levels in the retail division. The economic conditions across the globe continue to remain as a concern because of economic crisis in many part of Europe. Even in US markets, the conditions are not very encouraging as the economy is still on the recovery path. In the domestic market the robust economic conditions prevailed in the last few years have started receding in the current year as the country registered economic growth much below the projected level. However overall market sentiments are very positive and the country is expected to do much better in the current fiscal year. The market conditions are expected to grow at a better pace in the domestic market. The company is already experiencing a spurt in the demand for garments and fabrics with better price structure.

The company expanded the scope of Retail business by adding outlets through Large Format Stores (LFS) like Reliance/life style etc. These Stores (LFS) are functioning apart from company's outlets opened in various cities. The company proposes to add more counters in the LFS formats and an additional at least 15 retail outlets in different parts of the country. The "Riot" brand name taken by the company would be acquired completely and used exclusively by the company only for its Retail business activities. Apart from this the company is also in the process of setting up a Buying House division in the lines of discontinued Apparel Buying division to expand the scope of business for the company. Further regarding the pending EPCG License matter, the company continues to pursue with Joint DGFT, Mumbai to resolve the issue at the earliest.

Export Sales:

In view of depressed conditions in the demand for clothing and other apparels in the European market and other parts of the world, the company during the year under review focused maximum in the local market. Hence there were no significant exports of garments and fabrics during the year under review. However in view of signs of recovery in the US markets and also efforts to revive the economy in the European region, the company undertook some exports during the last quarter of the financial year. The company has now initiated some actions to start the exports business particularly in the Asian regions mainly for quality fabrics. Apart from this the company is also negotiating with different buyers in the U S A and Europe for garment exports with better unit value realization. As the situation is gradually improving the company is hopeful of restarting the exports to these regions. Alongside the company continues its efforts to align with some big reputed brands in the overseas market to ensure the export in large volume.

The company continues to take active part in international Fairs/exhibitions to demonstrate the capacity to manufacture quality fabrics and garments in huge volumes. The company is hopeful of starting some sizable quantity of exports once the European markets start showing signs of recovery from recession. The company is now in the process of adding some printing line to increase the product range for exports markets. This will help the company to get better rates and attractive margins to undertake volume based business on regular basis. Ultimately in the long run the company now intends to export at least 30-50% of its production capacity to the various buyers all over the world with different product ranges.

Expansion:

As a part of the expansion cum modernization plan, the company is now in the process of setting up the printing project at the existing factory unit at Navi Mumbai. This will help the company to have a better product range with value addition to enhance the profitability of the existing processing unit. As per the detailed plan of capital expenditure drawn for the next two years which includes setting up another new garment unit expansion of Retail business activities, and construction/acquisition of new administrative block to centralize all administrative and back office operations, the company has initiated some preliminary work in the year under review. The new garment unit may be set up adjacent to the existing unit. The funds required for this programme will be arranged though issue of fresh equity shares on rights basis.

Rights Issue:

The Lead Managers M/S. Vertex Securities Ltd. had received necessary consent from SEBI (Securities & Exchange Board of India) and Bombay Stock exchange Ltd in respect of the proposed Rights Issue of shares. Accordingly the Lead Managers have made the final draft of the Offer documents incorporating the corrections/instructions given by the SEBI while according their consent for the proposed rights issue. The company intends to finalize the record date in the month of July/August 2012 on receipt of confirmation from the Securities and Exchange board of India.

Suditi Employee Stock Option Plan 2011 (Suditi ESOP 2011):

The Employee stock option plan approved by the company in the last general meeting has received necessary consent from the Bombay Stock Exchange Ltd. The company has now drawn up a detailed plan for introducing the same in the company gradually. The company has set up a Compensation committee to administer and oversee the scheme as per the procedures laid down in this behalf.

Industrial Relations:

Industrial relations with the employees at the Company's plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain healthy and cordial.

Personnel:

The statement showing the requisite information in compliance with the provisions of Section 217 (2A) of the Companies Act, 1956 is not furnished herewith, as there are no employees covered by that section.

Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of Companies Act, 1956 and the rules made there under.

Energy, Technology and Foreign Exchange:

The particulars relating 10 conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure forming part of this report.

Directors:

During the year Chairman ShriAnand Agarwal resigned from the Board as director due to pre occupation with other activities with effect from 3rd February 2012. The Board wishes to record their deep sense of appreciation for the valuable services rendered by Shri Anand Agarwal during his tenure as board member in various capacities.

In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company Shri Vivek Gangwal and Shri. Indusekhar Rao Directors, would retire by rotation, and being eligible, offers themselves for re-appointment.

Directors' Responsibility Statement:

The Directors hereby confirm:

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

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give 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) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) That the Directors have prepared the annual accounts on a 'going concern' basis. Corporate Governance:

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

Cost Audit:

The Company has appointed Mis. Talati & Associates (Prof.V.J.Talati Reg.No. M- 2203), Cost Accountants as the Cost Auditor to audit the cost records maintained by the Company for the year 2011-12. This is as per the direction received from the Central Govt., in respect of conducting the audit of cost records maintained by the Company.

Auditors:

M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves fa re-appointment.

Appreciation:

Your Company and its Directors wish lo place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and te management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors

Place: Mumbai PAWAN AGARWAL

Date: 29.05.2012 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting the Twentieth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2011 and the Profit and Loss Account for the year ended on that date.

Financial Results:

(Rs. in Lakhs)

Particulars Current Year Previous Year

Ended Ended 31.03.2011 31.03.2010

Export Sales 9.64 160.03

Local Sales 3091.24 2877.89

Other Income 59.75 98.15

Profit before Interest and 258.66 176.69

Depreciation

Interest 39.57 9.07

Profit after Interest 219.09 167.62

Depreciation 68.67 65.07

Profit / (Loss) before Tax 150.42 102.55

Provision for Tax 30.75 18.00

Profit/(Loss) after Tax before 119.67 84.55

extra ordinary items

Extra Ordinary Items (Net)

Net Profit 119.67 84.55

Add: Brought forward from 610.23 525.68

the previous year

Transfer from General Reserve

Amount available for appropriation 729.91 610.23

Balance carried to Balance Sheet 729.91 610.23

Dividend:

In view of ongoing expansion of business activities and also considering the need for conserving the resources for capital expenditure, your Directors have decided not to recommend for payment of any dividend on the Equity Shares for the year ended 31st March 2011.

Operations:

The company has recorded some improvement in the overall performance during the year under review in comparison to previous year. The profitability has increased in comparison to the previous year. The economic conditions across the globe have started showing signs of recovery barring few countries in the Europe. The robust economic conditions have further accelerated the growth in the domestic industrial sector. There is all round growth in the demand for goods in the domestic market. This has facilitated the improvement in the performance of the Garment unit during the year under review. The domestic business has registered a growth level of around 8% in comparison to previous year. However there is no substantial growth in the overall sales due to reduction in the export business.

During the year under review the company has started the Retail business activities by setting up few retail stores in different cities. However the progress in the first year is not in line with the projections due to initial teething problems and the time required for creating the brand awareness in the market. The company is now in the process of developing the brand name in the market by adding further chain of stores in the current year. Apart from this the company is also in the process of setting up a wholesale trade to expand the volume of domestic garment business. In respect of the Apparel buying activities, considering the present market conditions, the company has now discontinued the Apparel Buying division and merged the activities in the existing garment division itself. Further regarding the pending EPCG License matter, the company continues to pursue with Joint DGFT, Mumbai to resolve the issue at the earliest.

Export Sales:

In view of improvement in the demand for clothing and other apparels in the domestic market the company during the year under review focused maximum in the local market. Hence there were no significant exports of garments and fabrics during the year under review. Apart from this the unit value realization of exports are still very low and not economical comparing to the cost of manufacturing and the various quality and compliance norms imposed on the domestic manufacturers. Though there are some reversionary trends in the recessionary conditions in the U.S, the market conditions are not very encouraging in the Europe particularly in Spain, Greece and Portugal. In view of these difficult conditions, the company had focused more in the domestic market. However the company continued its efforts to align with some big reputed brands in the overseas market to ensure the export in large volume.

The company had taken active participation in international Fairs/exhibitions to demonstrate the capacity to manufacture quality fabrics and garments in huge volumes. The company had put up its stall in Intermodal Mexico and Hong Kong Fashion Week Fall Winter. This will help the company to identify some new potential customers as well as developing new markets in these regions. The overseas markets are now slowly opening up for Indian textile goods in terms of better unit value realization and volume. The company has added various facilities in the garment unit to attract high end customers. This will help the company to get better rates and attractive margins to undertake volume based business on regular basis. In view of these emerging trends, the company has drawn up plans to increase its exports business by manifold in the coming years. Finally the long term objective of the company is to export at least 50% of its production capacity to the various buyers all over the world with different product ranges.

Expansion:

The company has prepared a detailed plan of capital expenditure for the next two years which includes setting up another new garment unit, expansion of Retail business activities, and construction/acquisition of new administrative block to centralize all administrative and back office operations. The new garment unit would be set up either adjacent to the existing unit or in the nearby areas. The funds required for this programme will be arranged though issue of fresh equity shares on rights basis.

Rights Issue:

The Board had accorded their consent in their meeting held on 13th November, 2010 for issue of further shares to the existing shareholders on rights basis in the ratio of one share for every single share held as on the record date to be announced separately. The object of the issue is to provide funds for the foretasted capital expenditure plan. The company proposes to raise Rs.852 lakhs through the issue of fresh shares on rights basis from the existing shareholders. The company has appointed M/S.Vertex Securities Limited (A subsidiary of Tran warranty Finance Limited) as lead managers to the issue. The Offer documents duly approved by the board in their meeting held on 19th May 2011 are already filed With SEBI (Securities and Exchange Board of India) and the Bombay Stock Exchange Ltd.

Industrial Relations:

Industrial relations with the employees at the Company's plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain healthy and cordial.

Personnel:

The statement showing the requisite information in compliance with the provisions of Section 217 (2A) of the Companies Act, 1956 is not furnished herewith, as there are no employees covered by that section.

Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of Companies Act, 1956 and the rules made there under.

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure forming part of this report.

Directors:

In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company Shri. A.lndusekhar Rao and Shri. Sushil kumar Kasliwal Directors, would retire by rotation, and being eligible, offers themselves for re-appointment.

Directors' Responsibility Statement:

The Directors hereby confirm: -

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

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give 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) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) That the Directors have prepared the annual accounts on a 'going concern' basis.

Corporate Governance:

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

Cost Audit:

The Company has appointed M/s. N.Ritesh & Associates as the Cost Auditor to audit the cost records maintained by the Company for the year 2010-11 as per the direction received from the Central Govt., in respect of conducting the audit of cost records maintained by the Company.

Auditors:

M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions , Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors

Place: Mumbai ANAND AGARWAL

Date: 30.05.2011 CHAIRMAN


Mar 31, 2010

The Directors have pleasure in presenting the Nineteenth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2010 and the Profit and Loss Account for the year ended on that date.

Financial Results:

(Rs. in Lakhs)

Particulars Current Year Previous Year

Ended Ended

31.03.2010 31.03.2009

Export Sales 160.03 105.60

Local Sales 2877.89 2220.07

Other Income 98.15 126.77

Profit before Interest 176.69 34.37 and Depreciation

Interest 9.07 -

Profit after Interest 167.62 34.37

Depreciation 65.07 48.93

Profit / (Loss) before Tax 102.55 (14.56)

Provision for Tax 18.00 6.32

Profit / (Loss) after Tax before 84.55 (20.88) extra ordinary items

Extra Ordinary Items (Net) - 75.91

Net Profit 84.55 55.03

Add: Brought forward from 525.68 470.65 the previous year

Transfer from General Reserve - -

Amount available for 610.23 55.03 appropriation

Balance carried to 610.23 525.68 Balance Sheet

Dividend:

Considering the need for conserving the resources for expansion of business activities, your Directors have decided not to recommend for payment of any dividend on the Equity Shares for the year ended 31st March 2010.

Operations:

There is substantial improvement in the performance during the year under review in comparison to previous year. The global economic conditions continue to remain subdued for the major part of the year. However some amount positive signs of economic recovery were seen in U.S.A and Japan. Further the performance of the Garment unit has also shown some remarkable improvement in terms of productivity and profitability. The overall turnover has registered a growth level of around 31% in comparison to previous year. Similarly the Garment unit have also recorded an increase in the turnover from Rs. 5.66 crores to Rs. 10.67 crores thus registering growth of almost 89% in comparison to last year.

The process house as well as garment units are now fully stabilized and the Company is now poised to take full advantage of its strength in the production of quality fabrics and Garments. Based on these strengths, the company is now venturing into Retail as well as Buying House activities.

These business activities will enable the company to utilize its facilities to derive the maximum benefit in terms access to market as well as synergy in the production and capacity utilization. Further regarding the pending EPCG License matter, the company continues to pursue with Joint DGFT, Mumbai to resolve the issue at the earliest.

Export Sales:

Even though there is some significant increase in the exports sale during the year under review in comparison to previous year, the overall export performance is not as per the anticipated levels. The recessionary trend in the U.S. and Europe had severe impact on the export performance of most of the textile units particularly in the garment sector. In spite of some stimulus measures announced by the government for the textile sector, the impact of the same is yet to reflect in the workings of the garment units in the country. Apart from this the unit value realization of the export orders are far from the breakeven levels for our units to execute under the prevailing conditions. Even the foreign exchange market is still not conducive for the exporters as the US $ rates are not very attractive and stable.

The company is now taking all possible measures as the global conditions are showing signs of recovery particularly in the U.S.A and Japan. However Europe is still reeling under certain kind of recessionary conditions particularly in Greece, Spain etc .and the huge stimulus measures announced to bail out these economies will have some positive impact on the exports to these countries in the coming years. Considering all these aspects, the company is now directly taking exports Business from all over the world through its new Apparel Buying House division. This new division would be sourcing orders for arranging the supply through various manufacturers apart from providing business to the companys garment division on selective basis depending upon the profitability and volume of business.

Apart from this the company is also exploring the opportunities to expand its client base in African and Latin American countries including Mexico etc. to increase the scope of the export business. India is gradually becoming a global hub for sourcing Garments and Apparels by buyers from all over the world. In view of these emerging trends in the global market, the company has drawn up plans to increase its exports business by manifold in the coming years. Apart from this the company has installed some additional machinery in the printing, embroidery and other sections to cater to the requirements of some of the best international brands in the premium segments. Eventually the company is planning to export at least 50% of its production capacity to the various buyers all over the world with different product ranges.

Expansion:

There are no major expansion plans or any other form of investment envisaged for the company except adding some additional machineries and other balancing equipments to strengthen the production line as well as to provide some value addition to the garment division. However the company has started the following activities to enhance the market share as well as to increase the overall profitability of the company.

1) Retail Division:

The company has started the retail division under the Brand Name "RIOT" .The Company would set up chain of Retail Stores in different part of the country to sell directly to the retail customers. Apart from this the company would also be setting up Franchise shops to sell the products directly to the retail customers. The initial investment for this new division would be made by the company and as per the projections all further investments would be generated by the division itself from its operations.

2) Apparel Buying House:

The Company has set up another division primarily to source the materials for various buyers from different part of the world. Apart from providing some good export business to our garment division this new division would be sourcing Apparels and Garments for various buyers against their requirements from local manufacturers. The investment for this new division is not very significant and would be made by the company from internal sources.

Industrial Relations:

Industrial relations with the employees at the Companys plant at MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain healthy and cordial.

Personnel:

The statement showing the requisite information in compliance with the provisions of Section 217 (2A) of the Companies Act, 1956 is not furnished herewith, as there are no employees covered by that section.

Deposits:

The Company has not accepted any deposits within the meaning of Section 58A of Companies Act, 1956 and the rules made thereunder.

Energy, Technology and Foreign Exchange:

The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure forming part of this report.

Directors:

During the year under review Shri Anand Agarwal relinquished his post as Managing Director and at the request of the Board agreed to continue as the chairman of the Board . In his place Shri Pavan Agarwal is appointed as Managing Director with effect from 1st February, 2010.

In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company Shri Vivek Gangwal and Shri Anand Agarwal, Directors, would retire by rotation, and being eligible, offers themselves for re-appointment.

Directors Responsibility Statement:

The Directors hereby confirm: -

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

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

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

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

Corporate Governance:

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

Cost Audit:

The Company has appointed M/s. Ritesh & Associates as the Cost Auditor to audit the cost records maintained by the Company for the year 2009-10 as per the direction received from the Central Govt., in respect of conducting the audit of cost records maintained by the Company.

Auditors:

M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

Appreciation:

Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions , Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.

For and on behalf of the Board of Directors

Place: Mumbai ANAND AGARWAL

Date: 28.05.2010 CHAIRMAN



 
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