Directors Report of Hind Syntex Ltd.

Mar 31, 2015

Dear Members,

The Directors of your Company have pleasure in presenting the 34th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the financial yearended 31st March, 2015.

FINANCIAL RESULTS:

The Financial Results for the year are as under:- (Rs in Lac)

2014-2015 2013-2014 PARTICULARS (6 Months)

Revenue from operations (Net) 3826.21 2404.79

Profit before Depreciation, Interests Tax (PBDIT) 76.60 (55.33)

Less: lnterest& Financial expenses - 7.96

Profit/(Loss) before Depreciations Tax (PBDT) 76.60 (63.29)

Less: Depreciation 57.16 114.88

Profit / (Loss) before tax 19.44 (178.17)

DIVIDEND

Your Directors regret their inability to propose any dividend with a view to strengthen the financial position by way of retaining the earnings for the business operations of the Company.

RESERVES

No amount, which the Board proposes to carry to any reserves.

WORKING OF THE COMPANY: OPERATIONS

During the year your Company has achieved a turnover of Rs. 3826.21 Lac and earned a profit of Rs.19.44 Lac. There has been no change in the nature of business of your Company during the financial year 2014-15.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which set out the principle of running the Company with fairness, transparency and accountability. Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Statutory Auditors of the Company M/s. V. Singhi & Associates, Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

LISTING

The shares of your Company are listed at the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd. The applicable annual listing fees for the year 2015-16 have been paid to the stock exchanges before the due date.

PUBLIC DEPOSIT

The Company has not accepted any public deposits during the financial year 2014-15, in terms of chapter - V of the Companies Act, 2013 and as such, no amount on account of principal and interest was outstanding as on the date of Balance Sheet.

CORPOARTE SOCIAL RESPONSIBILITY

The provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company.

DIRECTORS

In accordance with the provisions of Companies Act, 2013 Shri Alok Krishna Agarwal, Non-Executive Director retire by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment.

At the 33rd Annual General Meeting of the Company held on 27th September, 2014 the Company had appointed Smt. Shailja Haldia as Independent Director as per provisions of Section 149 and other applicable provisions of the Companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 38th Annual General Meeting and will not be liable to retire by rotation during her term of 5 years.

Shri M. P. Rajan, Shri V. S. Crishna, were appointed as Independent Directors under erstwhile Companies Act, 1956 for a period of 5 consecutive years from the date of appointment as Independent Director i.e. December 6, 2013 upto December 5, 2018 and will not be liable to retire by rotation during their term of 5 years. Mr. Umesh Wamorkar, Nominee Director, resigned from the Company w.e.f. 03.06.2014.

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(7)

The independent Directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in Sub Section (6).

The Independent Directors have confirmed and declared that they are not dis-qualified to act as an Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 and the' Board is also of the opinion that the Independent Directors fulfils all the conditions specified in the Companies Act, 2013 making them eligible to act as independent Directors.

KEY MANAGERIAL PERSONNEL

The following persons were formally appointed as Key Managerial Personnel (KMP) of the Company effective from August 4,2014 in compliance with the provisions of section 203 of the Companies Act, 2013:

1. Shri Balesh Kumar Bagree, Chief Financial Officer

2. Ms. Nidhi Binnani, Company Secretary

Shri Vilas Agrawal continues to be the Whole-time Director of the Company.

ANNUAL EVALUATION

In compliance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance evaluation of the Board and that of its Committees and individual directors was carried out during the year under review. The Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

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

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 and clause 49(lll)(D)(4)(a) of the listing agreement with Stock Exchange in the preparation of the annual accounts for the year ended on March 31,2015, it is hereby confirmed:

i) That in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That the selected accounting policies were applied consistently and the Directors 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 period and of the profit and loss amount of the Company for the same period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act ,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) the annual accounts have been prepared on a going concern basis;

v) the internal financial controls have been laid down and such internal financial controls adequate and were operating effectively; and

vi) the Company has adequate internal systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

INTERNAL CONTROL SYSTEM ,

The company has a proper and adequate system of internal control to ensure that all assets are safeguarded, and protected against loss from unauthorized use or disposition, and that all transactions are properly authorized, recorded and reported correctly to the management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the Company.

RISK MANAGEMENT

The Company has laid down well defined risk management mechanism covering the risk exposure, potential impact and risk mitigation process. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined frame work.

In line with the new regulatory requirements, the Directors of the Company has formally framed a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure.

STATUTORY AUDITORS

The Satatutory Auditors, M/s. V. Singhi & Associates, Chartered Accountants, Kolkata will retire at the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment as Statutory Auditors for the financial year 2015-16.

AUDITORS'REPORT

The Statutory Auditors of the Company have submitted Auditors' Report on the accounts of the Company for the financial year ended March 31,2015. The Notes on financial statement referred to in the Auditors' Report are self- explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

M/s. Nupur Jain & Company, Cost Accountant, were re- appointed as Cost Auditors of the Company to conduct cost audit of the accountants maintained by the company for the financial year 2014-15. The cost Audit report for the 6 months period ended on March 31,2014 was submitted on March 31,2014 vide SRN S29825858 in Form I- XBRL . The cost audit report for the year ended on March 31,2015, will be submitted before the due dates as prescribed by Law.

SECRETARIAL AUDIT REPORT

The Board of Directors of the Company has appointed Shri Ashish Nayak, Practicing Company Secretary, as "Secretarial Auditor" of the Company to conduct Secretarial Audit for the financial year ended March 31,2015, pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

The Secretarial Audit Report submitted by Shri Ashish Nayak, a Company Secretary in practice in prescribed form MR-3 is enclosed as a part of this report as" Annexure-A". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

DISCLOSURES UNDER THE COMPANIES ACT, 2013

i) EXTRACT OF ANNUAL RETURN U/S 92(3) ,

The details forming part of the extract of the Annual return in Form MGT-9 is enclosed as " Annexure - B"

ii) NUMBER OF BOARD MEETINGS

The Board of Directors met 4 (four) times in the financial year ended 31st March, 2015. The details of the Board meeting and the attendance of the Directors are provided in the Corporate Governance Report.

iii) RELATED PARTY TRANSACTIONS

Related party transactions that were entered during the financial year were on arm's length basis and were in the ordinary course of business and are in compliance with the applicable provisions of the Act and the listing agreement. Flowever, there were material related party transactions in terms of clause

49 of the listing agreement in respect of which necessary disclosures and compliance has been made by your Company. There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or their relatives, which could have had a potential conflict with the interests of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for their approval.

For details of transactions with the related parties please refer Note 29 to the financial statement.

Particulars of contracts or arrangements entered during the year is enclosed in "Annexure-C" as Form AOC-2.

iv) COMPOSITION OF AUDIT COMMITTEE

The Board has re-constituted the Audit Committee which comprises of Shri M.P. Rajan, as the Chairman, Shri V. S. Crishna and Shri Vilas Agrawal, as the members. All the recommendations made by the Audit Committee were accepted by the Board of Directors. More details on the Committee are given in the Corporate Governance Report.

V) 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. In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. This policy is explained in Corporate Governance Report.

VI) There were no material changes and commitments affecting the financial position of the Company occurring between 31st March, 2015 and the date of this Report.

VII) There is no change in the business of the Company.

VIII) There were no significant and material orders passed by regulators or courts or tribunals impacting the growing concern status and Company's operation in future.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE

COMPANIES ACT, 2013

For operationai betterment, it is imperative to invest in modernization and upgradation of the Company's production facilities. In absence of definite line of credit to your Company for such capital investment, your Company has agreed to the proposal of M/s. Wearit Global Ltd. (WGL) of providing corporate guarantee to its consortium bankers for raising credit assistance for capital expenditure as well as to fund the working capital requirement of your Company in a mutually benefitting manner. Your Company is engaged in job work arrangement with WGL and have mutually agreed to diversify in varied 'high valued' products through modernization of your Company's production facility. Fience in the interest of the Company and acknowledging the rationality of the arrangement, your Company has given Corporate Guarantee to the consortium bankers of WGL on terms and conditions which are not prejudicial to the interest of your Company and is in adherence to the applicable provision of the Companies Act, 2013. However, in the process, the amount of guarantee provided has marginally exceeded the prescribed limits for which your Company has taken all necessary steps for ratifying the same in the ensuing Annual Genera! Meeting of the Company.

PARTICULARS OF EMPLOYEES

The information required pursuant to section 197 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:

The company has one Whole-time Director who was appointed without any remuneration. He has voluntarily agreed to forgone remuneration due to the financial constraints being faced by the Company. Further, no sitting fees has been paid to any director during the year.

The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are:

a) Employed through out the year Nil

b) Employed for part of the year Nil

The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The prescribed particulars of Conservation of Energy, Technology Absorption and R & D activities required U/s 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are attached as"AnnexureD&E" which forms part of this Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the period, the Company has not made any export, hence the export earning is Nil. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their thanks to the Central and State Government authorities, Regulatory authorities, Stock Exchanges and Company's Bankers for the assistance, co-operation and encouragement they extended to the Company.

Your Directors also wish to place on record their appreciation for the continuing support and unstinting efforts of investors, vendors, business associates and employees in ensuring an excellent all round operational performance.

For and on behalf of the Board of Directors

Date: 30th May, 2015 (Shaiija Haldia) (Vilas Agrawal) Place: Kolkata Director Whole-time Director

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Sep 30, 2013

To the Shareholders,

The Directors present Thirty Second Annual Report together with the Audited Statements of Accounts for the period ended September 30,2013.

Operations

The total Income during the period was Rs. 17133.15 lacs. The operating results are as under:

(Rs. in lacs) 2012-2013 2011-2012 (18 Months) (12 Months)

Surplus before Interest and Depreciation 2663.06 79.04

Less: Interest 375.59 766.56

Profit/(Loss) before Depreciation 2287.47 (687.52)

Less: Depreciation 470.57 363.46

Add:Tax expenses of earlier year 13.85 (7.24)

Net Profit/(Loss) 1803.05 (1058.22)

Change in Accounting Year:

In order to One Time Settlement (OTS) and change in management, also for administrative convenience, your Company has decided to extend its financial year from March 31 to September 30, 2013 i.e. April 1, 2013 to September 30, 2013. Accordingly, the Accounts for the year under review have been compiled for the 18 month period ended September 30, 2013. The figures in respect of the previous year, however, relate to 12 months ended March 31, 2012, and hence are not strictly comparable. Dividend

In the absence of profits, your Directors regret their inability to propose any dividend. Working of the Company Birgod:

Lenders, have sold surplus Plant & Machinery including Power House by E-auction through MSTC Ltd to the highest bidder. The lenders directly sold Land & Building and the sale proceeds had distributed among Lenders. Now the Company has only one unit at Pillukhedi. Pillukhedi:

Presently the company has unit at Pilukhedi in operation. Company has entered into Job Wok with Wearit Global Limited, Kolkata and 3178.95 M.T job work done.The total turnover was k 14874.72 lacs. During the period the company made direct export of yarn Rs. 584.45 lacs Finance

Company has arrived at a one time settlement(OTS) of the dues (Principal togetherthe outstanding interest) with its lenders viz. Asset Reconstruction Company (India) Ltd.. (ARCIL), Bank of India, IDBI Bank, Union Bank of India and State Bank of India with cut off date as September 30, 2012, the terms of settlement also stipulate transfer for management of new promoter and OTS approvals from the above Banks/Institutions as received and process of change in management has taken place on March 23,2013. Public Deposit

Your Company has not accepted any public deposits and as such no amount of principal and interest was outstanding as on the date of Balance Sheet. Directors

Shri Manohar Keshav, Shri Ravi Mohan, Shri G. S. Chopra have resigned from the directorship of the Company and Shri Manish Kumar, Shri M.P.Rajan, Shri V.S. Crishna and Shri Vilas Agrawal have joined as additional Directors of the Company on March 23,2013, due to OTS and change in management.

Shri S. K. Aggarwal was appointed as Nominee Director of Bank of India w.e.f. September 25, 2012, in place of ShriV. D. Nadkarni.

Shri Umesh Wamorkar was appointed as Nominee Director of Asset Reconstruction Company (India) Ltd. (ARCIL) w.e.f. September 20,2012.

Shri Chandra Mohan has resigned from the Board as director w.e.f. January 17,2013.

Shri S. L. Moondhra, has resigned from the Board as Whole time Director, designated as Senior Executive Director w.e.f. May31,2013.

Shri VilasAgrawal, appointed as Whole time director under section 269 of the Companies Act, 1956, w.e.f. July 31,2013. Shri Alok Krishan Agarwal, has appointed asAdditional Director, w.e.f. July 31,2013.

Particulars of Employees

There is no employee coming within the provisions as required under Section 217(2A) of the Companies act, 1956, read with the Companies (Particulars of Employees) Rules, 1975. Conservation of Energy

In terms of Section 217 (1) (e) of the Companies Act, 1956 the Companies (disclosure of particulars in respect of Board of Directors), Rules 1988 additional information regarding Energy Conservation, Technology Absorption and R&D activities, are given in (AnnexureA& B) forming part of this report. Foreign Exchange Earnings and Outgo ¦ During the year, the Company was able to actualize export earnings ofRs. 760.99 lacs on F.O.B. realisation basis. The total foreign exchange outgo, during the year amounted to Rs. 25.42 lacs for payment of commission on export sales. The particulars of foreign exchange earned / utilised during the period are given in note 35 D & F of the accounts. Corporate Governance Report

A separate report on Corporate Governance is furnished as a part of the Annual Report and the certificate from the Company''s Auditors regarding compliance with the said Code annexed to the said Report. Directors''Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement on the basis of the information made available to the Directors, it is hereby confirmed: i) That in the preparation of the accounts for the financial period ended September 30,2013, 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 were 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 period and of the profit or loss of the Company forthe period under review; 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, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) That the Directors have prepared the accounts for the financial period ended September 30,2013, on a ''going concern''

basis. Auditors

Messers Bansi S. Mehta & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Shri Y. S. Tibrewala, Cost Accountant, was appointed on SRN S08784282 dated June 12, 2012 as Cost Auditors of the Company to conduct the cost audit for the period ending on September 30,2013 (18 months period). The cost Audit report forthe period ended March 31,2012 was submitted on December 31,2012 vide SRN S19698695 in Form l-XBRL. The cost audit report forthe period ended on September 30,2013 will be submitted before the due dates as prescribed by the Law.

On the basis of technical opinion, the Company continues to treat plant and machinery as continuous process plant, which is required and designed to operate 24 hours a day. Consequently depreciation has been charged at the rate pursuant to notification GSR No: 756E dated December 16, 1993 on straight line method, as continuous process plant. In respect of observations in the Auditor''s report pertaining to depreciation charged on Plant & Machinery, the Company continues to treat on the basis of technical opinion all plant & machinery as continuous process plant, which is required and designed to . operate 24 hours a day. The other observations in the Auditors'' Report with regard to employees benefits, Impairment of Assets are dealt with in the notes to the accounts at appropriate place and are self explanatory.

Your Directors wish to place on record their appreciation to the team of dedicated executives and employees, who have shown devotion to their duties.

We thank the various Departments of Central & State Governments, and Financial Institutions, viz. Assets Reconstruction Company (India) Limited (ARCIL), Bank of India, Union Bank of India, State Bank of India, IDBI Ltd. and HDFC Bankfortheir , continued support to your Company.

On behalf of the Board,

Kolkata Manish Kumar Vilas Agrawal

Dated: October28,2013 Director Wholetime Director

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Mar 31, 2012

The Directors present Thirty First Annual Report together with the Audited Statements of Accounts for the year ended March 31, 2012.

Operations

The total Income during the year was Rs. 11579.50 lacs. The operating results are as under:

(Rs. in lacs)

2011-2012 2010-2011

Surplus before Interest and Depreciation 79.04 864.11

Less: Interest 766.56 720.47

Profit / (Loss) before Depreciation (687.52) 143.64

Less: Depreciation 363.46 370.69

Net Profit / (Loss) (1050.98) (227.05)

Dividend

In the absence of profits, your Directors regret their inability to propose any dividend.

Working of the Company

Birgod

As directed by lenders, the surplus Plant & Machinery excluding Power House was sold by E-auction through MSTC Ltd to the highest bidder. The sale of Land & Building and Power House is under process through E-aution, as per the revised valuation report obtained by lenders.

Pillukhedi

Presently the Company has 28,800 spindles in operation, operation of further spindles can be increased to 41,424 in stages. Due to working capital constrains, the installed capacity remains unutilized. In order to have viability of the unit, debt burden has to be reduced substantially by the lenders. The volatility of raw material prices, increase in power & labour cost coupled with tight finance has resulted in to losses.

The turnover was Rs. 11420.18 lacs (previous year Rs. 10576.51 lacs). During the year the Company made direct export of yarn Rs. 773.33 lacs (Previous year f 1696.18 lacs).

Finance

Company is paying interest on Working Capital with effect from January, 2011 and has paid Rs. 1,24,50,159 till

March,2012.

Out of the sale proceeds of surplus Plant & Machinery and electrical installation of Birgod Unit, Bank of India has recovered Rs. 220.00 lacs alongwith interest, as per the terms of loan of Rs. 220.00 lacs, which was disbursed to the Company towards labour dues.

Public Deposit

Your Company has not accepted any public deposits and as such no amount of principal and interest was outstanding as on the date of Balance Sheet.

Directors

Shri Ravi Mohan and Shri Chandra Mohan, retire by rotation at the ensuing Annual General Meeting, and are eligible for reappointment.

Ban« of India has appointed Shri V D Nadkarni in place of Shri M V Venkateswaran as nominee w.e.f. January 17, 2012.

Particulars of Employees

There is no employee coming within the provisions as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees ) Rules, 1975.

Conservation of Energy

In terms of Section 217 (1) (e) of the Companies Act, 1956 the Companies (disclosure of particulars in respect of Board of Directors), Rules 1988 additional information regarding Energy Conservation, Technology Absorption and R&D activities, are given in (Annexure A & B) farming part of this report.

Foreign Exchange Earnings and Outgo

During the year, the Company was able to actualize export earnings of Rs. 690.15 lacs on F.O.B. realisation basis.

The total foreign exchange outgo, during the year amounted to Rs. 29.91 lacs for payment of commission on export sales. The particulars of foreign exchange earned / utilised during the year are given in Note 37 D & F to the accounts.

Corporate Governance Report

A separate report on Corporate Governance is furnished as a part of the Annual Report and the certificate from the Company's Auditors regarding compliance with the said Code annexed to the said Report.

Directors' Responsibility Statement

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

i) That in the preparation of the accounts for the financial year ended March 31, 2012, 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 were 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 the year under review;

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, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

Auditors

Messers Bansi S. Mehta & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Shri Y S Tibrewala, Cost Accountant, was appointed vide SRN S05771282 dated August 29, 2011 as Cost Auditors of the Company to conduct the cost audit for the year ending on March 31, 2012. The cost Audit report for the year ended March 31, 2011 was submitted on August 29, 2011. The cost audit report for the year ended on March 31, 2012 will be submitted before the due dates as prescribed by the Law.

On the basis of technical opinion, the Company continues to treat plant and machinery as continuous process plant, which is required and designed to operate 24 hours a day. Consequently depreciation has been charged at the rate pursuant to notification GSR No: 756E dated December 16, 1993 on straight line method, as continuous process plant. In respect of observations in the Auditor's report pertaining to depreciation charged on Plant & Machinery, the Company continues to treat on the basis of technical opinion all plant & machinery as continuous process plant, which is required and designed to operate 24 hours a day. The other observations in the Auditors' Report with regard to employees benefits, Impairment of Assets are dealt with in the notes to the accounts at appropriate place and are self explanatory. Your Directors wish to place on record their appreciation to the team of dedicated executives and employees, who have shown devotion to their duties.

We thank the various Departments of Central & State Governments, and Financial Institutions, viz. Assets Reconstruction Company (India) Limited (ARCIL), Bank of India, Union Bank of India, State Bank of India and IDBI Bank Ltd., for their continued support to your Company.

On behalf of the Board,

Pillukhedi Manohar Keshav S L Moondhra

Dated: May 25,2012 Director Senior Executive Director

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Mar 31, 2011

To the Shareholders,

The Directors present Thirtieth Annual Report together with the Audited Statements of Accounts for the year ended March 31, 2011.

Operations

The total Income during the year was Rs. 11158.40 lacs. The operating results are as under:

(Rs. in lacs)

2010-2011 2009-2010

Surplus before Interest and Depreciation 820.63 275.38

Less: Interest 676.99 652.53

Profit / (Loss) before Depreciation 143.64 (377.15)

Less: Depreciation 370.69 379.71

Profit / (Loss) before Tax (227.05) (756.86)

Less: Tax Expenses - -

(227.05) (756.86)

Add : Deferred Tax - 22.00

Net Profit / (Loss) after Tax (227.05) (734.86)

Dividend

In the absence of profits, your Directors regret their inability to propose any dividend.

Increase In Share Capital

During the year 2010-11, the Company issued 18,40,000 equity shares of Rs. 10/- each at par, amounting to Rs. 1,84,00,000/- to Asset Reconstruction Company (India) Ltd., towards conversion of Term Loan as per the conversion option pursuant to the CDR scheme approval dated January 6,2005.

The Board of Directors, its board meeting held on August 9, 2010 have approved the above allotment, pursuant to Article 13(c) of Article of Association of the Company and Section 81(3) of the Companies Act,1956.

Working of the Company

Birgod

As advised by lenders, the surplus machineries alongwith land and building will now be sold by auction though MSTC Ltd. for which valuation of plant and machinery has been obtained afresh by lenders.

Pillukhedi

Presently the Company has 30,384 spindles in operation, the operation of spindleage will gradually increase to 41,424 in stages subject to approval of Comprehensive restructuring proposal under CDR package submitted to Bank of India on April 22, 2010. Looking to the viability of Pillukhedi unit, debt burden has to be reduced substantially as per the scheme.

During the year the basic price of Polyester and Viscose Fibre has increased by approx. 60% and 30% respectively, which the company has been able to gradually pass on to its customers. With effect from April 1, 2011, the minimum wages has further increased by Rs. 250/- per worker per month by Madhya Pradesh Government. The impact of the increase in wages and benefits will be around Rs. 3.00 lacs per month.

The gross turnover was Rs. 10578.32 lacs (previous year Rs. 7355.11 lacs) During the year the Company made direct export of yarn Rs. 1696.18 lacs (previous year Rs. 1155.97 lacs).

Finance

As advised by lenders, the Company has submitted revised comprehensive restructuring scheme under CDR package for their approval.

As envisaged in the revised comprehensive plan for Restructuring under CDR Package, the company has started paying interest on Working Capital from January, 2011 and it has paid amounting to Rs. 24,57,268/- to all Working Capital bankers during January, 2011 to March,2011.

Public Deposit

Your Company has not accepted any public deposits and as such no amount of principal and interest was outstanding as on the date of Balance Sheet.

Directors

Shri Manohar Keshav and Shri G S Chopra, retire by rotation at the ensuing Annual General Meeting, and are eligible for reappointment.

Bank of India has appointed Shri M V Venkateswaran in place of Shri P D Upadhye as nominee w.e.f. October 16, 2010. Shri Manoj Maheshwari has resigned from the Directorship of the Company w.e.f. February 16, 2011.

Particulars of Employees

There is no employee coming within the provisions as required under Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules,1975.

Conservation of Energy

In terms of Section 217 (1) (e) of the Companies Act, 1956 the Companies (disclosure of particulars in respect of Board of Directors), Rules 1988 additional information regarding Energy Conservation, Technology Absorption and R & D activities, are given in (Annexure A & B) forming part of this report.

Foreign Exchange Earnings and Outgo

During the year, the Company was able to actualize export earnings of Rs. 1645.34 lacs on F.O.B. realisation basis. The total foreign exchange outgo, during the year amounted to Rs. 48.19 lacs for payment of commission on export sales. The particulars of foreign exchange earned / utilised during the year are given in Schedule 15 to the accounts.

Corporate Governance Report

A separate report on Corporate Governance is furnished as a part of the Annual Report and the certificate from the Company's Auditors regarding compliance with the said Code annexed to the said Report.

Directors' Responsibility Statement

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

i) That in the preparation of the accounts for the financial year ended March 31, 2011, 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 were 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 the year under review;

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, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended March 31, 2011 on a 'going concern' basis.

Auditors

Messers Bansi S. Mehta & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Shri Y S Tibrewala, Cost Accountant, was appointed on July 9, 2010 as Cost Auditors of the Company to conduct the cost audit for the year ending on March 31, 2011 and has submitted the cost Audit report for the year ended March 31, 2010 on August 19,2010. The cost audit report for the year ended on March 31,2011 will be submitted before the due dates as prescribed by the Law.

On the basis of technical opinion, the Company continues to treat plant and machinery as continuous process plant, which is required and designed to operate 24 hours a day. Consequently depreciation has been charged at the rate pursuant to notification GSR No: 756E dated December 16, 1993 on straight line method, as continuous process plant. In respect of observations in the Auditor's report pertaining to depreciation charged on Plant & Machinery, the Company continues to treat on the basis of technical opinion all plant & machinery as continuous process plant, which is required and designed to operate 24 hours a day. The other observations in the Auditors' Report with regard to employees benefits, Impairment of Assets are dealt with in the notes to the accounts at appropriate place and are self explanatory.

Your Directors wish to place on record their appreciation to the team of dedicated executives and employees, who have shown devotion to their duties.

We thank the various Departments of Central & State Governments, and Financial Institutions, viz. Asset Reconstruction Company (India) Limited (ARCIL), Bank of India, Union Bank of India, State Bank of India and IDBI Bank Ltd., for their continued support to your Company.

On behalf of the Board,



Dewas Ravi Mohan S L Moondhra Dated: June 24, 2011 Director Senior Executive Director

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Mar 31, 2010

The Directors present Twenty Ninth Annual Report together with the Audited Statements of Accounts for the year ended March 31, 2010.

Operations

The total Income during the year was Rs.7242.79 lacs. The operating results are as under:

(Rs. in lacs)

2009-2010 2008-2009

Surplus before Interest and Depreciation 275.38 (140.29)

Less: Interest 652.53 573.35

Profit / (Loss) before Depreciation (377.15) (713.64)

Less: Depreciation 379.71 454.52

Profit / (Loss) before Tax (756.86) (1168.16)

Less: Provision for Taxation

Income Tax - -

Wealth Tax - -

Fringe Benefit Tax - -

(756.86) (1169.80)

Add: Deterred Tax 22.00 244.49

Net Profit/(Loss) after Tax (734.86) (925.31)

Add : Short provision for Income Tax for earlier years - 11.10

(734.86) (936.41)

Reference to BIFR

As informed earlier, Company made reference to BIFR for rehabilitation consequent to erosion of its entire net worth, the reference has not been registered by BIFR .

Dividend

In the absence of profits, your Directors regret their inability to propose any dividend.

Working of the Company Birgod

As per the the Honble Madhya Pradesh High Court order dated March 31, 2008, Company has made payment of retrenchment compensation and wages to workers of Birgod Unit, till the date of its closure i.e. March 15, 2004. 9936 spindles alongwith balancing machineries of Birgod unit have been shifted to Pillukhedi unit to consolidate the operation of the company. The surplus machineries alongwith land and building will be sold in consultation with lenders.

Pillukhedi

Presently the Company has 26,000 spindles in operation, the operation of spindleage will gradually increase to 41,000, making the unit viable. Accordingly, Company has submitted revised restructuring plan to lenders. The gross turnover was Rs 7355.11 lacs (previous year Rs.6219.27 lacs). During the year the Company made direct export of yarn Rs 1155.97 lacs (previous year Rs 545.05 lacs).

Finance

As advised by lenders, the Company has submitted revised comprehensive restructuring scheme under CDR package for their approval.

Public Deposit

Your Company has not accepted any public deposits and as such no amount of principal and interest was outstanding as on the date of Balance Sheet.

Directors

Shri Ravi Mohan and Shri Chandra Mohan, retire by rotation at the ensuing Annual General Meeting, and are eligible for reappointment.

Bank of India has appointed Mr P D Upadhye in place of Shri Vikas Pande as nominee w.e.f. September 11, 2009. Shri G S Chopra was appointed as Additional Director by the Board with effect from October 05, 2009 in accordance with Article 118 of Articles of Association of the Company and Section 260 of the Act. Shri G S Chopra holds office upto the date of forthcoming Annual General Meeting. Notice under Section 257 of the Act has been received from a members signifying his intention to propose Shri G S Chopras appointment as a Director.

The Board also reappointed Shri S L Moondhra as Whole time director, designated as Senior Executive Director with effect from March 01, 2010 for a period of three year. His reappointment and remuneration payable to him require the approval of the Central Government and Members at the ensuing Annual General Meeting.

Particulars of Employees

There is no employee coming within the provisions as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Conservation of Energy

In terms of. Section 217 (1) (e) of the Companies Act, 1956 the Companies (disclosure of particulars in respect of Board of Directors), Rules 1988 additional information regarding Energy Conservation, Technology Absorption and R&D activities, are given in (Annexure A & B) forming part of this report.

Foreign Exchange Earnings and Outgo

During the year, the Company was able to actualize export earnings of Rs.984.27 lacs on F.O.B. realisation basis. The total foreign exchange outgo, during the year amounted to Rs. 9.78 lacs for payment of commission on export sales. The particulars of foreign exchange earned / utilised during the year are given in Schedule 15 to the accounts.

Corporate Governance Report

A separate report on Corporate Governance is furnished as a part of the Annual Report and the certificate from the Companys Auditors regarding compliance with the said Code annexed to the said Report.

Directors Responsibility Statement

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

(i) That in the preparation of the accounts for the financial year ended March 31, 2010, 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 were 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 the year under review;

(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, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concern basis.

Auditors

Messers Bansi S. Mehta & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

On the basis of technical opinion, the Company continues to treat plant and machinery as continuous process plant, which is required and designed to operate 24 hours a day. Consequently depreciation has been charged at the rate pursuant to notification GSR No: 756E dated December 16,1993 on straight line method, as continuous process plant. In respect of observations in the Auditors report pertaining to depreciation charged on Plant & Machinery, the Company continues to treat on the basis of technical opinion all plant & machinery as continuous process plant, which is required and designed to operate 24 hours a day. The other observations in the Auditors Report with regard to employees benefits, Impairment of Assets are dealt with in the notes to the accounts at appropriate place and are self explanatory.

Your Directors wish to place on record their appreciation to the team of dedicated executives and employees, who have shown devotion to their duties.

We thank the various Departments of Central & State Governments, and Financial Institutions, viz. Assets Reconstruction Company (India) Limited (ARCIL), Bank of India, Union Bank of India, State Bank of India and IDBI Bank Ltd. for their continued support to your Company.

On behalf of the Board,



Dewas Ravi Mohan S L Moondhra Dated: June 29,2010 Director Senior Executive Director