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Directors Report of Zenith Exports Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 33rd Annual Report on the business and operations of the Company and the audited financial results for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS (Rs. in lacs) Current Previous Year ended Year ended 31.03.2015 31.03.2014

Turnover and other Income 27292.02 31681.87

Profit before Depreciation and Tax 435.73 929.28

Depreciation 455.72 646.42

profit before tax -19.99 282.86

Income Tax for earlier years 5.15 -0.69

-25.14 283.55

Tax Expenses ( Current & Deferred) -33.61 116.93

net profit After tax 8.47 166.62

Add: Surplus Brought Forward 4013.84 3847.22

Less: Depriciation in respect of assets whose useful life is over (net of deferred tax) 520.16 0

surplus Carried to Balance sheet 3502.15 4013.84 operational review and future outlook

The operation of the Company has been adversely affected by the adverse Global Market during the year under review. The sales of the year under review were Rs. 24,867 lacs compared to Rs. 29,718 lacs in the previous year showing decrease of 16% compared to previous year. The Company has incurred loss before tax of Rs. 20 lacs compared to profit of Rs. 283 lacs in the previous year showing decrease of 107% compared to previous year. The Net profit after Tax (including deferred tax) of the year under review is Rs. 8 lacs compared to Rs. 167 lacs in the previous year showing decrease of 95% compared to previous year.

weaving division

Demands of the Silk & velvet fabrics were under pressure due to financial crisis in the European continent. In-spite of pressure in the Global market the financials of the Divisions for the year under review has been improved compared to previous year mainly due to correction in raw material costs.

spinning division

Crash of the price of raw cotton in the international market & lower demand has seriously impacted the bottom line of the Division during the year under review. The management has taken necessary steps to improve the operations of the division in the future.

expansion project

No expansion projects were initiated by the Company at its Weaving Division, Mysore or Spinning Divisions at Ahmedabad during the year under review due to low demand and sufficient installed capacity.

dividend

To conserve the resources of the Company, the Board of Directors do not recommend any dividend for this year also.

FINANCE

The Company has not taken any term loan during the year under review.

Listing Information

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and on the National Stock Exchange of India Limited (NSE).

Accreditation

The Company continues to enjoy ISO 9001: 2008 accreditation made by TUV NORD

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, your Board inducted Mrs. Urmila Loyalka as an additional director of the Company in the category of Woman Director with effect from 13/02/2015 in order to comply with the requirement of section 149

(1) of the Companies Act, 2013. In terms of section 161 of the Companies Act, 2013 she shall hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing alongwith deposit pursuant to section 160 of the Companies Act, 2013, proposing appointment of Mrs. Urmila Loyalka as a director of the Company. Your Board recommends appointment of Mrs. Urmila Loyalka as a director liable to retire by rotation.

Pursuant to section 152 of the Companies Act, 2013, Mr. Raj Kumar Loyalka (DIN:00006226), director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Your Board recommends his re-appointment.

Brief resumes of Directors being appointed/re-appointed together with other relevant details form part of the Notice of the ensuing Annual General Meeting.

During the year under review, pursuant to provisions of Section 2(51) and Section 203 of the Companies Act, 2013 read with ruled made thereunder, the following existing officials of the Company were designated/classified as whole time Key Managerial Personnel (KMPs) of the Company -

1. The Whole time Managing Director Mr. Surendra Kumar Loyalka as the CEO & whole time KMP

2. The Whole time Joint Managing Director Mr. Raj Kumar Loyalka as Whole time KMP

3. The Company Secretary Mr. Lawkush Prasad as the Company Secretary & KMP

4. The Executive Mr. Sushil Kasera as the Chief Financial Officer & KMP

Number of Meetings of the Board of Directors

The Board of Directors of the Company met 4 times during the year under review i.e. on 24/05/2014, 14/08/2014, 14/11/2014 & 13/02/2015.

Audit Committee

The composition, terms of reference etc. of the Audit Committee is provided in Corporate Governance Report which forms part of this Annual Report.

There have been no instances of non-acceptance of any recommendations of the Audit Committee by the Board during the financial year under review.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism/Whistle Blower Policy for the employees to report their concern or grievance.

The Audit Committee of the Company overseas the Vigil Mechanism.

INDEPENDENT DIRECTORS STATEMENT

The independent directors of the Company viz., Mr. Madhukar Manilal Bhagat, Mr. Keshar Deo Rungta, Mr. Mangilal Jain & Mr. Devendra Kumar sarawgee have filed their declaration with the Company at the beginning of the financial year 2015-16 affirming that they continue to meet the criteria of independence as provided in sub-section (6) of the Section 149 of the Companies Act, 2013 in respect to their position as an Independent Director of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by section 134 (5) of the Companies Act, 2013 your directors confirm that:

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

II] the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2015 and profit and loss for the year ended on that day;

III] the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV] the directors had prepared the annual accounts on a going concern basis;

V] the directors had laid down internal financial controls to be followed by the Company and the such internal financial control are adequate and were operating effectively and.;

VI] the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing agreement with the Stock exchange the Board has carried out the annual performance evaluation of its own performance , the directors individually as well as the evaluation of the working of its statutory committees.

Nomination and Remuneration Committee

The composition, key objectives etc. of the Nomination and Remuneration Committee is provided in Corporate Governance Report which forms part of this Annual Report. The Committee has formulated a Nomination and Remuneration Policy.

PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 AND THE RELEVANT RULES

(1) The ratio of the remuneration of each directors to the median remuneration of the employees of the Company for the financial year 2014-15

Name Ratio

Mr. Surendra Kumar Loyalka 10.16 (Managing Director)

Mr. Raj Kumar Loyalka 10.16 (Jt. Managing Director)

(2) The percentage increase in remuneration of each Director, Chief Executive officer, Company Secretary & Chief Financial Officer in the financial year 2014-15

Name Percentage

Mr. Surendra Kumar Loyalka 28% (Managing Director)

Name Percentage

Mr. Raj Kumar Loyalka 30% (Jt. Managing Director)

Mr. Lawkush Prasad 12% (Company Secretary)

Mr. Sushil Kasera 8% (Chief Financial officer)

(3) The percentage increase in the median remuneration of employees in the financial year 2014-15 = 8%.

(4) The number of permanent employee on the pay rolls of the Company - 651.

(5) The explanation on the relationship between average increase in remuneration and the Company performance:

As per policy of the Company we provide annual increment as per eligibility of the employees to retain the quality labour in the Company even in case of low profit.

(6) Comparison of the remuneration of the Key Managerial Personnel's against the performance of the Company:

CTC % increase Profit after % increase Name & Designatiion rs in CTC rs. lacs in PAT

Mr. Surendra Kumar Loyalka 25,46,790 28% 8.47 (95)

Mr. Raj Kumar Loyalka 24,40,236 30%

Mr. Lawkush Prasad 8,86,967 12%

Mr. Sushil Kasera 2,94,692 8%

(7) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies , and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year.

_(in rs.) Sr. Particulars As at 31st March 2015 As at 31st March 2014 No

1. Market Capitalization 32.76 crore 22.61 crore

2. Price earnings 379 times 14 times

3. Closing market price equity shares 60.70 41.90

(8) Average percentile increase already made in the salaries of employees other than the managerial personal in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average increase in remuneration is 8% for employees other than the Whole-time Director.

(9) The key parameters for any variable component of remuneration availed by the directors:

Mr. S. K. Loyalka & Mr. R. K. Loyalka, managing Directors are only entitled to Fixed remuneration and statutory benefits as per rules of the Company. They are not entitled to any performance Linked Bonus/ Incentive or commission of the net profit of the Company or sitting fees for attending the Board Meeting. None of the other directors are paid any remuneration except for sitting fees for attending the Board & Committees meetings.

(10) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Not applicable.

(11) Affirmation that the remuneration is as per the remuneration policy of the Company: Yes.

AUDITORS

M/s. Tiwari & Co., Chartered Accountants, were re-appointed as the Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 to hold office for a period of three (3) years upto the conclusion of 35th Annual General Meeting in the year 2017. They are eligible for re-appointment for the financial year 2015-16. Your Board recommends ratification of their appointment As the Statutory Auditors at the ensuing Annual General Meeting for a period upto conclusion of 35th Annual General Meeting of the Company.

AUDITORS REPORT

The notes on account referred to in the Auditor's Report are self-explanatory and therefore, do not call for any explanations or comments.

SECRETARIAL AUDIT

During the year under review, CS Sandip Kejriwal, Practicing Company Secretary who was appointed as the Secretarial Auditor of the Company has issued the audit report in respect of the secretarial audit of the Company for the financial year ended 31st march, 2015. The Secretarial Audit report which forms a part of the Annual Report is self-explanatory & requires no comments.

Internal Control System

The Board has laid down Internal Financial Controls ("IFC") within the meaning of the explanation to section 134 (5) (e) of the Companies Act'2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business.

Particulars of Loans, guarantees or investments

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act'2013 are given in the notes of Financial Statements.

Related party Transactions

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. As required under Clause 49 of the Listing Agreement, the Company has formulated a policy on dealing with Related Party Transactions.

Details of Contracts entered into with Related Parties under the provisions of sub-section 1 of Section 188 of the Companies Act, 2013:

1. To avail advisory services from Mr. Bilas Rai Loyalka for a period of three years on annual fees of Rs. 9 lacs.

2. Purchase of fabrics, Job work & sale of goods to SKL Exports Limited at prevailing market price for a period of 3 financial years for maximum transaction value of Rs.6 crore per annum.

3. Sale of Yarn to Zenith Apex Pvt. Ltd. at prevailing market price for a period of three financial years for an amount of Rs. 15 crore per annum.

particulars of employees

There was no employee drawing salary in excess of the limits as prescribed under section 197 of the Companies Act, 2013. Hence, information required to be given under the said section read with companies (Appointment & Remuneration of managerial Personnel) Rules, 2014 as amended has not been provided in this report.

ENERGY CoNsERVATioN, TECHNoLoGY Absorption And FoREIGN ExCHANGE EARNINGs & oUTGo

The particulars in respect of conservation of energy and technology absorption are given in annexure "A" forming part of this report pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and outgo

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed by section 134 (3) (m) of the Companies Act'2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in the Annexure-II to this Report.

Risk Management

Zenith Exports Limited follows well-established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization s objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy.

The senior management assists the Board in its oversight of the Company's management of Key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9, as required under section 92 of the Companies Act'2013, in included in this Report and forms an integral part of this Report.

Corporate Governance

It has been the endeavor of your Company to follow and implement best practices in corporate governance, in letter and spirit. A detailed Corporate Governance Report is attached and forms part of this report.

A certificate from the Statutory Auditors of the Company regarding Compliance of the conditions of corporate governance as required under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this report.

Management discussion and analysis

Management Discussion and Analysis as required under Clause 49(IV)(F) is disclosed separately in this report.

cautionary statement

Certain Statements in the Management Discussion and Analysis describing the Company's view about the industry, expectations/predictions, objectives etc. may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those implied therein. Important factors that could make a difference include raw material availability and prices, demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, industrial relations and economic developments within India and countries with which the Company conducts business and other incidental factors.

appreciation

Your Directors place on record their deep appreciation of the continued support and guidance provided by Central and State Government and all Regulatory bodies.

Your Directors offer their heartiest thanks to the esteemed shareholders, customers, business associates, Financial Institutions and Commercial Banks for the faith reposed by them in the Company and its management.

Your Directors place on record their deep appreciation of the dedication and commitment of Company's officers and employees at all levels and look forward to their continued support in future as well.

For and on behalf of the Board of Directors

Place : Kolkata surendra Kuma Loyalka Dated: August 13th, 2015 Chairman cum managing Director




Mar 31, 2014

Dear Members,

The Directors have pleasure to present the 32nd Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS (Rs. in lacs)

Current Previous Year ended Year ended 31.03.2014 31.03.2013

Turnover and other Income 31681.87 29032.67

Profit before Depreciation and Tax 929.28 765.62

Depreciation 646.42 649.80

Profit before Tax 282.86 115.82

Income Tax for earlier years (0.69) (0.48)

283.55 116.30

Tax Expenses ( Current & Deferred) 116.93 32.68

Net Profit After Tax 166.62 83.62

Add: Surplus Brought Forward 3847.22 3763.60

Surplus Carried to Balance Sheet 4013.84 3847.22

OPERATIONAL REVIEW AND FUTURE OUTLOOK

The sales have increased to Rs. 29718 lacs against Rs. 27013 lacs in the previous year, an increase of 10%. The Company has achieved profit before tax of Rs. 282.86 lacs against Rs. 115.82 lacs in the previous year, an increase of 144%. The Net profit after Tax (including deferred tax) has increased to Rs. 166.62 lacs against Rs. 83.63 lacs in the previous year, an increase of 99% compared to last year.

WEAVING DIVISION

Demands of the Silk & velvet fabrics have been increased due to recovery in the Global market. However, increase in price of raw silk & other input cost has seriously affected the bottom lines of the division.

SPINNING DIVISION

High production of cotton fibre in USA & China has seriously impacted price & export of cotton yarn. The prices of cotton yarn crashed heavily due to oversupply.

EXPANSION PROJECT

WEAVING DIVISION

No major expansion project was initiated by the Company at its Weaving Division, Mysore due to low demand and sufficient installed capacity.

SPINNING DIVISION

No major expansion project was initiated by the Company at its Spinning Division at Dholka, Ahmedabad due to the moribund condition of textile industry.

DIVIDEND

To conserve the resources of the Company, the Board of Directors do not recommend any dividend for this year also.

FINANCE

The Company has neither taken any term loan during the year nor there was any outstanding term loan during the year.

PARTICULARS OF EMPLOYEES

There was no employee drawing salary in excess of the limits as prescribed under section 217(2A) of the Companies Act, 1956. Hence, information required to be given under the said section read with companies (Particulars of employees) rules, 1975 as amended has not been provided in this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars in respect of conservation of energy and technology absorption are given in annexure "A" forming part of this report pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

CORPORATE GOVERNANCE

Your Company complies with all the mandatory requirements pertaining to Corporate Governance, in terms of revised Clause 49 of the Listing Agreement with the Stock Exchanges. A detailed report on Corporate Governance along with a copy of certificate from statutory auditors regarding compliance of conditions on corporate governance is annexed thereto.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your directors hereby confirm that:

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

II] 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 as at 31st March, 2014 and profit and loss for the year ended on that day;

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

IV] the Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as required under Clause 49(IV)(F) is disclosed separately in this report.

DEPOSITS

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits rules) 1975, the Company has not accepted any fixed deposits during the year under review.

DIRECTORS

* In accordance of the provisions of the Section 196, 197 & 203 of the Companies Act, 2013, it is proposed to Re-appoint Mr. Surendra Kumar Loyalka, managing Director & Mr. Raj Kumar Loyalka, Joint Manging Director for a further period of 5 (five years).

* In accordance with the provisions of Section 149, 152 and other applicable provisions of the Companies Act, 2013 ("Act) and Rules framed thereunder, it is proposed to appoint Mr. Madhukar Manilal Bhagat, Mr. Keshar Deo Rungta, Mr. Manik Lal Jain & Mr Devendra Kumar Sarawgee, who are currently non-executive independent directors of the Company and who met the criteria for independence as provided in Setion 149(6) of the Act, as independent Director for a period of 5 (five) years wherever applicable from the date of the ensuing Annual General Meeting

AUDITORS

M/s. Tiwari & Co., Chartered Accountants, retires as the Statutory Auditors of the Company at the conclusion of the ensuing 32nd Annual General Meeting and being eligible offers themselves for re-appointment. The retiring Auditors have furnished a certificate of their eligibility for re-appointment under the provisions of the Companies Act, 2013.

Your Directors request you to appoint the existing auditors as statutory auditors for a further period of 3 (three) financial year i.e. upto the conclusion of 35th Annual General Meeting of the Company.

CAUTIONARY STATEMENT

Certain Statements in the Management Discussion and Analysis describing the Company''s view about the industry, expectations/predictions, objectives etc. may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those implied therein. Important factors that could make a difference include raw material availability and prices, demand and pricing in the Company''s principal markets, changes in Government regulations, tax regimes, industrial relations and economic developments within India and countries with which the Company conducts business and other incidental factors.

APPRECIATION

Your Directors place on record their deep appreciation of the continued support and guidance provided by Central and State Government and all Regulatory bodies.

Your Directors offer their heartiest thanks to the esteemed shareholders, customers, business associates, Financial Institutions and Commercial Banks for the faith reposed by them in the Company and its management.

Your Directors place on record their deep appreciation of the dedication and commitment of Company''s officers and employees at all levels and look forward to their continued support in future as well.

For and on behalf of the Board of Directors Place : Kolkata SURENDRA KUMA LOYALKA Dated : 14th August, 2014 Chairman-cum-Managing Director


Mar 31, 2013

The Directors have pleasure to present the 31st Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS

(Rs. in lacs)

Current Previous Year ended Year ended 31.03.2013 31.03.2012

Turnover and other Income 29032.67 27599.38

Profit before Depreciation and Tax 765.62 554.02

Depreciation 649.80 631.46

Profit before Tax 115.82 (77.44)

Income Tax for earlier years (0.48) 8.58

116.30 (68.86)

Tax Expenses ( Current & Deferred) 32.68 (34.53)

Net Profit After Tax 83.62 (34.33)

Add: Surplus Brought Forward 3763.60 3797.93

Surplus Carried to Balance Sheet 3847.22 3763.60

OPERATIONAL REVIEW AND FUTURE OUTLOOK

The sales have increased to Rs. 27014.04 lacs against Rs. 25487.58 lacs in the previous year, an increase of 5.99%. The Company has achieved profit before tax of Rs. 115.82 lacs as against loss of Rs. 77.44 lacs in the previous year. The Net profit after Tax (including deferred tax) has increased to Rs. 83.63 lacs as against loss of Rs. 34.33 lacs in the previous year.

WEAVING DIVISION

Due to recovery in USA which has been our main & focus market of silk products, sales have increased. However, high fluctuation in raw silk prices in the international market and increase in cost of materials & expenses in the domestic market during the year under review has seriously affected the bottom lines of the division.

SPINNING DIVISION

Increase in the price of raw cotton, high power, labour & infrastructural cost have adversely affected the bottom line of the division. Turbulence & slowdown in larger economies like USA & Europe has seriously affected sales of the division.

EXPANSION PROJECT

WEAVING DIVISION

To meet the increasing demand of velvet fabrics one no. of Wireflex Velvet loom has been installed by the Company at its Weaving Division at Nanjangud Mysore during the year under review. Our efforts are to import more good quality looms in future to cater growing export markets.

SPINNING DIVISION

No major expansion project was initiated by the Company at its Spinning Division at Dholka, Ahmedabad due to the moribund condition of textile industry.

DIVIDEND

To conserve the resources of the Company, the Board of Directors do not recommend any dividend for this year also.

FINANCE

The Company has not taken any term loan during the year. However, outstanding installments against the existing term loan have been paid.

PARTICULARS OF EMPLOYEES

There was no employee drawing salary in excess of the limits as prescribed under section 217(2A) of the Companies Act, 1956. Hence, information required to be given under the said section read with companies (Particulars of employees) rules, 1975 as amended has not been provided in this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars in respect of conservation of energy and technology absorption are given in annexure "A" forming part of this report pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 .

CORPORATE GOVERNANCE

Your Company complies with all the mandatory requirements pertaining to Corporate Governance, in terms of revised Clause 49 of the Listing Agreement with the Stock Exchanges. A detailed report on Corporate Governance along with a copy of certificate from statutory auditors regarding compliance of conditions on corporate governance is annexed thereto.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your directors hereby confirm that:

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

II] 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 as at 31st March, 2013 and profit and loss for the year ended on that day;

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

IV] the Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as required under Clause 49(IV)(F) is disclosed separately in this report.

DEPOSITS

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits rules) 1975, the Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. B. R. Loyalka & Mr. V. K. Loyalka resigned from the Board of Directors of the Company w.e.f. 25.06.2012 & 29.08.2012, respectively.

The following Directors retire by rotation and being eligible, offer themselves for reappointment:

a) Mr. S. K. Loyalka &

b) Mr. M. L. Jain

AUDITORS

M/s. Tewari & Co., Chartered Accountants, who are the Statutory Auditors of the Company retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The retiring Auditors have furnished a certificate of their eligibility for re-appointment with the provisions of section 224(1B) of the Companies Act, 1956 and have indicated their willingness to be re-appointed.

Your Directors request you to appoint the existing auditors as statutory auditors for the current year also.

AUDITOR''S QUALIFICATION AND MANAGEMENT REPLY

AUDITOR''S QUALIFICATION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; subject to Note No. 23.12, regarding Non-provision of interest on "Loan to Body Corporate".

MANAGEMENT''S REPLY

No interest provided during the year in regard to Loan given to a body corporate in view of non repayment of previous dues. The Company has taken necessary step for recovery of the same. Interest will be considered in the year in which it is realized/recovered.

CAUTIONARY STATEMENT

Certain Statements in the Management Discussion and Analysis describing the Company''s view about the industry, expectations/predictions, objectives etc. may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those implied therein. Important factors that could make a difference include raw material availability and prices, demand and pricing in the Company''s principal markets, changes in Government regulations, tax regimes, industrial relations and economic developments within India and countries with which the Company conducts business and other incidental factors.

APPRECIATION

Your Directors place on record their deep appreciation of the continued support and guidance provided by Central and State Government and all Regulatory bodies.

Your Directors offer their heartiest thanks to the esteemed shareholders, customers, business associates, Financial Institutions and Commercial Banks for the faith reposed by them in the Company and its management.

Your Directors place on record their deep appreciation of the dedication and commitment of Company''s officers and employees at all levels and look forward to their continued support in future as well.

For and on behalf of the Board of Directors

Place : Kolkata S. K. LOYALKA

Dated : 14th August, 2013 Chairman-cum-Managing Director


Mar 31, 2012

The Directors have pleasure to present the 30th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2012.

(Rs. in lacs)

FINANCIAL HIGHLIGHTS

Current Previous Year ended Year ended 31.03.2012 31.03.2011

Turnover and other Income 27599.38 24299.99

Profit before Depreciation and Tax 554.02 1004.95

Depreciation 631.46 640.02

Profit before Tax (77.44) 364.93

Income Tax for earlier years 8.58 -

(68.86) 364.93

Tax Expenses (Current & Deferred) (34.53) 127.13

Net Profit After Tax (34.33) 237.80

Add : Surplus Brought Forward 3797.93 3560.13

Surplus Carried to Balance Sheet 3763.60 3797.93

OPERATIONAL REVIEW AND FUTURE OUTLOOK

The sales have increased to Rs. 25487.58 lacs against Rs. 22503.46 lacs in the previous year, an increase of 13.26%. The Company has incurred loss before tax of Rs. 77.44 lacs as against profit of Rs. 364.93 lacs in the previous year. The Net Loss after Tax (including deferred tax) is Rs. 34.33 lacs as against profit of Rs. 237.80 lacs in the previous year.

WEAVING DIVISION

Due to slowdown of European economy, the sales & profitability was under stress. However due to recovery in USA, we were able to maintain sales and reduce our financial losses compared to last year. High fluctuation in the price of raw silk in the international market and other commodity during the year under review has seriously affected the bottom lines of the division.

SPINNING DIVISION

High volatility in the price of raw cotton, ban on export of cotton yarn by the Govt., high power, labour & infrastuctural cost has adversely affected the bottom line of the division. We are exploring the new markets, which would give us a better turnover and profit margin.

EXPANSION PROJECT

WEAVING DIVISION

No major expansion project was initiated by the Company at its Weaving division at Nanjangud, Mysore during the year under review. However arrangements are being made to import good quality looms to cope up the additional requirement of velvet fabrics.

SPINNING DIVISION

The Company has installed further 1872 nos. of spindles and some other ancillary machines during the year under review to meet the additional demand of yarn from USA and other continent.

DIVIDEND

Due to adverse results for the year under review, the Board of Directors do not recommend any dividend for this year.

FINANCE

The Company has not taken any term loan during the year. However, installments against the existing term loans are being paid regularly.

PARTICULARS OF EMPLOYEES

There was no employee drawing salary in excess of the limits as presecribed under Section 217(2A) of the Companies Act, 1956. Hence, information required to be given under the said section read with Companies (Particulars of Employees) Rules, 1975, as amended has not been provided in this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars in respect of conservation of energy and technology absorption are given in annexure 'A' forming part of this report pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

CORPORATE GOVERNANCE

Your Company complies with all the mandatory requirements pertaining to Corporate Governance, in terms of revised Clause 49 of the Listing Agreement with the Stock Exchanges. A detailed report on Corporate Governance along with a copy of certificate from the Statutory Auditors regarding compliance of conditions on Corporate Governance is annexed thereto.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your directors hereby confirm that :

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

II] 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 as at 31st March, 2012 and profit and loss for the year ended on that day;

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

IV] the Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as required under Clause 49(IV)(F) is disclosed separately in this report. DEPOSITS

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits rules) 1975, the Company has not accepted any fixed deposits during the year under review.

DIRECTORS

Mr. B. R. Loyalka resigned from the Board of Directors of the Company w.e.f. 25.06.2012 on ground of advance age.

Mr. Devendra Kumar Sarawgee was appointed as an Additional Director on the Board of Directors of the Company w.e.f. 10.12.2011. He ceases to be a Director on the date of 30th Annual General Meeting. Notice u/s. 257 of the Companies Act, 1956 has been received in respect of his appointment as a Director on the Board.

The following Directors retire by rotation and being eligible, offer themselves for reappointment :

a) Mr. R. K. Loyalka

b) Mr. M. M. Bhagat

AUDITORS

The observations made in the Auditors' Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Companies Act, 1956.

Your Directors request you to appoint the existing auditors as statutory auditors for the current year also.

CAUTIONARY STATEMENT

Certain Statements in the Management Discussion and Analysis describing the Company's view about the industry, expectations/predictions, objectives etc. may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those implied therein. Important factors that could make a difference include raw materials availability and prices, demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, industrial relations and economic developments within India and countries with which the Company conducts business and other incidental factors.

APPRECIATION

Your Directors place on record their deep appreciation of the continued support and guidance provided by Central and State Government and all Regulatory bodies.

Your Directors offer their heartiest thanks to the esteemed shareholders, customers, business associates, Financial Institutions and Commercial Banks for the faith reposed by them in the Company and its management.

Your Directors place on record their deep appreciation of the dedication and commitment of Company's officers and employees at all levels and look forward to their continued support in future as well.

For and on behalf of the Board of Directors

S. K. LOYALKA

Chairman-cum-Managing Director

Place : Kolkata

Dated : August 13th, 2012



 
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