Directors Report of Mahan Industries Ltd.

Mar 31, 2014

Dear Members,

The Company''s Directors are pleased to present the 20th Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2014.

FINANCIAL PERFORMANCE

The summary of the financial result of the Company for the year under review are as under:

(Rs. in Lacs)

Particulars Year Ended Year Ended March 31, 2014 March 31, 2013

Profit/( Loss) before Depreciation, (33012060) (28519764) Finance Costs and Tax, Finanace cost Less: Depreciation 28557 28560

Less: finance Costs 6546232 7564872

Profit/(Loss) before Taxation (26437271) (20926332)

Less: Taxation related to previous 6700 0 year

Net Profit / (Loss) After Tax (26443971) (20926332)

Add: Balance from previous year (194859392) (173933060) of Profit (Loss)

Balance of Profit/(Loss) carried (221303363) (194859392) to Balance Sheet

Reserves and Surplus:

The Opening balance of Profit and Loss shows a loss of Rs. 194859392/- as against (P.Y. Rs. 173933060). During the year the Company has incurred a loss of Rs. 26443971/- as against (P.Y. Rs. 20926332). The closing Balance of Profit and Loss shows a loss of Rs. 221303363/- as against (P.Y. Rs. 194859388). There is no change in Capital Reserves balance. The opening and closing balance of capital reserves stands at Rs. 90.00 lacs.

PERFORMANCE REVIEW

During the financial year 2013-14, the volatility in the macroeconomic environment continued to cast its shadow and affected most of the markets where your Company operates in.

During the year under review, the Company due to International recessionary condition, high interest rates, heavy inflationary pressure, heavy Competition in the market and presence of large

Market players dominating the Market has suffered adversely.

DIVIDEND

Your Directors regret their inability to recommend Dividend for the year under review.

CHANGE IN CAPITAL STRUCTURE

There is no change in the capital structure of the Company.

CODE OF CONDUCT

Pursuant to the provisions of Clause 49(1)(D) of the Listing Agreement, your Company has laid down a Code of Conduct for its Board Members and Senior Management Personnel. All the Directors and the Senior Management Personnel have affirmed compliance with the said Code of Conduct. A declaration regarding compliance by Board Members and Senior Management Personnel with the Code of Conduct for the year ended March 31, 2014 is annexed to this Report.

PUBLIC DEPOSITS

The Company has not invited or accepted any public Deposits in accordance with the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 during the year under review.

DEPOSITORY SYSTEM

Members not having Shares in Dematerialized form are advised to avail the facility of Dematerialization through any of the nearest Depository Participants (DPs) to avoid the possibility of loss, mutilation ect, of share certificates and also to ensure safe and speedy transactions in the securities.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary Company within the meaning of Section 4 of the Companies Act, 1956.

DIRECTORS

The Board of Directors'' key purpose is to ensure the company''s prosperity by collectively directing the company''s affairs, whilst meeting the appropriate interests of its Shareholders and stakeholders.

The Board consists of a combination of Executive, Non - Executive and Independent Directors with an extensive and diverse experience in different fields of operations.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and rules made thereunder and pursuant to provision of Article 43 of the Articles of Association of the Company, Mr. Dattatrey Chandrakant Manik and Mr. Bharatbhai Tapubhai Sanchala, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for their re-appointment.

Your Directors recommended their re-appointment at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

a) in the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and that no material departures are made from the same;

b) the Directors have selected such accounting policies and applied consistently and judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2014 and of the Loss of the Company for the period ended on that date;

c) 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;

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

AUDITORS AND AUDITORS'' REPORT

The Company has received a notice from a member of the Company proposing M/s. N. B. & Associates., (Firm Registrtion No. 137865W) as the Statutory auditors of the Company in place of M/s. DJVN & Company, Chartered Accountants.

M/s. N. B. & Associates., (Firm Registrtion No. 137865W) statutory auditors, if appointed, shall hold office from the conclusion of the ensuing annual general meeting until the conclusion of next annual general meeting. The Company has also received an eligibility certificate from M/s. N.B.& Associates.,, that they are eligible for the appointment of auditors and also stating that their appointment if made will be within the limits prescribed under the provisions of the Companies Act, 2013 and the rules made thereunder.

There is no qualification or adverse remarks in the auditors report. The Notes on Accounts referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

AUDIT COMMITTEE

The Company has duly constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 & Clause 49 of the Listing Agreement.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the Company has no employee with a remuneration during the year under review, which taken in aggregate was equal to or more than the sum prescribed under the said provisions.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Management''s Discussion and Analysis on Company''s performance - industry trends and other material changes with respect to the Company pursuant to Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Exchange. The Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

LISTING FEES:

The Company has paid necessary listing fees of the Bombay Stock Exchange for the year 2013 - 2014. The Company will also pay necessary listing fees of Bombay Stock Exchange for the year 2014-2015.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO

The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 217 (1) (e) of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence are not provided.

MATERIAL EVENTS AND COMMITMENTS, IF ANY SUBSEQUENT TO BALANCE SHEET DATE :

There are no material events and commitments, if any, which may have adverse effect on the operations of the Company subsequent to the Balance Sheet date and upto the date of the report.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank all investors, customers, vendors, bankers, financial institutions, Service Providers, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.

By the Order of the board Date: 30th August, 2014 Place: Ahmedabad Chairman cum Director

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Mar 31, 2013

The Company''s Directors are pleased to present the 19th Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2013.

FINANCIAL PERFORMANCE

The summary of the nnancial result of the Company for the year under review are as under:

(Rs. in Lacs)

Particulars Year Ended M arch 31, Year Ended March 31, 2013 2012

Profit/( Loss) beare Depreciation and Tax (20897771) (103463078)

Less: Depreciatio 28557 32784

Profit/ ( Loss} bei 3re Taxation (20926328) (103495862)

Less: Provision fcr Taxation

Net Profit / (Loss After Tax (20926328) (103495862)

Add: Balance fron previous year (173933060) (70437196)

Balance carried Balance Sheet (194859388) (1739330607)

Reserves and Surplus:

The Opening balane of Profit and Loss shows a loss of Rs. 173933060. During the year the Company has incuri ed a loss of Rs. 20926328. The closing Balance of Profit and Loss shows a loss of L Rs. 194859388/-. rl here is no change in Capital Reserves balance. The opening and closing balance ¦ of capital reserves s ands at Rs. 90.00 lacs. I

PERFORMANCE REVIEW I

During the financial year 2012-13, the volatility in the macroeconomic environment continued to cast its shadow and affected most of the markets where your Company operates in.

During the year under review, the Company due to International recessionary condition, high interest rates, heavy inflationary pressure, heavy Competition in the market and presence of large Market players dominating the Market has suffered adversely, resulting in a Gross Loss of Rs. ! 20926328/- in the year 2012-2013 as against the Gross Loss of Rs 103495862/- in the year 2011 -2012.

DIVIDEND

Your Directors regret their inability to recommend Dividend for the year under review in the absence of adequate Profit.

CHANGE IN CAPITAL STRUCTURE

There is no change in the capital structure of the Company. CODE OF CONDUCT

Pursuant to the provisions of Clause 49(1)(D) of the Listing Agreement, your Company has laid down a Code of Conduct for its Board Members and Senior Management Personnel. All the Directors t and the Senior Management Personnel have affirmed compliance with the said Code of Conduct. A * declaration regarding compliance by Board Members and Senior Management Personnel with the Code of Conduct for the year ended March 31, 2013 is annexed to this Report.

PUBLIC DEPOSITS I

The Company has not invited or accepted any public Deposits in accordance with the provisions of I Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 I during the year under review.

DEPOSITORY SYSTEM

Members not having Shares in Dematerialized form are advised to avail the facility of Dematerialization through any of the nearest Depository Participants (DPs) to avoid the possibility |j of loss, mutilation ect, of share certificates and also to ensure safe and speedy transactions in the securities.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary Company within the meaning of Section 4 of the Companies Act, 1956.

DIRECTORS :

The Board of Directors'' key purpose is to ensure the company''s prosperity by collectively directing the company''s affairs, whilst meeting the appropriate interests of its Shareholders and stakeholders.

The Board consists of a combination of Executive, Non - Executive and Independent Directors with an extensive and diverse experience in different fields of operations. In accordance with the provisions of Section 255 and Section 256 of the Companies Act, 1956 and provision of the Article 43 of the Articles of Association of the Company, Mr. Dattatrey Chandrakant Manik and Mr. Bharatbhai Tapubhai Sanchala, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for their re-appointment.

Your Directors recommended their re-appointment at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

a) in the preparation of the Annual Accounts for the year ended March 31, 2013, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and that no material departures are made from the same;

b) the Directors have selected such accounting policies and applied consistently and judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of ;-i ffairs of the Company as at March 31, 2013 and of the profit of the Company for the period * ended on that date;

c) 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; j

d) the Directors have prepared the annual accounts of the Company on ''a going concern'' basis. P AUDITORS AND AUDITORS'' REPORT R

M/s. DJVN & Company, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for the B re-appointment. The Company has received a certificate from the Auditors to the effect that their re- appointment, if made, would be in accordance with Section 224(1B] of the Companies Act, 1956.

There is no qualification or adverse remarks in the auditors report. The Notes on Accounts referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

AUDIT COMMITTEE

The Company has duly constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 & Clause 49 of the Listing Agreement.

PARTICULARS OF EMPLOYEES |

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the Company has no employee with a remuneration during the year under review, which taken in aggregate was equal to or more than the sum prescribed under the said provisions.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Management''s Discussion and Analysis on Company''s performance - industry trends and other material changes with respect to the Company pursuant to Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Exchange. The Company has also implemented several best Corporate Governance practices as prevalent globally. !

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

LISTING FEES: P

The Company has paid necessary listing fees of the Bombay Stock Exchange for the year 2013 2014.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS P AND OUTGO

The requirement of disclosure of particulars with respect to conservation of energy as prescribed I in Section 217 (1) (e) of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence are not provided.

Although the operations of the Company excludes it from the purview of Mandatory steps for energy conservation and involve low energy consumption, the management has been highly conscious of criticality of conservation of energy at all the operational levels and efforts are made in this direction on a continuous basis. Adequate measures have been taken to reduce energy consumption whenever possible by using energy efficient equipments which resulted in reduction in the cost of energy.

The Company continues to use the latest technologies for improving the productivity and quality '' of its services and products.

MATERIAL EVENTS AND COMMITMENTS, IF ANY SUBSEQUENT TO BALANCE SHEET DATE :

There are no material events and commitments, if any, which may have adverse effect on the operations of the Company subsequent to the Balance Sheet date and upto the date of the report.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank all investors, customers, vendors, bankers, financial institutions, Service Providers, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.

By the Order of the board Date: 10th June 2013

Place: Ahmedabad Chairman cuty Director