Directors Report of Mohota Industries Ltd.

Mar 31, 2018

Dear Members,

The Directors are pleased to present the (71^st) Seventy-First Annual Report on the business and operation of the Company together with the Audited Financial Statement for the year ended March 31^st 2018. A summary of the Financial Results is given below. The Management discussion and analysis is also included in this report.

(Rs. in Lakhs)

FINANCIAL RESULTS	For the year ended 31st March, 2018	For the year ended 31st March, 2017
Gross Revenue	35,759.19	33,207.68
Gross Profit (before interest, depreciation & tax)	1,900.94	1,545.15
Less: Interest	950.57	815.93
Depreciation	336.72	369.40
Profit before tax & extraordinary Item	613.65	359.82
Less: Provision for tax Mat Current	125.80	85.81
Deferred	114.35	17.85
Net Profit for the year	373.50	291.86
Appropriation : Transfer to Reserve & Surplus	-	-
Surplus/(Deficit) in the Statement of Profit & Loss Account	373.50	277.01

1. CORPORATE OVERVIEW

Mohota Industries Limited (Formerly- The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd.) (“The Company”) is a leading and the oldest Composite Textile Mill in Vidarbha region of Maharashtra. The Company has its Corporate Head Office at Hinganghat, Dist - Wardha, Maharashtra.

2. OVERVIEW OF THE ECONOMY

Global Economy

In 2017, the cyclical upswing underway since mid-2016 continued to strengthen and the global economy witnessed a pickup in growth. According to the International Monetary Fund (IMF), the year reported the broadest synchronized global growth surge since 2010. The advanced economies witnessed expansion owing to increased investments and manufacturing output. Similarly, key emerging markets and developing economies, including Brazil, China and India, posted strong upward momentum.

Given stronger than expected economic activity in 2017, the IMF has revised its growth forecast for the United States from 2.3% to 2.7% in 2018 and from 1.9% to 2.5% in 2019. Stronger domestic demand in the United States is projected to increase imports. In Europe too, economic activity in 2018 and 2019 is projected to remain stronger than anticipated. Moreover, the advanced economies in Asia are expected to deliver stronger growth, while the emerging and developing ones are expected to grow at around 6.5% over 2018-19, broadly the same pace as in 2017.

Indian Economy

India’s economy picked up some pace in FY 2017-18 and the gross domestic product growth was better than FY 2016-17. The structural reform of The Goods and Services Tax (GST) within a year of demonetisation is expected to provide a boost to the economic growth and investments in the long run.

With an improving business ecosystem, stable macroeconomic indicators and a liberal FDI regime, foreign capital inflow have provided impetus to the domestic economy. According to World Bank’s Global Economic Prospects report, India’s GDP is expected to rise to 7.4% in FY 2018-19 and 7.8% in FY 2019-20.

3. FINANCIAL PERFORMANCE

Your company reported a Top-line growth of 7.69% over the previous year. The Gross Revenue stood at Rs. 35,759.19 Lakhs compared with Rs. 33,207.68 Lakhs in the previous year. The Profit before tax stood at Rs. 613.65 Lakhs as against Rs. 359.82 Lakhs in the previous year. Profit before tax is increased by 70.54% as compared to previous year. The Net Profit for the year stood at Rs. 373.51 Lakhs against Rs. 291.86 Lakhs in the previous year.

There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

The Company has issued 1,17,647 equity shares to Shri. Vinodkumar Mohota, Promoter of the company in its meeting held on 7^th July 2018 on preferential basis pursuant to the approval of shareholders in its EGM held on 24^th March, 2018.

4. DIVIDEND AND RESERVE

Directors recommend a dividend of 1% i.e. Rs.0.10 per equity share of Rs. 10 each aggregating to Rs. 14.59 Lakhs (Rs. 14.59 Lakhs previous year). During the year under review no amount was transferred to General Reserve.

5. SHARE CAPITAL

The paid-up Equity Share Capital as on March 31^st 2018 stood at Rs. 1458.94 Lakhs. During the year under review, the Company has not issued any Sweat Equity shares, Bonus shares or provided any stock option scheme to the employees. None of the Directors of the Company hold instruments convertible into equity shares of the Company. Company has not bought back any of its securities.

Company increased its Authorized Share Capital of the Company from existing Rs. 18,00,00,000/- (Rupees Eighteen Crores only) divided into 1,50,00,000 (One Crore Fifty Lakhs only) Equity Shares of Rs. 10/- (Rupees Ten only) each and 3,00,000 (Three Lakhs only) Non-Cumulative Redeemable Preference Shares of Rs. 100/- (Rupees One Hundred only) each to Rs. 30,00,00,000/- (Rupees Thirty Crores only) divided into 2,70,00,000 (Two Crore Seventy Lakhs only) Equity Shares of Rs. 10/- (Rupees Ten only) each and 3,00,000 (Three Lakhs only) Non-Cumulative Redeemable Preference Shares of Rs. 100/- (Rupees One Hundred only) on 20^th January, 2018 through postal ballot.

During the period under review Company initiated the process of issue of Equity shares on preferential basis. Same got approved by the members on its EGM held on 24^th March, 2018. Process of issue of Equity Shares is completed and will be reflected in the Financial Year 2018-19.

6. FINANCE AND ACCOUNTS

During the year under review, the Rating agency ‘BRICKWORK’ maintained the “BBB” rating for the Company’s long term borrowings and maintained the A3 rating for the Company’s short term borrowings

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company’s state of affairs, profits and cash flows for the year ended March 31, 2018.

7. CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance, forms an integral part of this report.

8. EXTRACT OF ANNUAL RETURN

The details as required under section 92(3) of the Companies Act 2013, read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT-9 is enclosed herewith as Annexure - A and forms an integral part of this Directors report.

9. DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Shri Ranchhoddas Mohota (DIN:00247357) and Shri Shantilal Singhavi (DIN:00247332) Directors of the Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Brief profile has been provided in the Notice convening Annual General Meeting.

10. KEY MANAGEMENT PERSONNEL

Company has following Key Managerial Personnel pursuant to section 203 of the Companies Act, 2013

Sr. No.	Name of the Person	Designation
i	Vinod Kumar Mohota	Managing Director
ii	Vinay Kumar Mohota	Whole-time Director
iii	Shantilal B. Singhavi	Whole-time Director
iv	Mukesh B. Mahajan	Chief Financial Officer
v	Sachin N. Kanojiya	Company Secretary

Remuneration and other details of Key Managerial Personnel for the year ended 31^st March, 2018 are provided in the Extract of Annual Return is attached as “Annexure A”.

11. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared and reviewed based on the evaluation policy after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its committees, culture, execution and performance of specific duties, obligations and governance.

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

The performance evaluation of the independent Directors, Board as a whole and individual Director was completed. The performance evaluation of the Chairman and the Non-independent Directors were carried out by the independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

12. NUMBER OF MEETINGS OF THE BOARD

During the year under consideration, 8 (Eight) Board Meetings were convened and held, The details of the meetings of the Board and other Committees held during the Financial Year 2017-18 forms part of the Corporate Governance Report.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of loan, Guarantee or Investments made by the Company under Section 186 of the Companies Act, 2013, are given in the notes to Financial Statements.

The Company has invested Rs. 11.00 Crore in a partnership firm (KCM). The financial statement of the said partnership firm for the year ended 31^st March 2018 were not available, hence the impact on the profit and corresponding impact on the carrying amount of investment is not ascertainable.

14. VIGIL MECHANISM/ WHISTLE-BLOWER POLICY

The Company has a Whistle-blower policy & Vigil Mechanism pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Listing Regulation for their Directors and Employees to report their genuine concerns or grievances. The policy has been posted on the website of the Company (www.mohotaindustries.com)

15. NOMINATION AND REMUNERATION POLICY

The Company has formulated the Nomination & Remuneration policy for its Directors, key managerial personnel and senior employees keeping in view the following:

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully;

- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:

This policy also lays down criteria for selection and appointment of Board Members. Details of this policy can be accessed at Company’s web-site www.mohotaindustries.com .

16. RISK MANAGEMENT POLICY

Company has developed and implements Risk Management Policy including identification of elements of risk which in the opinion of the Board may threaten to the existence of the Company. Board and Audit Committee periodically reviewed/evaluates the risk management framework so that the future risk can be minimized.

17. RELATED PARTY TRANSACTION

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. The disclosure in form AOC-2 is attached as Annexure B. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee and also to the Board for approval. Transactions which are of repetitive nature are reviewed on a quarterly basis and a statement giving details of all Related Party Transactions was placed before the Audit Committee and the Board for review and approval.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of knowledge and ability, hereby confirm:

(i) That in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

(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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That the directors have prepared the annual accounts on a going concern basis;

(v) That the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

20. AUDITOR’S REPORT AND STATUTORY AUDIT

M/s M.M. Parikh & Co., Chartered Accountants (Firm Registration Number: 107557W) has been appointed as the Statutory Auditors of the Company at the 70^th Annual General Meeting (AGM) for the period of five years i.e. until the conclusion of the 75^th (Seventy Fifth) AGM of the Company to be held in the year 2022, subject to the ratification by the members at every ensuing AGM. Therefore, ratification of appointment of the Statutory Auditor is being sought from the members at the ensuing Annual General meeting as required under the provisions of section 139 of the Companies Act, 2013 to audit the accounts of the company for the Financial Year 2018-19.

The Company has received written confirmation from M/s M.M. Parikh & Co., Chartered Accountants that their appointment, if made, would be in conformity with limit specified in the said section.

Auditor express following opinion on the financial results during the year under review:

1. PCFC USD account showing credit balance of Rs. 36,25,076/- is subject to reconciliation.

2. The Company has invested Rs. 11 Crore in a partnership firm. The financial statement of the said partnership firm for the year ended 31^s’ March, 2018, were not available, hence the impact on the profit and corresponding impact on the carrying amount of investment is not ascertainable.

The observations made in the Auditor’s Report are dealt with separately in the Notes to the Statement of Profit and Loss and the Balance Sheet in Note No. 30 to 40 of the Accounts. These are self-explanatory and do not call for any further comments.

21. COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148(3) of the Companies Act, 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company has been carrying out audit of cost records every year.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Khanuja Patra & Associates, Cost Accountants. (Firm Registration No.: 000214) as Cost Auditor to audit the cost records of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking members’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

22. SECRETARIALAUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has re-appointed Shri Dinesh Kumar Deora, Company Secretary in Practice (Membership No. FCS 5683, C.O.P. No.4119) to undertake the Secretarial Audit of the Company for Financial Year 2018-19. The Secretarial Audit Report is included as Annexure - C and forms an integral part of this Report.

There is no audit qualification by the Secretarial auditor for the year under review.

23. SAFETY AND POLLUTION CONTROL

The Company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control, following are the measures taken by the company.

1. Company has installed 264m3 per day feed capacity automated ETP tertiary system to recycle the water at the Company’s effluent treatment plant.

2. Tree plantation in land adjacent to Mill’s ETP Plant.

3. The Company has undertaken modernization in its Effluent Treatment Plant. Compressed air diffusers have been installed in dosing and aeration tanks. Results of treated effluent are at par with MPCB’s Norms.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - D to this Report.

25. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished In Annexure- E and forming part of the Directors’ Report for the year ended March 31, 2018.

The Company at present does not have any employee drawing salary in excess of the limit specified under section 197 of the Companies Act, 2013.

26. SUBSIDIARIES

The Company does not have any subsidiary/subsidiaries within the meaning of the Companies Act, 2013.

27. DEPOSIT

The Company has not accepted any deposits from public. Therefore, the requirement of Chapter V of the Companies Act, 2013 is not applicable to it.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR)

According to the Companies Act, 2013, the company is not covered under the Companies (Corporate Social Responsibility) Rules 2013, during the period under review.

29. SEGMENTWISE PERFORMANCE:

The Company has only one business segment i.e. “Textiles”.

30. INTERNAL CONTROL SYSTEM AND ADEQUACY:

The Company has a proper and adequate Internal Control System to ensure that its assets are safeguarded and protected against unauthorized use and disposition and all the transactions are properly recorded and reported. The Company also has a system of management reviews to ensure compliance with the prescribed procedures and authority levels.

Pursuant to section 134(5)(e) of the Companies Act, 2013, The Company has proper and adequate Internal Control and Internal Financial Control System, same is reviewed by Company’s Internal Auditor together with Statutory Auditors, the Report by auditor on the company’s Internal Financial Control System forms a part of Independent Auditors Report.

31. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

The Company laid down an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at workplace (prevention, prohibition and redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received in this regard. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

No sexual harassment complaints were received during the year 2017-18.

32. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT

Employees are the company’s most valuable resources. The company continues to create a favorable environment at work place. The company also recognizes the importance of training and continuously deputes its work force in various courses/seminars relating to important management tools like ‘Total Quality Management’ (TQM). The management is specifically calling professionals from various research institutes to train its work force.

The Company has taken following initiatives for skill development program for worker & staff.

1 Training to maintenance staff by qualified engineers from Voltas Ltd., Murata Machinery, Saurer Schlafhorst and Toyota.

2. Shop floor training to technical staff on “Air Engineering” (Humidification System) by B.T.R.A. a renowned textile research association.

3 Training to shop floor workers/operatives by trainer from U.T.T.S., Ahmedabad who guided them about discipline and work procedure while working on machines with proper safety for Toyota Airjet Looms.

4 Deputed staff members to attend National Textile Conference organized by Textile Association of India.

5. Organized in-house seminars on “Goods and Service Tax Implementation” for the Top and Middle level employees. Deputed employees to attend various seminar organized by VIA, TEXPROCIL, ICSI etc. as a part of an ongoing development process.

Following social activities held by the Company

1 Organized Blood donation Camp on Founder’s Day of the Company i.e. on 29th March by which donated 100 units of blood to Blood Bank.

2 During the year, the Company organized seminar on “Stress-Management” by one of a reputed social and charitable Trust from Mumbai for entire staff members of the Mills.

Industrial relations are cordial and satisfactory.

33. CAUTIONARY STATEMENT

Statement in this Director’s Report including Management Discussion and Analysis describing the Company’s objective, projections, estimates, expectations or predictions may be “Forward Looking Statements” within the meaning of applicable securities laws & regulation. Actual results might differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand/supply and price conditions in the market in which the company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

34. ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Mohota Industries Limited

Sd/-

Place : Hinganghat Dr. Ranchhoddas Mohota

Dated: 14.08.2018 Chairman

---

Mar 31, 2016

Dear Members,

The Directors are pleased to present the (69^th) Sixty Ninth Annual Report on the business and operation of the Company together with the Audited Financial Statement for the year ended March 31^st 2016. A summary of the Financial Results is given below. The Management discussion and analysis is also included in this report.

(Rs. in Lacs)

FINANCIAL RESULTS	For the year ended	For the year ended
	31st March, 2016	31st March, 2015
Gross Revenue	32961.61	31926.57
Gross Profit (before interest, depreciation & tax)	1696.86	1679.85
Less: Interest	853.31	1052.06
Depreciation	424.67	324.77
Profit before tax & extraordinary Item	418.88	303.02
Less: Provision for tax
Mat Current	(84.38)	(60.63)
Deferred	(0.00)	(27.47)
Net Profit for the year	334.50	214.92
Appropriation :
Transfer to Reserve & Surplus	-	-
(Surplus/Deficit) in the Statement of Profit & Loss Account	334.50	214.92

1. CORPORATE OVERVIEW

The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. (“Your Company”) is a leading and oldest Composite Textile Mill in Vidharbha Region of Maharashtra State. The Company has its Corporate Head Quarter at Hinganghat, Dist-Wardha of Maharashtra State.

2. OVERVIEW OF THE ECONOMY

The Global economy disappointed in terms of growth, with deceleration of activity in key emerging and developing economies like China, Brazil, Russia overshadowing a modest recovery in major high income countries. The deceleration was accompanied by declines in commodity prices, subdued global trade, bouts of financial market volatility and weakening capital flows. India was a notable exception, growing at 7.6% as per Central Statistical Office (CSO) estimates, despite declines in exports. Inflation has come down, however industrial activity and consumption has not been buoyant.

Three key transitions will influence the global outlook for growth - pace of rebalancing in China, commodity prices and monetary policy actions in the US and other major economies. For India, though the long term prospects for continued growth remain undiminished, actual pace will depend on revival in private investment and rural consumption, strengthening of bank balance sheets and continued implementation of economic reforms.

3. FINANCIAL PERFORMANCE

Your Company reported a marginal top-line growth of 3.24% over the Previous Year, the gross profit from operation stood at Rs.1696.86 lacs compared with Rs.1679.85 lacs in the previous year. The operating profit before tax stood at Rs.418.88 lacs as against Rs.303.02 lacs in the previous year. The Net Profit for the year stood at Rs.334.50 lacs as against Rs.214.92 lacs in the previous year.

4. DIVIDEND AND RESERVE

Your Directors recommends a dividend of 1% i.e. Rs.0.10 per equity shares of face value of Rs.10 each aggregating to Rs.14.59 lacs (Rs.14.59 lacs previous year). During the year under review no amount was transferred to General Reserve.

5. SHARE CAPITAL

The paid-up Equity Share Capital as at March 31^st 2016 stood at Rs.1458.94 lacs. During the year under review Company has not issued any Sweat Equity shares, Bonus shares or provides any stock option scheme to the employee, none of the Directors of the Company hold instruments convertible into equity shares of the Company. Company has not bought back any of its securities.

6. ANALYSIS AND REVIEW Textile Industry Conditions

The Indian Textile Industry is one of the leading textile industries in the world. It is one of the key sectors of India’s manufacturing segment as it contributes significantly to the economy in terms of employment generation and foreign exchange revenue.

Indian Textile and Apparel Industry contribute about 14% to industrial production, 5% to GDP and 17% to country’s export earnings.

The domestic textile and apparel industry in India is estimated to reach US$ 223 billion by 2021 from US$ 108 billion in 2015. The fundamental strength of this industry flows from its strong production base of wide range of fibres and yarns ranging from natural fibres to man-made fibres.

Opportunities and Challenges

The future for the Indian textile industry looks promising, buoyed by strong domestic consumption. The Government has introduced the Amended Technology Up gradation Fund Scheme (ATUFS) to give a further boost for technology investment in the textile industry. The ATUFS targets employment generation, exports, conversion of existing looms to better-quality technology looms and improved quality of processing industry. The ATUFS is expected to act as a catalyst to the Government’s ‘Make in India’ campaign for the textile sector. Approval has also been given for 24 new textile parks which will further create employment opportunities and investments. The long awaited National Textile policy to be announced shortly will further accelerate growth in this sector. Globally, favorable trade policy reforms would also allow the industry to expand its trade partners, improve its export competitiveness and contribute substantially to the nation’s income.

However, there are several challenges ahead for the Textile industry for enhancing its competitive strength and global positioning in terms of inflexible labour laws, poor infrastructure, and competition from other low cost countries which will have to be addressed to sustain the growth momentum of the industry.

The following are few strengths of the Indian Textile Industry:

- An Independent and self-reliant industry;

- Large and potential domestic and international market;

- Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation;

- Availability of low cost and skilled manpower provides competitive advantage to industry;

- Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry;

- Promising export potential.

WEAKNESSES OF THE TEXTILE INDUSTRY

The following are the few drawbacks of the textile industry, which it has to overcome.

- The Industry is a highly fragmented Industry.

- It is highly dependent on Cotton.

- There is lower productivity in various segments.

- There is a declining Mill Segment.

- Lack of Technological Development that affect the productivity and other activities in whole value chain.

- Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and transportation Time.

- Unfavorable labour Laws.

- Lack of Trade Membership, which restrict to tap other potential market.

Performance Highlights

During the year under report, the company’s total sales registered a growth of 3.24% to Rs.32961.61 Lacs from Rs.31926.57 Lacs in the previous Financial Year 2014-15. The Gross Profit for the financial year 201516 is stood at Rs.1696.87 Lacs as compared to Rs.1679.85 Lacs for previous financial year 2014-15 and Net Profit after Tax is increased to Rs.334.50 Lacs as compared to Rs.214.92 Lacs in the previous Financial Year

Raw Material

Textile fibre prices remained mostly stable for first 3 quarters of FY 2015-16 but eventually declined in the last quarter. The sharp fall of crude oil prices followed by a spectacular rally raised the level of volatility in commodity markets, with textile fibres not escaping the price variations. Cotton prices dropped whereas polyester and viscose surged. Multiple raw material cost saving initiatives has also helped in keeping costs in control.

Retail Network

Your Company has a large retail network throughout the country. It has more than 30 agents and more than 2000 retailers which helps the Company to boost its total marketing strength throughout the country.

7. FINANCEANDACCOUNTS

During the F.Y. 2015-16 your Company has repaid Rs.923.52 Lacs towards Term Loan.

Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company’s state of affairs, profits and cash flows for the year ended March 31,2016.

There is no audit qualification in the financial statement by the statutory auditors for the year under review.

8. CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance, forms an integral part of this Report.

9. EXTRACT OF ANNUAL RETURN

The details as required under section 92(3) of the Companies Act 2013, read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT-9 is enclosed herewith as Annexure-A and forms an integral part of this Report of the Directors.

10. DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Shri Ranchhoddas Mohota (DIN:00247357), Director of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Shri Krishnakant Premkumar Tekriwal appointed on Board w.e.f. 13^th April, 2015. Company at the 68^th Annual General Meeting held on 30^th September, 2015 appointed the existing Independent Directors Shri Girdharlal Singhee (DIN: 01479800), Shri Suresh Rathi (DIN: 00474117), as independent Directors under the Companies Act, 2013 for 4 consecutive years and Shri Krishankant Tekriwal (DIN: 00233697) and Ms. Aditi Bagri (DIN: 06943139) for 5 consecutive years.

Ms. Aditi Bagri (DIN: 06943139) Director has resigned from the Board of the Company w.e.f. 13^th February, 2016 due to her personal ground, Vacancy of Independent Director caused by this resignation has been filled by Board of Directors on 13^th February, 2016 by appointing Smt. Ritu Kabra (DIN:07402599) as Additional Director.

As the tenure of Shri Vinod Kumar Mohota, Managing Director, Shri Vinay Kumar Mohota, Whole Time Director and Shri Shantilal B. Singhvi, Whole Time Director was ending on 31.03.2016, Board of Directors in its Board Meeting held on 13^th February, 2016 on the recommendation of Nomination and Remuneration Committee and subject to the approval of Shareholders, reappointed Shri Vinod Kumar Mohota, Managing Director, Shri Vinay Kumar Mohota, Whole Time Director and Shri Shantilal B. Singhvi, Whole Time Director for further period of 3 years from 01^st April, 2016 to 31^st March 2019. The Board recommends their re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

11. KEY MANAGEMENT PERSONNEL

Company has following Key Managerial Personnel pursuant to section 203 of the Companies Act, 2013

Sr. No.	Name of the Person	Designation
i	Shri Vinod Kumar Mohota	Managing Director
ii	Shri Vinay Kumar Mohota	Whole-time Director
Hi	Shri Santilal B. Singhvi	Whole-time Director
iv	Shri Mukesh B. Mahajan	Chief Financial Officer
V	Shri Sachin N. Kanojiya	Company Secretary (w.e.f. 23.06.2015)

During the year under review, Company has appointed Shri Sachin N. Kanojiya, Company Secretary as key managerial personnel of the Company pursuant to section 203 of the Companies Act, 2013. Remuneration and other details of Key Managerial Personnel for the year ended 31^st March, 2016 are mentioned in the Extract of Annual Return which is attached as “Annexure A”.

12. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

The performance evaluation of the independent Directors was completed. The performance evaluation of the Chairman and the Non-independent Directors were carried out by the independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

13. NUMBER OF MEETINGS OFTHE BOARD

During the year under consideration 9 (Nine) Board Meeting were convened and held, The details of the meetings of the Board and Committees held during the Financial Year 2015-2016 forms part of the Corporate Governance Report.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

During the year under review there was no loan, Guarantee or Investments made by the Company under Section 186 of the Companies Act, 2013, hence the said provision is not applicable.

15. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a whistle blower policy & Vigil Mechanism pursuant to the provisions of section 177(9) &

(10) of the Companies Act, 2013 and as per Listing Regulation for their Directors and Employees to report their genuine concerns or grievances. The policy has been posted on the website of the Company ( www.rsrmm.com)

16. NOMINATION AND REMUNERATION POLICY

The Company has formulated the Nomination & Remuneration policy for its Directors, key managerial personnel and other employees keeping in view the followings

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully;

- Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals:

This policy also lays down criteria for selection and appointment of Board Members. Details of this policy are explained in the Corporate Governance Report.

17. RISK MANAGEMENT POLICY

Company has developed and implements Risk Management Policy including identification of elements of risk which in the opinion of the Board may threaten to the existence of the company. Board and Audit Committee periodically reviewed/evaluates the risk management framework so that the future risk can be minimized.

18. RELATED PARTYTRANSACTION

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. The disclosure in form AOC-2 is attached as Annexure B. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee and also to the Board for approval. Transactions which are of repetitive nature are reviewed on a quarterly basis and a statement giving details of all Related Party Transactions was placed before the Audit Committee and the Board for review and approval.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

20. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of knowledge and ability, hereby confirm:

(i) That in the preparation of the Annual Accounts for the year ended March 31^st, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31^st, 2016 and of the profit of the Company for the year ended on that date;

(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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That the directors have prepared the annual accounts on a going concern basis;

(v) That the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

21. AUDITOR’S REPORT AND STATUTORY AUDIT

M/s. Batliboi & Purohit, Chartered Accountant (Firm Registration Number 101048W) have been appointed as Statutory Auditors of the Company at the 67^th Annual General Meeting for a period of three years i.e. up to the conclusion of the Seventieth (70^th) AGM of the Company to be held in the year 2017 subject to ratification by members at every ensuing AGM. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing Annual General Meeting as required under the provision of section 139 of Companies Act, 2013 to audit the accounts of the company for the FY 2016-17. The Company has received written confirmation from M/s. Batliboi & Purohit, Chartered Accountants that their appointment, if made, would be in conformity with limit specified in the said section.

There is no audit qualification during year under review.

The observations made in the Auditor’s Report are dealt with separately in the Notes to the Statement of Profit and Loss and the Balance Sheet in Note No. 23 to 39 of the Accounts. These are self explanatory and do not call for any further comments.

22. COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148(3) of the Companies Act, 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records every year.

The Board of Directors have re-appointed M/s G. R. Paliwal & Company, Cost Accountants, (Registration Number 100058) Nagpur as the Cost Auditors of the Company pursuant to Section 148 of The Companies Act, 2013, for conducting the Cost Audit Records of the Company for the financial year 2016-2017, which has been approved by the Central Government.

In exercise of the powers conferred by sub-sections (1) and (2) of section 469 and section 148 of the Companies Act, 2013 (18 of 2013) and in supersession of Companies (Cost Accounting Records) Rules, 2011; Companies (Cost Audit Report) Rules, 2011, amended by Companies (cost records and audit) Rules, 2014, Cost Audit was not applicable to the Textile Industry for the year 2014-15.

23. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri Dinesh Kumar Deora, Company Secretary in Practice (Membership No. FCS 5683, C.O.P. No.4119) to undertake the Secretarial Audit of the Company for Financial Year 2016-17. The Secretarial Audit Report is included as Annexure - C and forms an integral part of this Report.

There is no audit qualification by the Secretarial auditor for the year under review.

24. SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control, following are the measures taken by your company.

1. Tree plantation in land adjacent to Mills ETP Plant.

2. Green Energy through use of Husk & Briquettes in boiler under United Nation Environmental Programme (UNEP).

3. We have undertaken modernization on our effluent Treatment Plant. Compressed air diffusers have been installed in dosing and aeration tanks. Results of treated effluent i.e. COD, BOD, pH are at par of MPCB’s Norms.

4. R.O. installation work is in full swing and same will be completed within very short period to recycle the water.

5. Extra bag filter installed in the boiler house to arrest even smallest emission material.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - D to this Report.

26. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished In Annexure- E and forming part of the Directors’ Report for the year ended March 31,2016.

The Company at present does not have any employee drawing salary in excess of the limit specified under section 197 of Companies Act, 2013.

27. SUBSIDIARIES

The company does not have any subsidiary/subsidiaries within the meaning of Companies Act, 2013.

28. DEPOSIT

The Company has not accepted any deposit from public. Therefore, the requirement of Chapter V of the Companies Act, 2013 is not applicable to it.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR)

According to the Companies Act, 2013, the company is not covered under the Companies (Corporate Social Responsibility) Rules 2013.

30. SEGMENTWISE PERFORMANCE

The company has only one business segment i.e. “Textiles”.

31. INTERNAL CONTROLSYSTEM AND ADEQUACY

The company has a proper and adequate internal control system to ensure that its assets are safeguarded and protected against unauthorized use and disposition and all the transactions are properly recorded and reported. The company also has a system of management reviews to ensure compliance with the prescribed procedures and authority levels.

Pursuant to section 134(5)(e) of the Companies Act, 2013 company has proper and adequate internal control and Internal Financial Control system, same is reviewed by Company’s Auditor together with the Risk pro (Organization of Professional with proficiency in Risk Management), the Report by auditor on the company’s Internal Financial Control System is form a part of Independent Auditors Report.

32. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT2013

The Company laid down an Anti Sexual Harassment policy in line with the requirements of The Sexual Harassment of Women at work place (prevention, Prohibition and Redressal)Act, 2013. An Internal Complaints Committee has been set up to redress complaints received in this regard. All employees (permanent, Contractual, temporary, trainees) are covered under this policy.

No sexual harassment complaints were received during the year 2015-16.

33. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT

Employees are your Company’s most valuable resources. Your Company continues to create a favorable environment at work place. The company also recognizes the importance of training and continuously deputes its work force in various courses/seminars relating to important management tools like ‘Total Quality Management’ (TQM). The management is specifically calling professionals from renowned textile research institutes like BTRA/SITRA to train its workforce.

Company has taken following initiatives for skill development program for worker & staff.

1. Training to maintenance staff by qualified engineers from Voltas Ltd., Murata Machinery, Saurer Schlafhorst and Toyota.

2. Shop floor Training to technical staff on “Air Engineering” (Humidification system) by B.T.R.A. a renowned Textile Research Association.

3. Training to shop floor workers/operatives by trainer from U.T.T.S., Ahmadabad who guided them about discipline and work procedure while working on machines with proper safety for Toyota Airjet Looms.

4. Deputed staff members to attend International and National Textile Conference organized by Textile Association of India.

5. Water consumption in Process reduced by 33% by adopting technical up-gradation and value engg.

6. Electrical power consumption reduced by 12.78% by adopting various technical controls.

Following social activities held by the Company

1. Organized Blood Donation Camp on Founder’s Day of the Company i.e. on 29^th March by donating 140 bags of blood to Blood Bank.

2. During the year company organized seminar on “Stress-Management” by one of a reputed Social and charitable Trustfrom Nagpur for entire staff members of the Mills.

Industrial relations are cordial and satisfactory.

34. CAUTIONARY STATEMENT

Statement in this Director’s Report including Management Discussion and Analysis describing the Company’s objective, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws & regulation. Actual results might differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include, among others, economic conditions affecting demand/supply and price conditions in the market in which the company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

35. ACKNOWLEDGMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Sd/-

Place : Hinganghat Dr. Ranchhoddas Mohota

Dated: 30/05/2016 Chairman

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Sixty Eighth (68th) Annual Report together with the Audited Financial Statement for the year ended March 31st 2015. The Management discussion and analysis is also included in this report.

(Rs.in Lacs) For the year ended For the year ended FINANCIAL RESULTS 31st March, 2015 31st March, 2014

Gross Revenue 31926.57 28312.88

Gross Profit (before interest, depreciation & tax) 1679.85 1606.15

Less: Interest 1052.06 1024.69

Depreciation 324.77 419.75

Profit before tax & extraordinary Item 303.02 161.71

Less: Provision for tax 303.02 161.71

Mat Current (60.63) (32.35)

Deferred (27.47) 14.62

Net Profit for the year 214.92 143.98

Appropriation :

Transfer to Reserve & Surplus (Surplus/Deficit) in the Statement of Profit & Loss 214.92 143.98 Account

1. CORPORATE OVERVIEW

The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. ("Your Company") is a leading and oldest textile composite mill in Vidarbha Region of Maharashtra State. The Company has its corporate Head Quarter at Hinganghat, Dist - Wardha of Maharashtra State.

2. OVERVIEW OF THE ECONOMY

As per the latest GDP growth estimates, Indian economy grew by 7.4% in FY 2014-15 as compared to 6.9% in FY 2013-14, mostly driven by improved economic fundamentals and revision of GDP calculation methodology. Even inflation showed signs of moderation, a welcome sign - wholesale price and consumer price inflation declined to 4.2% and 7.4% respectively, compared with last year's 6.3% and 10.1%. Reduced inflation, falling crude oil prices, stable Rupee. Improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put India on an accelerating growth track and improved the business outlook.

The Government envisages GDP growth to accelerate to 8% in FY 2015-16 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced. Reforms like e- auctions of coal mines and telecom, FDI hike in insurance, speedier regulatory approvals etc. will be critic al growth enablers to de-bottleneck stalled projects, improve the investment outlook and the ease of doing business in the country. Reforms currently underway such as GST implementation, Amendment on Land Acquisition Bill, Labour Reforms, etc. are expected to provide the requisite thrust for growth in the medium- term.

3. FINANCIAL PERFORMANCE

Amid optimism and rising business sentiments, your Company reported a top-line growth of 12.76% over the Previous Year, the gross profit from operation stood at Rs.1679.85 lacs compared with Rs. 1606.15 lacs in the previous year. The operating Profit before tax stood at Rs. 303.02 lacs as against Rs.161.71 lacs in the previous year. The Net Profit for the year stood at Rs. 214.92 lacs against Rs. 143.98 lacs in the previous year.

4. DIVIDEND AND RESERVE

Your Directors recommend a dividend of 1% i.e. Rs.0.10 per equity shares of face value of Rs.10 each aggregating to Rs.14.59 lacs (Rs. 6.25 lacs previous year). During the year under review no amount was transferred to General Reserve. General Reserve is reducing to the extent of Rs. 278.77 lacs on account of Depreciation on transition to Schedule II of Companies Act 2013 on Tangible Fixed Assets.

5. SHARE CAPITAL

The paid-up Equity Share Capital as at March 31st 2015 stood at Rs. 1458.94 lacs. During the year the Board of Directors has issued Bonus Shares from its permitted reserves/surplus @ 1:6 in its meeting held on 05/02/2015 and same has been approved by members in EGM dated 02/03/2015 and listed on BSE & NSE dated 30/03/2015.

6. ANALYSIS AND REVIEW Textile Industry Conditions

The Textile Industry contributes around 6% to India's GDP. 11% to export earnings and is the second largest employer (-whopping 55 million people) after agriculture. The Industry has shown continued growth with a potential to increase its global trade share from the current 4.5% to 8% (USD 80 Billion) in the next 5 years supported by a rich abundance of raw material, skilled labour and talent.

In FY 2014-15, the textile industry is estimated to have contributed USD 42 Billion (4%) to India's GDP, and 27% to the country's foreign exchange inflows.

Opportunities and Challenges

Being the second largest employer in India coupled with strong Industry linkages with the rural economy augurs well for the Indian textile industry as one of the most significant sectors with an incremental growth potential. Rural economy has seen a spurt in income levels the last few years and this is the right time to juxtapose their synergies to promote the industry's growth. Being one of the key focus sectors under the Government's "Make in India" campaign is a testimony to the huge growth potential the industry holds, both in terms of infrastructure development and skill improvement. Globally, favourable trade policy reforms would also allow the industry to expand its trade partners, improve its export competitiveness and contribute substantially to the nation's income.

However, the growth prospects are constrained by many challenges including rising input costs (wages, power and interest costs), restrictive labour laws and intensified competition from other low cost countries like Bangladesh. Such issues need to be addressed to result in unlocking maximum industry growth potential.

STRENGTHS OF THE TEXTILE INDUSTRY

The following are a few strengths of the Indian Textile Industry:

- An Independent and self-reliant industry;

- Tremendous potential of growth in the domestic and international markets;

- Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across operations;

- Availability of low cost and skilled manpower provides competitive advantage to industry;

- Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry;

- Promising export potential;

WEAKNESSES OF THE TEXTILE INDUSTRY

The following are a few weaknesses of the textile industry, which it has to overcome.

- The Industry is a highly fragmented Industry.

- It is highly dependent on Cotton.

- There is lower productivity in various segments.

- There is a tremendous growth in the unorganized sector.

- Lack of technological developments that affect the productivity and other activities in whole value chain.

- Infrastructural Bottlenecks and Efficiency such as transaction time at ports and transportation time.

- Unfavorable labour Laws.

- Lack of Trade Membership, which is a hindrance to tap other potential markets.

Performance Highlights

During FY 2014-15, Your Company's total sales registered a growth of 12.76% and Net profit being Rs. 214.92 lacs as against t 143.98 lacs in FY 2013-14. The increase in sales was led by volume growth in domestic market.

Raw Material

Major raw material prices i.e. Polyester Staple Fibre & Viscose Staple Fibre were stable during the year largely because of steady international prices and a stable rupee. The Cotton prices were marginally higher than last year. The company is taking multiple cost saving initiatives for its raw materials.

Retail Network

Your Company has a large retail network throughout the country. It has more than 100 agents and more than 2500 retailers which helps the company to boost its total marketing strength throughout the country.

7. FINANCE AND ACCOUNTS

During FY 2014-15 your company had issued and allotted bonus shares @ 1:6 to its existing share holders and Rs. 1119.93 lacs were repaid for Term Loan during the year.

Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the year ended March 31st, 2015.

There is no audit qualification in the financial statement by the statutory auditors for the year under review.

8. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance, forms an integral part of the Report.

9. EXTRACT OF ANNUAL RETURNS

The details forming part of the extract of the Annual Return in form MGT-9 as required under section 92 of the Company Act, 2013, are included in this Report as Annexure - A and forms an integral part of this Report.

10. DIRECTORS

In accordance with the provisions of the Companies Act and the Company's Articles of Association, Dr. Ranchhoddas Mohota, Shri Girdharlal G. Singhee & Shri Suresh Rathi Directors of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Ms. Aditi Bagri joined our company as Woman Director w.e.f. 29.08.2014.

Shri Pavan Poddar Director of our Company has resigned on personal ground from Directorship w.e.f. 10.01.2015.

Shri Krishnakant Tekriwal appointed as Director w.e.f. 13.04.2015.

11. KEY MANAGEMENT PERSONNEL

During the year under review the company has appointed following persons as key managerial personnel.

Sr. Name of the Person Designation No

i Shri Vinod Kumar Mohota Managing Director

ii Shri Vinay Kumar Mohota Whole-time Director

iii Shri Shantilal B. Singhvi Whole-time Director

iv Shri Mukesh B. Mahajan Chief Financial Officer

Note: Your Company has appointed a Whole - Time Company Secretary who will be joining by June 2015.

12. BOARD EVALUATION

Pursuant to the provisions of the Company's Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and the clause 49 of the listing Agreement that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

The performance evaluation of the independent Directors was completed. The performance evaluation of the Chairman and the Non-independent Directors was carried out by the independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

13. NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the Financial Year 2014-2015 forms a part of the Corporate Governance Report.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Details of Loans, Guarantees and investments covered under the provisions of Section 186 of the Companies Act 2013 are given in the notes under Financial Statements.

15. WHISTLE BLOWER POLICY

The Company has a whistle blower policy to report genuine concerns or grievances.

16. REMUNERATION AND NOMINATION POLICY

The Company has formulated the Nomination & Remuneration policy for its directors, key managerial personnel and other employees keeping in view the followings

- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

- remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals:

This policy also lays down criteria for selection and appointment of Board Members.

17. VIGIL MECHANISM:

Company established a vigil mechanism pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement for their directors and employees to report their genuine concerns or grievances., which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, telephone or a letter to the member of Audit committee or to the Chairman of the Audit Committee.

18. RISK MANAGEMENT POLICY:

Company has developed and implements Risk Management Policy including identification of elements of risk which in the opinion of the Board may threaten the existence of the company. Company also reviewed & evaluates the implementation process of risk management policy from time to time so that future risk can be minimized.

19. RELATED PARTY TRANSACTION

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. The disclosure in form AOC-2 is attached as Annexure B. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee and also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature.

Transactions entered into pursuant to omnibus approval are audited by the Risk Assurance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and Board for review and approval on a quarterly basis.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

21. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them. Your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013.

(i) That in the preparation of the Annual Accounts for the year ended March 31st, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) 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 March 31st, 2015 and of the profit of the Company for the year ended on that date;

(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, 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) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) That the Directors had devised proper systems to ensure compliance with the Provisions of all applicable laws and that such systems were adequate and operating effectively.

22. AUDITOR'S REPORT AND STATUTORY AUDIT

M/s. Batliboi & Purohit, Chartered Accountant (Firm Registration Number 101048W) who are statutory auditor of the company hold office up to the conclusion of the Seventieth (70th) AGM of the Company to be held in the year 2017 subject to ratification at AGM. Board recommends the appointment for ratification by members as required under the provision of section 139 of Companies Act, 2013 to audit the accounts of the company for the FY 2015-16. The Company has obtained written confirmation from M/s. Batliboi & Purohit, Chartered Accountants that there appointment, if made, would be in conformity with limit specified in the said section.

The observations made in the Auditor's Report are dealt with separately in the Notes to the Statement of Profit and Loss and the Balance Sheet in Note No. 23 to 39 of the Accounts.

23. COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148(3) of the Companies Act, 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Company every year.

The Board of Directors have Re-appointed M/s G. R. Paliwal & Company, Cost Accountants, (Registration Number 100058) Nagpur as the Cost Auditors of the Company pursuant to Section 148 of The Companies Act, 2013, for conducting the Cost Audit Records of the Company for the financial year 2015-2016, which has been approved by the Central Government.

Cost Audit Report for the financial year ended 31st March, 2014 which was required to be filed with the Central Government on or before 30th September, 2014 has been filed electronically with the Central Government on 22nd September, 2014 in XBRL Format by SRN S31308505.

24. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri Dinesh Kumar Deora a firm of Company Secretaries in Practice (Mem. FCS No. 5683, C.O.P. No.4119) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - C and forms an integral part of this Report.

In regards to the qualification mentioned on secretarial Auditor Report, The Board would like to inform that the Company has appointed the Whole- Time Company Secretary and he will be joining by June, 2015

25. SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control following are the measures taken by your company.

1. Tree plantation (1000 Plant) in land adjacent to Mills ETP Plant.

2. Green Energy through use of Husk & Briquettes in boiler under United Nation Environmental Programme (UNEP).

3. Extra bag filter installed in the boiler house to arrest even smallest emission material.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - D to this Report.

27. PERSONNEL

The information required under Section 197(12) of the Companies Act, 2013 and with Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014 and forming part of the Directors' Report for the year ended March 31st' 2015.

The Company at present dose not has any employee drawing salary in excess of the limit specified under section 197 of Companies Act, 2013.

28. SUBSIDIARIES

The company does not have any subsidiary/subsidiaries within the meaning of Companies Act, 2013.

29. DEPOSIT

The Company has not accepted any deposit and accordingly no amount was outstanding as on date of Balance sheet.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR)

According to the Companies Act, 2013, the company is not covered under the Companies (Corporate Social Responsibility) Rules 2013.

31. SEGMENTWISE PERFORMANCE:

The company has only one business segment i.e. "Textiles".

32. INTERNAL CONTROL SYSTEM AND ADEQUACY:

The company has a proper and adequate internal control system to ensure that its assets are safeguarded and protected against unauthorized use and disposition and all the transactions are properly recorded and reported. The company also has a system of management reviews to ensure compliance with the prescribed procedures and authority levels.

33. PARTICULARS OF EMPLOYEES

Details Pertaining To Remuneration as Required Under Section 197(12) of the Companies Act, 2013 Read With Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014is Furnished In Annexure- E

34. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT:

Your company's most valuable resource is its employees. Your company continues to create a favorable environment at work place. The company also recognizes the importance of training and continuously deputes its work force in various courses/seminars relating to important management tools like 'Total Quality Management' (TQM). The management is specifically calling professionals from renowned textile research institutes like BTRA/SITRA to train its work force.

The Company has taken the following initiatives for skill development for workers & Staff.

1 Training to maintenance staff by qualified engineers from Voltas Ltd., Murata Machinery, Saurer Schlafhorst and Toyota.

2. Shop floor Training to technical staff on "Air Engineering" (Humidification system) by B.T.R.A. a renowned textile research association.

3 Training to shop floor workers/operatives by trainer from U.T.T.S., Ahmedabad who guided them about discipline and work procedure while working on machines with proper safety for Toyota Aiijet Looms.

4 Deputed staff members to attend International and National Textile Conference organized by Textile Association of India.

5. Water conservation in Process reduced by 33% by adopting technical upgradation and value engg.

6. Electrical power consumption reduced by 2.5% by adopting various technical controls.

Following social activities held by the Company

1 Organized Blood donation Camp on Founder's Day of the Company i.e. on 29th March by donating 100 bags of blood to Blood Bank.

2 During the year company organized seminar on "Stress-Management" by one of a reputed Social and charitable Trust from Nagpur for entire staff members of the Mills.

3 Manpower deployment for programmes undertaken in education development in collaboration with NGO "Creative Educators" of Nagpur. These programmes resulted in increase of passing percentage in 10th SSC Board Exams 2015 conducted in Nagpur region of Maharashtra from 4% to 24% in various schools as compared to 2014.

4 Flag-Day 2014 fund for Sainik Welfare through District Collector, Wardha 79,024/-).

Industrial relations are cordial and satisfactory.

35. CAUTIONARY STATEMENT:

Statement in the Management Discussion and Analysis describing the Company's projections and expectations may be "forward looking statements" within the meaning of applicable securities laws & regulation. Actual results might differ materially from those expressed or implied. Important factors that could make a difference to the company's operations include, among others, economic conditions affecting demand/supply and price conditions in the market in which the company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

36. ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

By the order of the Board Place : Hinganghat Dr. Ranchhoddas Mohota Date: 30/05/2015 Chairman

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Mar 31, 2014

Dear Members,

The Directors are pleased to present their 67th report on the business and operation of your company together with Audited Statement of Accounts for the year ended March 31,2014.

FINANCIAL RESULTS (Rs in Lacs) For The Year For The Year ended ended 31stMarch2014 31stMarch2013

GrossRevenue 28312.88 25218.66

GrossProfit(beforeinterest, depreciation&tax) 1606.15 1497.56

Less : Interest 1024.69 1017.32 Depreciation 419.75 455.49

Profit before tax & extraordinary ltem 161.71 24.75

Add : Extraordinary Item - - 161.71 24.75

Less : Provision for tax

Mat Current (32.35) (4.10)

Deferred 14.62 (8.03)

Fringe Benefit Tax - -

For earlier years - -

Net Profit for the year 143.98 12.62

Appropriation :

Transfer to General Reserve 143.98 12.62

DIVIDEND

Your company has already distributed an Interim Dividend @ 1% i.e. Rs.0.10 per equity shares to its share holders whose name appears on the Register of Members on 13.01.2014 i.e. Record Date. The Board of Directors further recommend final Dividend @ 0.50% i. e. Rs.0.05 per equity share of Rs.10/- each to the share holders whose name appears on the Register of Members on 27.09.2014 i.e. Book Closure Date, for the financial year 2013-2014, subject to approval of Shareholders in the ensuing Annual General Meeting.

BONUS SHARES

Your Board of Directors has declared issue of Bonus Shares from its permitted reserves/surplus@2:1 in its meeting held on 18/12/2013. The same has been approved by members in EGM dated 22/01/2014 and listed on BSE & NSE dated 17/02/2014.

OPERATIONS

During the financial year under review, your Company''s turnover has increased to Rs.28312.88 lacs from Rs. 25218.66 lacs in the corresponding previous year mainly on account of increase in export demand of yarn. Company has generated net profit (after tax) of Rs.143.98 lacs in the current financial Year.

EXPORTS

The Company''s export during the year calculated on FOB basis amounted to Rs.82.17 crore as against Rs. 49.62 crore in the immediately preceding year, registering increase in sale by 65.59% due to high demand of yarn in international market.

CURRENT AND FUTURE OUTLOOK

According to the latest estimate, Indian economy grew by 4.70% in F.Y. 2014. Despite a good monsoon, the manufacturing indices had declined, commodity prices stayed at high levels and food inflation reached an all-time high, which resulted in sustained CPI inflation of over 10% in the last financial year. The Rupee depreciated significantly before retracting in the latter half of the year. Consumer sentiments remained subdued for most part of F.Y. 2014.

However, the slow GDP growth appears to have bottomed out and post elections, economic activity is expected to pick up from the second quarter F.Y. 2015.

OPPORTUNITIES AND CHALLENGES

Textile industry is one of the largest employers in India and has strong linkages with the rural economy. The growing young middle-class population is a source of great potential and provides immense opportunities to spur growth in the industry going forward.

The major challenge that the textile and apparel industry is facing is increasing cost of production arising out of rising wages, high power and interest costs.

MODERNISATION/EXPANSION

Your Company has incurred capital expenditure of Rs.95.98 lacs on Factory Building, Plant & Machinery and Modernization / upgradation of Hinganghat and Burkoni Unit.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Shri Vinay Kumar Mohota, Shri Shantilal B.Singhvi & Shri Pavan Poddar Directors of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Shri. C.J. Thakar Director of the company has resigned from the Directorship of the company due to health ground since Nov. 2013. The company appreciates for his valuable efforts & guidance provided during his tenure to the company.

AUDITORS

Your Company''s Auditor, M/s. Batliboi &Purohit, Chartered Accountants, Mumbai retire at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

AUDITOR''S REPORT

The observations made in the Auditor''s Report are dealt with separately in the Notes to the Statement of Profit and Loss and the Balance Sheet in Note No. 23 to 39 of the Accounts. These are self explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors have re-appointed M/sG. R. Paliwal & Company, Cost Accountants, Nagpur as the Cost Auditors of the Company pursuant to Section 233B of The Companies Act, 1956, for conducting the Cost Audit Records of the Company for the financial year 2013-2014, which has been approved by the Central Government.

Cost Audit Report for the financial year ended 31st March, 2013 which was required to be filed with the Central Government on or before 30th September, 2013 has been filed electronically with the Central Government on 27th September, 2013 in XBRL Format.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, your Directors state,

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

b) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2014 and of the profit/loss of the company for the year ended on 31.03.2014;

c) 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 and;

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217(1)(e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure ''I'' which forms an integral part of this report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, the Report on the Corporate Governance, together with Auditor''s Certificate thereon are annexed to this report as Annexure II & III respectively.

PERSONNEL

The company at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Place : Hinganghat Dr. Ranchhoddas Mohota Dated: 31/05/2014 Chairman

---

Mar 31, 2013

Dear Members,

The Directors are pleased to present their 66th report on the business and operation of your company together with Audited Statement of Accounts for the year ended March 31,2013.

FINANCIAL RESULTS (Rs.in Lacs)

For The Year ended For The Year ended 31st March 2013 31st March 2012

Gross Revenue 25218.66 22,799.67

Gross Profit (before interest, depreciation & tax) 1497.56 1024.99

Less : Interest 1017.32 975.48

Depreciation 455.49 495.86

Profit / (Loss) before tax & extraordinary Item 24.75 (446.35)

Less Extraordinary Item 103.39

24.75 (342.96)

Less Provision for taxation Current

Deferred 12.13 71.29

Fringe Benefit Tax

For earlier years

Net Profit / (Loss) for the year 12.62 (271.67)

Appropriation :

Transfer to General Reserve 12.62 (271.67)

DIVIDEND

In view to augment the resources of the company, the Board of Directors have not recommended any Dividend on the paid up Equity Share Capital of the company for the year.

OPERATIONS

During the financial year under review, your Company''s turnover has increased to Rs. 25218.66 lacs from Rs. 22799.62 lacs in the corresponding previous year mainly on account of increase in local demand of fabrics and yarn. Company has generated net Profit (aftertax) of Rs.12.62 lacs in the current financial Year.

EXPORTS

The Company''s export during the year calculated on FOB basis amounted to Rs.49.62 crore as against Rs.60.78 crore in the immediately preceding year, registering decrease in sale by 22.49% due to low demand of yarn in international market.

CURRENT AND FUTURE OUTLOOK

Indian textiles industry is one of the leading sector of Indian economy and contributes significantly to the country''s industrial output (14%), employment generation (35 million in direct and another 20 million, in indirect employment) and export earnings (17%). It contributes 4% to Indian''s GDP.

Consumer demand remained sluggish across the textile and apparel value chain in FY 2013 due to high inflation and interest rates resulting in long periods of extended end-of-season sales, pressure on margins, thus impacting profitability.

OPPORTUNITIES AND CHALLENGES

Textile industry is one of the largest employers in India and has strong linkages with the rural economy. The growing young middle-class population is a source of great potential and provides immense opportunities to spur growth in the industry going forward.

The major challenge that the textile and apparel industry is facing is increasing cost of production arising out of rising wages, high power and interest costs.

MODERNISATION / EXPANSION

Your Company has incurred capital expenditure of Rs.23.60 lacs on Plant & Machinery accessories for modernization / upgradation of Hinganghatand Burkoni Unit. Company also has incurred Rs.82.49 lacs in WIPfor NewTFO shed in Burkoni Unit.

CDM PROJECT ACTIVITY

Company has received CDM project revenue by sale proceed from VCU''S in the international market. Process of getting certificate for CER is in progress and likely to generate more revenue in the future.

MEGA PROJECT STATUS

The company has been given Mega project status under PSI-2007 scheme by Govt.of Maharashtra for its Burkoni Unit.

DEPOSITS

The Company has accepted Deposits U/S 58Aof the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Shri Ranchhoddas Mohota, Shri Vinod Kumar Mohota & Shri G.G. Singhee Directors of the company, retire by rotation attheforthcomingAnnual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

Your Company''s Auditor, M/s. Batliboi & Purohit, Chartered Accountants, Mumbai retire at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

AUDITOR''S REPORT

The observations made in the Auditor''s Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Note No. 25 of the Accounts. These are self explanatory and do not call for any further comments.

COSTAUDOITORS:

The Board of Directors have Re-appointed M/s G. R. Paliwal & Company, Cost Accountants, Nagpur as the Cost Auditors of the Company pursuant to Section 233B of The Companies Act, 1956, for conducting the Cost Audit Records of the Company forthe financial year 2012-2013, which has been approved by the Central Government.

Cost Audit Report for the financial year ended 31st March, 2012 which was required to be filed with the Central Government on or before 31st January, 2013 has been filed electronically with the Central Government on 30th January, 2013 in XBRL Format.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, your Directors state,

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

b) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2013 and of the profit/loss of the company for the year ended on 31.03.2013;

c) 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 and;

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217(1)(e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure T which forms an integral part of this report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, the Report on the Corporate Governance, together with Auditor''s Certificate thereon are annexed to this report as Annexure II & III respectively.

PERSONNEL

The company at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation forthe sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Place: Hinganghat Dr. Ranchhoddas Mohota

Dated: 30/05/2013 Chairman

---

Mar 31, 2012

The Directors are pleased to present their 65th report on the business and operation of your company together with Audited Statement of Accounts for the year ended March 31,2012.

FINANCIAL RESULTS (Rs.in Lacs)

As at As at 31st March 2012 31st March 2011

Gross Revenue 22,799.67 23749.19

Gross Profit (before interest, depreciation & tax) 1024.99 1405.40

Less : Interest 975.48 573.56

Depreciation 495.86 538.19

Profit / (Loss) before tax & extraordinary Item (446.35) 293.65

Less : Extraordinary Item 103.39 -

(342.96) 293.65

Less Provision for taxation Current

Deferred 71.29 (185.80)

Fringe Benefit Tax - -

For earlier years _ -

Net Profit / (Loss) for the year (271.67) 107.85

Appropriation :

Transfer to General Reserve (271.67) 107.85

DIVIDEND

In view of the previous year's carried forward and current years losses, the Board of Directors have not recommended any Dividend on the paid up Equity Share Capital of the company for the year.

OPERATIONS

During the financial year under review, your Company's turnover has decreased to Rs. 22799.67 lacs from Rs. 23652.17 lacs in the corresponding previous year mainly on account of decrease in local demand of fabrics and in export demand of yarn. Company has incurred net Loss (before tax) of Rs.342.96 lacs in the current financial Year.

EXPORTS

The Company's export during the year calculated on FOB basis amounted to Rs.60.78 crore as against Rs.86.97 crore in the immediately preceding year, registering decrease in sale by 30.11% due to low demand of yarn in international market.

CURRENT AND FUTURE OUTLOOK

Indian Textile Industry is one of the leading textile industries in the world. It was predominantly unorganised industry even a few years back, but the scenario started changing after the liberalization of Indian economy in 1991. The opening up of economy gave the much needed thrust to the Indian textile industry which has now become one of the largest in the world.

Indian textile industry play's major role in the economy of the country. India earns about 27% total foreign exchange through textile exports, further the textile industry of India also contribute nearly 14% of the total industrial production of the country. It also contribute around 3% of the total GDP of the country. Indian textile industry is also largest in the country in terms of employment generation and currently generate employment of more than 35 million people.

India has potential to increase its textile and apparel share in the world trade from the current level of 4.5% to 8% and reach US $ 80 billion by 2020. Export of textile grew to US $ 26.8 billion in 2011.

MODERNISATION I EXPANSION

Your Company has incurred capital expenditure of Rs. 142.67 lacs on 4 Sulzer machine, and other accessories for modernization / upgradation of Hinganghat unit and it has been financed through internal accruals as well as buyers credit.

CDM PROJECT ACTIVITY

Company has received CDM project revenue by sale proceed from VCU'S in the international market. Process of getting certificate for CER is in progress and likely to generate more revenue in the future.

DEPOSITS

The Company has accepted Deposits U/S 58Aof the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Shri J. C. Thakar, Shri Pavan Poddar & Shri Suresh Rathi Directors of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

Your Company's Auditor, M/s. Batliboi & Purohit, Chartered Accountants, Mumbai retire at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

AUDITOR'S REPORT

The observations made in the Auditor's Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule 'Q' of the Accounts. These are self explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors have re-appointed M/s. G. R. Paliwal &Co., Cost Accountants, Nagpur as the Cost Auditor of the Company under Section 233B of the Companies Act, 1956 for the year 2012-13.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment)Act, 2000, your Directors state,

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

b) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2012 and of the profit/loss of the company for the year ended on 31.03.2012;

c) 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 and;

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217(1)(e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure T which forms an integral part of this report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, the Report on the Corporate Governance, together with Auditor's Certificate thereon are annexed to this report as Annexure 11 & 111 respectively.

PERSONNEL

The company at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules there under.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Place: Hinganghat Dr. Ranchhoddas Mohota

Dated: 30/05/2012 Chairman

---

Mar 31, 2011

Dear Members,

The Directors are pleased to present their 64th report on the business and operation of your company together with Audited Statement of Accounts for the year ended March 31,2011.

(Rs. in Lacs)

FINANCIAL RESULTS As at As at 31st March 31st March 2011 2010

Gross Revenue 23749.19 18796.99

Gross Profit (before interest, depreciation & tax) 1405.40 1062.85

Less: Interest 573.56 650.22

Depreciation 538.19 580.21

Profit / (Loss) before tax 293.65 (167.58)

Less: Provision for taxation

Current - -

Deferred (185.80) (55.02)

Fringe Benefit Tax

For earlier years - -

Net Profit / (Loss) available for appropriation 107.85 (222.60)

Appropriation :

Transfer to General Reserve 107.85 (222.60)

DIVIDEND

In view of the previous year's carried forward losses, the Board of Directors have not recommended any Dividend on the paid up Equity Share Capital of the company for the year.

OPERATIONS

During the financial year under review, your Company's turnover has increased to Rs. 23673.04 lacs from Rs. 18691.16 lacs in the corresponding previous year mainly on account of increase in local demand of fabrics and in export demand of yarn. Company has earned net profit (before tax) of Rs. 293.65 lacs in the current financial Year.

EXPORTS

The Company's export during the year calculated on FOB basis amounted to Rs. 86.97 crore as against Rs. 72.93 crore in the immediately preceding year, registering increase in turn over by 19.25% due to high demand of yarn in exports market.

CURRENT AND FUTURE OUTLOOK

The textile industry is one of the largest and most important sectors in the Indian economy in terms of output, foreign exchange earnings and employment. India's Textile Industry is one of the leading textile industries in the world. It contributes approximately 14% India's industrial production 4% to the GDP and 17% to the country's export earnings. It provides direct employment to over 35 million people and is the second largest provider of employment after the agricultural sector. The Industry is expected to grow steadily from its present US$ 70 billion to US$ 110 billion by 2015. Textile products including wearing apparel have registered a growth of 4.3% during April-January 2010-11 as per the Index of Industrial Production (MP)data release by the Central Statistical Organisation.

Not with standing signs of recovery from the previous financial crisis, the textile and apparel industry went through a tough year struggling with the surging and fluctuating prices of raw materials. However, the Government is making efforts in boosting the textile industry through various initiatives and investments are increasing steadily. The Ministry of Textiles has sanctioned a total of US$ 133 million under Technology Upgradation Fund Schemes (TUFS) during September 2010. The industry is expected to continue to grow at a significant rate in the future, as it is fuelled by a strong domestic consumption.

Despite new risks, the global economic recovery is gaining strength and the IMF has projected a 4.5% world growth in 2011 and 2012. While growth in emerging economies remain strong, that in the US and Europeon region is slowly gaining momentum some of economies of the developed nations are still a concern with the Euro zone being the most vulnerable as rating agencies continue to downgrade the sovereign rating of many of economies in this region the natural disaster in large sharp increase in oil prices consequent to the turmoil in the Middle East and North Africa is fuelling uncertainty to the pace of global recovery. Globally, elevated food and commodity prices accompanied by the spike in oil prices have engendered inflation concerns.

The Indian Economy registered improved growth and was amongst the better performers amid emerging market economies. Central Statistical Organization's recent estimated Indian GDPgrowth rate of 8.6% for 2010-11 is consistent with the RBI's projections for the same period. While the area sown under the Rabi crop is higher than last year which augurs well for agricultural production, the index of industrial production continues to be volatile. The other indicators such as latest Purchasing Manager's Index, direct and indirect tax collections, merchandise export and bank credit, suggest that the growth momentum persists. However continuing uncertainty about energy and commodity prices may vitiate the investment climate, posing a threat to current growth trajectory, inflation remains a challenge for the Indian Economy and the key risks are tighter monetary conditions and rising prices eating into the consumer's disposable income.

MODERNISATION / EXPANSION

Your Company has incurred capital expenditure of Rs. 137.41 lacs on 4 TFO, 2 Dyeing Machines & RO Plant and other accessories for modernization / upgradation of existing Hinganghat unit and it has been financed through internal accruals.

CDM PROJECT ACTIVITY

Company has received CDM project revenue by sale proceed from VCU'S in the international market. Process of getting certificate for VER is in progress and likely to generate more revenue in the future.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Shri Vinay Kumar Mohota, Shri Shantilal B. Singhvi & Shri G. G. Singhee, Directors of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

Your Company's Auditor, M/s. Batliboi & Purohit, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITOR'S REPORT

The observations made in the Auditor's Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule 'Q' of the Accounts. These are self explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors have re-appointed M/s. G. R. Paliwal & Co., Cost Accountants, Nagpur as the Cost Auditor of the Company under Section 233B of the Companies Act, 1956 for the year 2011 -12.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS'RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, your Directors state :-

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

b) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2011 and of the profit of the company for the year ended on 31.03.2011;

c) 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 and;

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217(1 )(e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure 'I' which forms an integral part of this report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, the Report on the Corporate Governance, together with Auditor's Certificate thereon are annexed to this report as Annexure II & III respectively.

PERSONNEL

The company at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Dr. Ranchhoddas Mohota Chairman

Place: Hinganghat Dated: 30/05/2011

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Mar 31, 2010

The Directors submit their Report and theAudited Accounts for the financial year ended 31 st March, 2010.

FINANCIAL RESULTS (Rs.in Lacs)

As at As at

31st March 31stMarch 2010 2009

Gross Revenue 18796.99 15336.52

Gross Profit (before interest, depreciation & tax) 1062.85 636.85

Less: Interest 650.22 586.19

Depreciation 580.21 557.84

Profit / (Loss) before tax (167.58) (507.18)

Less:- Provision for taxation

Current - -

Deferred (55.02) 136.59

Fringe Benefit Tax - (2.50)

For earlier years - -

Net Profit / (Loss) available for appropriation (222.60) (373.09)

Appropriation :

Transfer to General Reserve (222.60) (373.09)



DIVIDEND

In view of the loss during the year, the Board of Directors have not recommended any Dividend on the paid up Equity share Capital of the company for the year.

OPERATIONS

During the financial year under review, your Companys turnover has increased to Rs. 18691.16 lacs from Rs. 15328.34 lacs in the corresponding previous year mainly on account of increase in export of yarn as Merchant Exporter. However, company has incurred Net loss of Rs.222.60 lacs due to substantial increase in raw material price mainly VSF, Cotton, Stores spares cost and interest on Working capital and Term loan and higher labour cost due to hike in VDA because of high inflation rate and also power cost increased by MSEDCL.

EXPORTS

The Companys export during the year calculated on FOB basis amounted to Rs.72.93 crore as against Rs.48.39 crore in the immediate preceding year, registering increase in turn over by 34% due to high demand of Cotton yarn & PV yarn in Export Market.

CURRENT AND FUTURE OUTLOOK

The global economy is showing signs of a turnaround with Asian Economies experiencing a relatively stronger rebound. The global economic performance improved during the latter half of the calendar year 2009, prompting the IMF to reduce the projected rate of economic contraction in 2009 from 1.1 per cent to 0.8 per cent in January 2010. Consequently, the IMF also revised the projection of global growth for 2010 from 3.1 per cent to 3.9 percent. However, significant risks remain: (1) in many Economies, the recovery is largely driven by government spending whilst consumer sentiments remain fragile: (2) high levels of global liquidity have led to steep increases in commodity prices; (3) emerging markets are likely to face increased inflationary pressures and (4) developed economies are facing large budget deficits.

There are concerns that the global recovery phase may be fragile, as economies of developed countries, particularly USA and Europe, continue to be set with the problems of high unemployment, low consumer spending and depressed housing markets. Besides, the recent crisis in Portugal, Ireland, Spain and Greece indicate that there would be many pitfalls along the road to recovery and that normalcy is still some time away.

Indias growth-inflation dynamics are in contrast to the overall global scenario. The Indian Economy is recovering steadily from the growth slowdown, but inflationary pressures, triggered by the supply side factors, have developed into a wider inflationary cycle.

Although the growth momentum of the Indian economy was substantially impacted with the onset of the global economic slowdown, the severity of the impact was considerably less when compared to most developed economies. The fiscal and monetary policies implemented by the Government of India helped the economy to weather the downturn phase. The outlook of the Indian economy turned positive towards the end of 2009, driven by the uptrend in industrial production and re-cuperating consumption and investment demand. The Reserve Bank of India has projected the final real GDP growth for 2009-10 in the range of 7.2 per cent to 7.5 per cent with aforecast of 8.0 per cent for 2010-11.

MODERNISATION / EXPANSION UNDER TUFS

Your Company has incurred capital expenditure of Rs.313.35 lacs on 6 Ring frames, Draw frame, Speed frame, 2 TFO and other accessories for modernization / upgradation of existing Hinganghat unit and it has been financed through internal accruals and term loan from SBI & BOI under TUFS.

CDM PROJECT ACTIVITY

Our CDM project has been registered in UNFCCC this year and audit for last 3 years has been completed. We will be shortly receiving CER Certificate which we can sell in the international market.

DEPOSITS

The Company has accepted Deposits U/S 58Aof the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri Ranchhoddas Mohota, Shri Vinod Kumar Mohota & Shri C. J. Thakar, Directors of the company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

Your Companys Auditor, M/s. Batliboi & Purohit, Chartered Accountants, Mumbai retire at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

AUDITORS REPORT

The observations made in the Auditors Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in ScheduleQof the Accounts. These are self explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors have re-appointed M/s. G. R. Paliwal & Co., Cost Accountants, Nagpuras the Cost Auditor of the Company under Section 233B of the CompaniesAct, 1956 fortheyear2010-11.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORSRESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by companies (Amendment) Act, 2000, your Directors state :-

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

b) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2010 and of the loss of the company forthe year ended on 31.03.2010.

c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217(1 )(e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure T which forms an integral part of this report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, the Report on the Corporate Governance, together with Auditors Certificate thereon are annexed to this report as Annexure II & III respectively.

PERSONNEL

The company at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and Staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

Place: Hinganghat Dr. Ranchhoddas Mohota

Dated: 29/05/2010 Chairman

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Mar 31, 2004

The Directors submit their Report and the Audited Accounts for the financial year ended 31st March, 2004.

FINANCIAL RESULTS As at 31st As at 31st March, 2004 March, 2003 (Rs. in Lacs) (Rs. in Lacs)

Gross Revenue 13047.47 11198.05

Gross Profit (before interest, depreciation and tax) 837.84 819.79

Less:- Interest 136.04 228.83

Depreciation 426.30 500.47

Profit before Tax 275.50 90.49

Less: Provision for Taxation

Current 6.40 -

Deferred 0.72 25.81 Net Profit available for appropriation 268.38 64.68

Appropriation

Transfer to General Reserve 268.38 64.68

DIVIDEND

To be globally competitive, it is imperative that we should conserve our resources for future modernisation and expansion of our production facilities to have economies of scale. Considering the long term interest of the shareholders, the Directors therefore, do not recommend payment of dividend for the period under review and decided to plough back profits to build up resources which will help in increasing the wealth of shareholders.

OPERATIONS

The year under review concluded with your company registering sales of Rs. 12884.76 lacs. The profit before interest, depreciation and tax was Rs. 837.84 lacs. The Profit after tax stood at Rs. 268.38 lacs as compared to Rs. 64.68 lacs in the previous year registering a significant growth of over 300%. The main reason for increase in profitability of the company can be attributed to reduction in the interest cost.

EXPORTS

The company has made direct export to the tune of Rs. 721.80 lacs during the financial year 2003-04. In the first quarter of current financial year 2004-05, your company has achieved export turnover of Rs. 1000.04 lacs and looking to the constant flow of export orders and barring any unforeseen cirumstances, it is expected that total export turnover in the current fiscal should be around 35-40 Crores atleast. In ensuing post quota regime, your Company is expecting to register robust growth in export sales.

CURRENT & FUTURE OUTLOOK

Inspite of volume growth, your company do not foresee any improvement in its bottomline in the current year because increased realisation is more or less nullified by corresponding stiff increase in price of basic raw matetials i.e. Cotton and Polyster and it seems that this trend will continue for some more time in the near future.

Further, news of scanty rainfall due to erratic monsoon, possible drought in many parts of the country, high inflation due to spiralling oil prices and anticipation of hike in interest rates have shaken the business confidence and dampened the market sentiment and perceptions overnight. In this uncertain scenario, with no effective control over market behaviour and function, your company is taking all possible steps for internal cost control by way of financial restructuring and other administrative cost reduction measures.

As far as future outlook is concerned, the disbanding of Multi-Fibre Agreement (MFA) in January, 2005, in line with WTO commitments will open up huge opportunities for the Indian Textile Sector and with the removal of all quantitative restrictions, it is expected that Indias Share in World Trade in Textile and Clothing will rise leap-frog. Your company being a major player in textile, is certainly bound to get its slice of Cake too.

MODERNISATION

The company is continuing to modernise its manufacturing process. During the year, it has undertaken the installation of 1 No. Yarn Conditioning Plant (YCP) alongwith 1 No. Murata make Autoconer. Apart from this, it has also installed sophisticated Custer Calico Jet Dyeing Machine in its processing section.

CAPITAL EXPENDITURE AND ITS FINANCE

Your company has incurred capital expenditure of Rs. 465.57 lacs during the year under review. The capital expenditure has been mainly incurred towards modernisation of Hinganghat and Wani Unit and is being financed through internal resources/proceeds of Preference Share Issue.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri C. J. Thakar and Shri B. H. Bhattad, Directors of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

The Board of Directors have re-appointed Shri Ranchhoddas Mohota as Joint Managing Director for a further period of 5 years w.e.f. 12.11.2003.

AUDITORS

Your Companys Auditor, M/s. Batliboi & Purohit, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS REPORT

The observations made in the Auditors Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule O of the Accounts. These are self explanatory and do not call for any further comments.

COST AUDITORS

The Board of Directors have re-appointed M/s. G. R. Paliwal & Co., Cost Accountants, Nagpur as the Cost Auditor of the Company under Section 233B of the Companies Act, 1956 for the year 2004-05.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by companies (Amendment) Act, 2000, your Directors state

a) that in the preparation of the annual acounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2004 and of the profit of the company for the year ended on 31.03.2004;

c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure I which forms an integral part of this report.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement a report on the Corporate Governance along with a certificate from the Auditors of the company regarding compliance of the conditions of Corporate Governance and Management Discussion and Analysis Report are given in Annexure II and III respectively, to this report.

PERSONNEL

The company as at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

GIRDHARDAS MOHOTA CHAIRMAN

Place: HINGANGHAT Dated: 30.06.2004

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Mar 31, 2003

The Directors submit their Report and the Audited Accounts for the financial year ended 31st March 2003.

FINANCIAL RESULTS As at 31st As at 31st March, 2003 March, 2002 (Rs. in Lacs) (Rs. in Lacs)

Gross Revenue 11198.05 7058.23

Gross Profit (before interest, depreciation and tax) 819.79 659.60

Less: Interest 228.83 296.75

Depreciation 500.47 395.62

Profit beforeTax 90.49 32.77

Less: Provision for Taxation Current - -

Deferred 25.81 (14.03)

For earlier years - 14.00

Net Profit available for appropriation 64.68 32.80

Appropriation

Transfer to General Reserve 64.68 32.80

DIVIDEND

To be globally competitive, it is imperative that we should conserve our resources for future modernisation and expansion of our production facilities to have ecomonies of scale. Considering the long term interest of the shareholders, the Directors therefore, do not recommend payment of dividend for the period under review and decided to plough back profits to build up resources which will help in increasing the wealth of shareholders.

OPERATIONS

During the year under review, your company has registered significant increase in its sales. The sales has risen by over 60% from Rs. 6993.95 lacs in the year 2001 -02 to Rs. 11173.68 lacs in current year. The profit before interest, depreciation and tax has gone up by 24% from Rs. 659.60 lacs (2001-02) to Rs. 819.79 lacs. Profit after tax has also risen by 97% from Rs. 32.80 lacs (P. Y.) to Rs. 64.68 lacs in current year. The improvement in performance can be attributed to substantial saving in interest cost and marginal improvement in sales realisation.

CURRENT & FUTURE OUTLOOK

The bold initiatives taken by Govt. of India in budget 2003-04 in completing the cenvat chain, withdrawal of unproductive exemption, rationalization of excise duty structure and creation of textile specific infrastructure will go a long way in improving the investment environment of the industry and its overall performance. With these initiatives, the industry is likely to improve its global competitiveness in the new environment.

Again the disbanding of Multi-fibre Agreement (MFA) in January 2005, in line with WTO commitments, will open up huge opportunities for the Indian Textile sector and India will be the biggest gainer. For the first time in 40 years, India will get the opportunity to become a world leader in textiles.

MODERNISATION

The company is continuing to modernise its manufacturing process. During the year, it undertook the installation of 4 Nos. latest TFO Machines along with 1 No. Murata make Autoconer. Apart from it, it has also installed sophisticated Calico Hydraulic Jiggar in its processing section.

FINANCE

Your company has incurred capital expenditure of Rs. 305.80 lacs during the year under review. The capital expenditure has been mainly incurred towards modernisation of Hinganghat Unit and is being financed through internal resources.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS REPORT

The observations made in the Auditors Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule 0 of the Accounts. These are self explanatory and do not call for any further comments.

AUDITORS

Your Companys Auditors, M/s. Batliboi & Purohit, Chartered Accountants retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as Auditors of the company. Members are requested to consider their re-appointment.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri Girdhardas Mohota and Shri Vinodkumar Mohota,

Directors of your Company, retire by rotation and being eligible offer themselves for re-appointment.

COST AUDITORS

Pursuant to the directives of the Central Government under the provision of Section 233 B of the Companies Act, 1956, qualified cost auditor has been appointed to conduct cost audit of the company.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by companies (Amendment) Act, 2000, your Directors state,

a) that in the preparation of the annual acounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2003 and of the profit of the company for the year ended on 31.03.2003.

c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the directors have prepared the annual accounts on a going concern basis.

DELISTING OF EQUITY SHARES OF COMPANY

One of the promoter M/s. Vaibhav Textiles Pvt. Ltd., Hinganghat have acquired 874475 equity shares through negotiated settlement and Open Public Offer duly complying with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. With this acquisition, total shareholding of the promotors/directors, their relatives and friends have become 95.03 %.

Presently, the equity shares of the company are listed at The Stock Exchange, Mumbai, National Stock Exchange of India Ltd., The Stock Exchange, Ahmedabad and Bangalore Stock Exchange Ltd.

Since the shareholding of the public is lesser then 10 %, hence the promotor M/s. Vaibhav Textiles Pvt. Ltd. has approached The Stock Exchange Mumbai (being the Regional Stock Exchange) for delisting of the shares from all the Stock Exchanges and to inform further action to be taken by promotor/company for the same.

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

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure I which forms an integral part of this report.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement a report on the Corporate Governance along with a certificate from the Auditors of the company regarding compliance of the conditions of Corporate Governance and Management Discussion and Analysis Report are given in Annexure II and III respectively, to this report.

PERSONNEL

The company as at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

GIRDHARDAS MOHOTA CHAIRMAN

Place: HINGANGHAT Dated: 28TH JUNE, 2003

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Mar 31, 2002

The Directors submit their Report and the Audited Accounts for the financial year ended 31 st March 2002.

FINANCIAL RESULTS As at 31st As at 31st March, 2002 March, 2001 (Rs. in Lacs) (Rs. in Lacs)

Gross Revenue 7058.23 6553.48

Gross Profit (before interest depreciation and tax) 659.60 277.77

Less: Interest 296.75 243.15

Depreciation 395.62 363.30

Profit/(Loss) beforeTax 32.77 (328.68)

Less: Provision for Taxation Current --- Deferred (14.03) --- For earlier years 14.00 --- Net Profit/(Loss) available for appropriation 32.80 (328.68) Appropriation

Transfer to General Reserve 32.80 (328.68)

DIVIDEND

In view of inadequacy of Profit, your directors do not recommend any Dividend for the year.

OPERATIONS

The year 2001-02 was yet another challenging year for your company. A host of external and internal factors deeply impaired the operations of your company. In the external factors, attack on World Trade Centre in September followed by attack on our parliament in December trembled the global economy. The consumer confidence was at all time low resulting in heavy demand recession. Over and above, riots in Gujarat (a major textile market) played havoc with already suffering economy. Consequently, demand crippled and volume nose-dived leading to heavy stock pile-up. The internal factor that haunted us was the labour strike initiated during the year 2000-2001 and further continued in the current year and finally called off by labour themselves in the month of August, 2001 on conciliation of their aberration. Thereafter, your company began its normal operation and is now working smoothly and is further enjoying excellent relationship with the workers. However, by the time strike ended peacefully, company had to suffer huge production loss leading to dip in volumes, revenue and profitability. Despite all these adverse external and internal factors, your company bounced back and posted an operating profit of Rs. 659.60 lacs (P.Y. Rs.277.77 lacs). After providing for interest, depreciation and tax, net profit and cash profit stood at Rs. 32.80 lacs and Rs. 428.42 lacs respectively.

CURRENT OUTLOOK

Your company do not see any significant improvement in the market condition in the current year too. Although, when market just begin to show the sign of revival reflected by demand improvement and higher realisation in 1st quarter of the current year, corresponding stiff increase in the price of basic raw material like polyster twice in the month of April & May, 2002 almost nullified the gain.

Further, news of scanty rainfall due to erratic monsoon and possible drought in many parts of the country has shaken the business confidence and dampened the market sentiment and perception overnight. Thus, demand started dwindling once again. In this uncertain scenerio, with no effective control over market

behaviour and function, your company is taking all possible strategic steps for internal cost control by way of financial restructuring and other administrative cost reduction measures. It is your management perception that cost control measures initiated would yield enduring results in times to come.

MODERNISATION

The company is continuing to modernise its manufacturing process. During the year, it further added 2 Nos. Autoconers to produce & meet the demand for export quality yarn.

FINANCE

Your company has incurred capital expenditure of Rs. 267.30 lacs during the year under review. The capital expenditure has been mainly incurred towards modernisation and is being financed through internal resources.

Although, your company has to incur substantial interest charge on account of huge stock build-up caused due to severe demand recession but following efforts helped in reducing the borrowing cost -

1. Swaping a substantial part of working capital limit with FCNR (B) demand loan,

2. Speedy realisation of payments through efficient use of SCMS (Star Cash Management System) facility of Bank of India.

3. Improvement in Credit Ratings of the company through better financials as well as healthy banking operations.

MARKETING

Your company having analysed the emerging business scenerio and the opportunities, considers that the imperative is to strengthen its marketing strategies and has taken following pro-active steps in this direction -

1. Installation of more and more number of sophisticated machines to produce high quality yarn and fabrics.

2. Introduction of new value added fabrics to cater to demand of large, medium or semi premium segment.

3. Establishment of additional marketing set-up to exclusively promote/establish the market for premium segment fabrics and to create awareness among the customers.

INSURANCE

All the properties of the company including building, machinery and plant and stocks are adequately insured.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS REPORT

The observations made in the Auditors Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule 0 of the Accounts. These are self explanatory and do not call for any further comments.

AUDITORS

Your Companys Auditors, M/s. Batliboi & Purohit, Chartered Accountant retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as Auditors of the company. Members are requested to consider their re-appointment.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees and surroundings. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri Ranchhoddas Mohota and Shri Basantkumar Mohota, Directors of your Company, retire by rotation and being eligible offer themselves for re-appointment.

Shri Girdharlal G. Singhee, who was appointed as Additional Director at the Board Meeting held on 28th March 2002, hold office upto the date of this Annual General Meeting under section 260 of the companies Act, 1956. The company has received a notice from a member under section 257 of the said Act, signifying his intention to propose him as candidate for the office of Director of the company. Your Directors recommend his appointment as a Director of the company.

COST AUDITORS

Pursuant to the directives of the Central Government under the provision of Section 233 B of the Companies Act, 1956, qualified cost auditor has been appointed to conduct cost audit of the company.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 as amended by companies (Amendment) Act 2000, your Directors state,

a) that in the preparation of the annual acounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended on 31.03.2002 and of the profit of the company for the year ended on 31.03.2002.

c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the directors have prepared the annual accounts on a going concern basis.

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

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure I which forms an integral part of this report.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement a report on the Corporate Governance along with a certificate from the Auditors of the company regarding compliance of the conditions of Corporate Governance and Management Discussion and Analysis Report are given in Annexure II and III respectively, to this report.

PERSONNEL

The company as at present does not have any employee drawing salary in excess of the limits specified under Section 217 (2A) of the Companies Act, 1956 read with rules thereunder.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and staff of the company and for their valuable contribution in the working of the company.

On Behalf of the Board

GIRDHARDAS MOHOTA

CHAIRMAN

Place: MUMBAI Dated: 28TH JUNE, 2002

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Mar 31, 2000

The Directors submit their Report and the Audited Accounts for the financial year ended 31 st March 2000.

FINANCIAL RESULTS As at 31 st As at 31 st March, 2000 March, 1999 (Rs. in Lacs) (Rs. in Lacs)

Gross Revenue 7629.18 9083.26

Gross Profit (before interest, depreciation and tax) 545.83 865.55

Less: Interest 147.00 314.89

Depreciation 309.44 365.17

Profit beforeTax 89.39 185.49

Less: Provision for Taxation 2.75 2.32

Net Profit available for appropriation 86.64 183.17

Appropriation:

Proposed Interim Dividend 41.68 63.07

Tax on Dividend 4.59 6.31

Transfer to General Reserve 40.37 113.79

86.64 183.17

DIVIDEND

The Directors have declared an interim dividend of Re. 1 per equity shares on 41,68,430 equity shares of Rs. 10 each for the financial year ended 31st March, 2000. The interim dividend has been paid to all those equity share holders whose names appear in the Register of Member as on 16th May, 2000. As no final dividend has been recommended on the equity shares, the interim dividend, shall be fully adjusted as final dividend for the financial year ended 31st March, 2000.

OPERATIONS

The working of company was adversely affected due to a combination of several factors, viz.

1. Loss of production caused by a 94 days illegal strike at composite textile plant at Hinganghat. Accordingly company could acheive a turnover of Rs. 7597.45 lacs only during the year under review compared to Rs. 8985.50 lacs in the preceding year.

2. Increase in the prices of manmade fibre, power tariff, fuel cost and wage index. All these increases in the cost of various inputs could not be passed on to the customers due to market resistance.

3. Fall in the earnings from proccessing job owing to severe competition.

Although all these factors have contributed negatively on the turnover and profitability of your company, but through efficient deployment of working capital and better debtors management, interest cost was brought down significantly to Rs. 147 lacs as against Rs. 314.89 lacs incurred in preceding year. Consequently, your companys profit excluding other income was lower to the extent of Rs. 30.07 lacs only.

Your Directors firmly believe that the lower profitability is only symptomatic of the illegal strike and recession through which the whole textile industry is passing and does not in any way reflect the true potential of your company. The various cost control measures being undertaken by the management and quantum jump in export of yam to U.K., Italy, Middle-East in the current year are likely to yield better results and the Directors hope that, barring unforseen circumstances, the result of the current year ought to be encouraging.

MODERNISATION AND EXPANSION

The company is continuing to modernise its manufacturing process. During the year, it undertook the installation of latest yarn preparatory machines (LC300 cards, LF 1400A LMW Speedframe) along with Schlafhorst Autoconer. Apart from it new padding mangle, fully automatic dyeing jiggers and coal fired multipack boiler were also installed. These have helped the company in quality improvement, greater productivity and keeping it updated with latest modern technology in textile industry.

Moreover, production capacity of Wani Unit had been further expanded by installation of 5040 ring spindles along with latest yarn preparatory machines. Thus with these installations your companys turnover would increase substantially in ensuing years resulting in improved profitability.

FINANCE

Your company has incurred capital expenditure of Rs. 883.41 Lacs during the year under review. The capital expenditure has been mainly incurred towards expansion of Wani Unit and modernisation of Hinganghat plant and is being financed through internal resources and term loan from Banks.

INSURANCE

All the properties of the company including building, machinery and plant and stocks are adequately insured.

STATUS OF Y2K COMPLIANCE

The Y2K transition was smooth without any disruption to the operations of the company.

DEPOSITS

The Company has accepted Deposits U/S 58A of the Companies Act, 1956 and are within the rules as prescribed under the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS REPORT

The observations made in the Auditors Report are dealt with separately in the Notes to the Profit and Loss Account and the Balance Sheet in Schedule 0 of the Accounts. These are self explanatory and do not call for any further comments.

AUDITORS

Your Companys Auditors, M/s. Batliboi & Purohit, Chartered Accountant retire at the ensuing Annual General Meeting and being eligible, have given their consent to act as Auditors of the company. Members are requested to consider their re-appointment as the Auditors of the company for the current year and to fix their remuneration.

SAFETY AND POLLUTION CONTROL

Your company accords priority to the health and safety of its employees. It has been taking proper care in complying with all the statutory requirements relating to safety, environment and pollution control.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri Girdhardas Mohota & Shri Vinod kumar Mohota, Directors of your Company, retire by rotation and being eligible offer themselves for re-appointment.

COST AUDITORS

Pursuant to the directives of the Central Government under the provision of Section 233 B of the Companies Act, 1956, qualified cost auditor has been appointed to conduct cost audit of the company.

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

Information required under Section 217 (1) (e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure A which forms an integral part of this report.

PERSONNEL

There are no employees (Other than Managing & Joint Managing Directors) to whom the disclosure requirement of Section 217 (2A) of the Companies Act, 1956 apply.

ACKNOWLEDGEMENTS

The Directors wish to place on record, their appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions and Shareholders. The Directors also record their sense of appreciation for the sincere services rendered by all the Executives and staff of the company for their valuable contribution in the working of the company.

On Behalf of the Board

GIRDHARDAS MOHOTA CHAIRMAN

HINGANGHAT DATED 29TH JUNE, 2000