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Directors Report of Pioneer Embroideries Ltd.

Mar 31, 2018

To,

The Members,

PIONEER EMBROIDERIES LIMITED

The Directors present the Twenty Sixth Annual Report of your Company on the business and operations for the year ended 31st March, 2018.

FINANCIAL HIGHLIGHTS

(Rs. in lakhs)

	For the year ended 31st March, 2018	For the year ended 31st March, 2017
Turnover - Domestic	21,513.69	19,817.39
- Export including Incentive	4,742.89	3,749.29
Other Income	232.66	220.71
Total Revenue	26,489.24	23,787.39
Profit before Financial Charges, Depreciation, Exceptional Items & Tax	1,209.34	1,895.23
Financial Charges	941.84	1,063.21
Profit before Depreciation, Exceptional Items and Tax	267.50	832.02
Depreciation	852.80	818.90
Profit/(Loss) before Exceptional Items & Tax	(585.30)	13.12
Tax Expenses	-	-
Net Profit/(Loss)	(585.30)	13.12
Per share data
Basic Earnings per Share (â)	(2.57)	0.07
Book Value per Share (â)	31.08	31.41

INDIAN ACCOUNTING STANDARD

As mandated by the Ministry of Corporate Affairs vide its notification dated February 16,2015, the Company has adopted the IND AS for the Financial Year commencing from April 1, 2017. Accordingly, these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2012 read with the relevant rules thereunder.

YEAR IN RETROSPECT

Profit before Finance Costs, Depreciation, Tax and Exceptional Items for the year stood at Rs.1,209 lakhs (Rs.1,895 lakhs). The net loss for the year is Rs.585 lakhs as against a net profit of Rs.13 lakhs in the previous year. The Company has generated an operational cash profit of Rs.267 lakhs during the year under report (previous year Rs.832 lakhs).

Turnover of the Company for the year under review stood at Rs.26,257 lakhs as against Rs.23,567 lakhs in the previous year, despite the drop in revenues of the Embroidery & Lace Division (ELD). Net of Excise Duty, Companyâs sales were up by 9% even in a year marked by several headwinds.

The ELD recorded a turnover of Rs.4,088 lakhs, a drop of 18.5% over previous year. This business, which is largely domestic in nature, was severely impacted due to industry-wide scenario following the implementation of the Goods and Service Tax (GST) from 1st July 2017. Textile products, hitherto largely untaxed, witnessed drop in domestic consumer demand after GST was introduced, affecting the production, sales and business margins of several players across industry chain. Consequently, ELD division reported its first-ever operating loss in a decade, of Rs.404 lakhs during the year, as against an operating profit of Rs.399 lakhs during previous year.

The year also proved to be a challenging one for Companyâs Dope Dyed Polyester Yarn (DDPY) business. During the year, the DDPY business recorded a turnover of Rs.21,646 lakhs (net of excise duty of Rs.523 lakhs during the first quarter of FY2017-18), an increase of 17% over previous year. The stress in the business was evident, as the operating profit margins hit a four-year low of 9.4%. The operating profit for the DDPY business during the year stood at Rs.2,036 lakhs as against Rs.1,951 lakhs. The Company successfully managed to limit the impact of unfavourable macro factors, given its strengths of efficient operations, marketing network, product development and international operations. Export revenues for DDPY during the year grew 30% over previous year to Rs.4,183 lakhs.

A detailed review of the performance during the year is given under the section - Management Discussion and Analysis Report as stipulated under Regulation 34 read with part B of Schedule V of Listing Regulations entered into with the Stock Exchanges is set out in a separate section and forms part of the Directors Report.

TRANSFER TO RESERVES

The Board does not propose to carry any amounts to reserves owing to losses in current year.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of Business of the Company.

INDUSTRY OVERVIEW

India is the third-largest exporter of textiles (with about 4.7% market share) and sixth largest exporter of apparels (with less than 4% market share). Others like Italy, Germany and Bangladesh, comparatively smaller than India, also enjoy similar global market share, pointing to the fact that India is yet to fully realize its potential despite enjoying benefits of abundant availability of raw material and skilled labor. While the global industry is tilted towards increased usage of manmade fibres, which are less volatile than natural fibres, India is yet to align itself towards emerging trends.

The Textile and Clothing (T&C) Sector is one of the largest contributors to Indiaâs exports. The sector recorded sales of over USD 36 bn in FY2016-17, and about USD 23 bn for the period April-November 2017. However, the share of T&C Sector in the countryâs overall exports has come down from about 15.1% in FY2015-16 to 14.4% in FY2016-17 and further to nearly 12.4% for the period April-November 2017.

The Textile Industry accounts for approximately 5% of Indiaâs GDP and 14% of overall Index of Industrial Production (IIP). It employs over 45 million people directly and 60 million indirectly, rendering it the second largest job creator after agriculture in the country, and making it a key sector for all major government initiatives like Make in India, Skill Development, Women Empowerment, etc. The T&C sector has tremendous potential for growth in exports and employment, particularly, womenâs employment.

With the introduction of GST, the domestic textile sector has been faced with newer challenges and reduced demand. The sector has witnessed a sharp increase in the rise of imports of overseas fabric and garments due to lower effective import duties, and tax-related refunds have also been delayed, leading to working capital stress. On the other hand, exports have fallen in the months pursuant to GST introduction and discontinuance of certain export incentives.

However, increased investments and conducive policy environment continue to be made by the Government to support the Textile sector in India, given its dominance in terms of employment generation and GDP contribution. The Union Budget 2018-19 raised special package by 19 per cent to â 71.48 billion (previous year: Rs.60 bn) for apparel sector to boost exports. The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Scheme for Integrated Textiles Parks (SITP), Amended Technology Up-gradation Fund Scheme (A-TUFS), Scheme for Capacity Building in Textile Sector (SCBTS) and other employment-linked labor incentives.

BANK BORROWINGS

The Companyâs continued efforts in the previous years towards debt resolution have witnessed fruition, with all payment obligations during the year under review having been met. The total secured borrowings as on year-end FY18 stand at about Rs.6,438 lakhs, including working capital of Rs.1,511 lakhs. During the year, the Company managed to refinance its debt at lower interest rates.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, and the Company has paid listing fee for the year to BSE Limited & National Stock Exchange of India Limited.

The shares of the Company were earlier listed with Kolkata Stock Exchange and Delhi Stock Exchange also. However, the Company had submitted application for delisting of its shares from these Stock Exchanges in the year 2007 as approved by the shareholders in the Annual General Meeting held on 29th December, 2006.

DIVIDEND

In view of losses, the Directors do not recommend any dividend for the year.

SHARE CAPITAL

The paid up equity share Capital of the Company stood at Rs.2,411.73 lakhs comprising 2,41,17,285 equity shares of Rs.10 each as at 31st March, 2018.

The Company has allotted 1,96,078 Equity Shares of face value Rs.10 each on preferential basis to Kotak Mahindra Bank Limited. Additionally, another 23,72,113 Equity Shares of face value of Rs.10 each were allotted pursuant to the conversion of Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) by the Companyâs Secured Lenders/ Banks.

As on 31st March, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

SUBSIDIARY COMPANIES

The revenue of the Hakoba Lifestyle Limited in current year stood at Rs.6.85 lakhs. Profit after tax and exceptional item stood at Rs.2.90 lakhs as compared to Rs.315.92 lakhs during previous year.

The revenue of Crystal Lace (I) Ltd in current year stood at Rs.26.58 lakhs (Rs.26.76 lakhs). The Company has incurred a net loss of Rs.22.79 lakhs as compared to net loss of â 0.36 lakh in previous year.

Pioneer Realty Ltd. had no activity during the year.

The statement of subsidiaries in Form AOC-1 (pursuant to first proviso to sub section (3) of section 129 of the Companies Act, 2013) is provided as Annexure - A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in compliance with applicable provisions of the Companies Act, 2013, and âInd ASâ issued by the Institute of Chartered Accountants of India as well as Listing Regulations as prescribed by the Securities and Exchange Board of India (SEBI) and form a part of the Annual Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance with Auditors Certificate confirming compliance, is attached and forms an integral part of this Report. Further, a declaration affirming compliance with the code of conduct by all the Board members and senior management personnel along with certificate under Regulation 17(8) of the SEBI Listing Regulations is also given in this Annual Report.

EXTRACT OF ANNUAL RETURN

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

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company Mr. Raj Kumar Sekhani (DIN 00102843), who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Accordingly, his re-appointment forms part of the notice of the ensuing Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013:

Sr. No.	Name	Designation
1.	Shri Harsh Vardhan Bassi	Managing Director
2.	Shri Nawal Sharma	Chief Financial Officer (CFO)
3.	Mrs. Ami Thakkar	Company Secretary

BOARD PERFORMANCE/ EVALUATION

The performance evaluation of the non-executive directors is done by the Board annually. This evaluation is based taking into consideration inputs received from the Directors, covering various aspects of the Boardâs functioning such as the attendance and contribution of the member at the board/ committee meetings. The process also considers core competency, expertise, personnel characteristic, and specific responsibility of the concerned director.

The performance evaluation of the Chairman and the Managing Director was carried out by the Independent Directors in a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the view of the Executive Directors and Non-Executive Directors. A separate exercise was carried out to evaluate the performance of individual Directors who were evaluated on parameters such as level of engagement, contribution and independence of judgment. The Board of Directors expressed their satisfaction with the evaluation process.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY

All the Independent Directors have provided the declaration of Independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub-section (6) and SEBI LoDr Regulations.

BOARD MEETINGS

The details of number of meetings of the Board, held during the year forms part of the Corporate Governance Report and hence not repeated here for the sake of brevity.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY

Details of the Loans, Guarantees and Investment covered under the section 186 of the Companies Act 2013, are given in the Financial Statements. WHISTLE BLOWER POLICY

The whistle blower policy adopted by the Company has been posted on its website (www.pelhakoba.com).

NOMINATION AND REMUNERATION POLICY

The Committee has framed a policy to determine the qualification and attributes for appointment and basis of determination of remuneration of all the Directors, Key Managerial Personnel and Senior Management. A copy of the policy is annexed as Annexure -B.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties for the year under review were on armâs length basis and in the ordinary course of business and Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in nature thus provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013, is included as Annexure - C and forms an integral part of this Report.

All related party transactions are placed before the Audit Committee as also to the Board for approval.

The Company has developed a Related Party Transactions Policy which has been uploaded on the website of the Company and web-link thereto has been provided in the Corporate Governance report.

DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT

The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act. Hence, the requirement for furnishing details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS

Certain workmen had filed a complaint against the Company claiming overtime wages, and the Company had filed a Writ Petition in Bombay High Court. Companyâs petition was dismissed in April, 2018, and your Company has now decided to challenge the dismissal before an appropriate Court. The claim amount has been shown as Contingent liability, Note 29, which is forming part of the Balance Sheet.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There is no material change affecting the financial position of the Company which have occurred between the end of the Financial year.

DIRECTORSâ 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 31st March, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

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

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

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

(v) that the Directors had laid down adequate internal financial controls to be followed by the Company and these are operating effectively;

(vi) that adequate and proper systems to ensure compliance with all applicable laws have been devised and such systems are operating effectively in the Company.

STATUTORY AUDIT

M/s. S. K. Naredi & Co. Chartered Accountants (Registration No. 003333C), statutory auditors of the Company were appointed for a period of 5 years at 25th Annual General Meeting as statutory auditors till the conclusion of 30th Annual General Meeting subject to ratification at every Annual General Meeting. Accordingly, resolution seeking memberâs approval for ratification of the appointment of M/s. S. K. Naredi & Co., Chartered Accountants as Statutory Auditors forms part of the Notice convening the Annual General Meeting. They have submitted written confirmation to the Company, that their appointment is in conformity with the limits specified under Section 139 of the Companies Act, 2013.

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors i.e. M/s. S. K. Naredi & Co, Chartered Accountants in its report and therefore, there are no further explanations to be provided for in this report and is prepared as per âInd ASâ.

COST AUDIT

The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s. Vipul Bhardwaj & Co., Cost accountants, as Cost Auditor to audit the cost accounts of the Company for the year 2018-19 at a remuneration of Rs.50,000 plus service tax as applicable and reimbursement of out of pocket expenses. A resolution seeking memberâs approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

SECRETARIALAUDIT

As required under Section 204 of the Companies Act 2013, and rules made thereunder, the Company has re-appointed M/s. Sanjay Dholakia & Associates, a firm of Company Secretaries in Practice (Membership No. 2655; C.P. No. 1798) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - D and forms an integral part of this Report.

There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditors in its report and therefore, there are no further explanations to be provided for in this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system, commensurate with its size, scale and complexity of its operations. The scope and authority of the Internal Audit function is also defined. The Audit Committee of the Board actively reviews the adequacy and effectiveness of the systems.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, corrective actions are undertaken in the respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, including audit of internal financial controls over financial reporting, and the reviews performed by management and the audit committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and operating effectively as at 31st March, 2018.

During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

RISK MANAGEMENT

There is a continuous process for identifying, evaluating and managing significant risks faced through a risk management process designed to identify the key risks facing business. Risks would include significant weakening in demand from core-end markets, inflation uncertainties and any adverse regulatory developments, etc. During the year a risk analysis and assessment was conducted and no major risks were noticed.

SAFETY, HEALTH & ENVIRONMENT

As hitherto, all efforts were taken to ensure safety in the operation of the Plants, promote health and protect the environment. The health of the Employees is being continuously monitored and environment improvement measures in and around the Plant area are being given due care and attention.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Employees are considered to be team members being one of the most critical resources in the business which maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Companyâs Polices and Systems. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Your Company regularly conducts technical and safety training programmes.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14, the internal committee constituted under the said act has confirmed that no complaint/case has been filed/pending with the Company during the year.

MANAGERIAL REMUNERATION

a. Details of the remuneration of each director to the median remuneration of the employees of the Company and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - E.

b. The Company doesnât have any employee falling within the preview of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 hence, no such details to be provided.

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

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, are attached as Annexure-F to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company seeks to build constructive relationship with all the stakeholders and wants to benefit from your Companyâs presence. The provisions of CSR activities under Companies Act 2013 were applicable to your Company. The Company had formed the CSR Committee and has framed a CSR policy which has been uploaded on the website of the Company. However, due to Negative financial results of the Company during the current year and stress in Companyâs cash flow, the Committee did not propose to spend any amount on CSR activities. A detail pursuant to Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure -G.

PROPOSAL OF EMPLOYEE STOCK OPTION SCHEME:

Equity based compensation is considered to be an integral part of employee compensation across sectors which enables alignment of personal goals of the employees with organizational objectives by participating in the ownership of the Company through share based compensation scheme/plan. Your Company believes in rewarding its employees including Directors of the Company for their continuous hard work, dedication and support, which has led the Company on the growth path.

The Company intends to implement the âPioneer Embroideries Limited Employee Stock Option Plan 2018 (hereinafter referred to as the âPEL ESOP 2018â/ âPlanâ), with a view to attract and retain key talents working with the Company by way of rewarding their performance.

Accordingly, it is proposed to adopt a new scheme under the SEBI SBEB Regulations, under the name and style âPEL ESOP 2018â for the purposes of granting options to the Employees/Directors of the Company and its holding/subsidiary(ies), as applicable.

The Resolutions contained in the AGM notice to the Membersâ seeks their approval to authorise the Board of Directors of the Company to create, issue, offer and allot equity shares, from time to time, to Employees/Directors of the Company and its holding/subsidiary(ies) under this Scheme.

A copy of the proposed PEL ESOP 2018 will also be available for inspection at the Registered Office and Corporate Office of the Company between 10:00 a.m. to 1:00 p.m. on all working days up to the last date of the AGM. Also, main feature of ESOP are included in the explanatory Statement to the notice of AGM.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the Government authorities, Shareholders, Valued Customers, Companyâs Bankers, Raw Material Suppliers, and other Business Associates for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the revival of your Company.

For and on behalf of the Board of Directors

Raj Kumar Sekhani

Chairman

Place : Mumbai DIN: 00102843

Date : 28th May, 2018

Mar 31, 2016

The Directors present the Twenty Fourth Annual Report of your Company on the business and operations for the year ended 31^st March, 2016. FINANCIAL HIGHLIGHTS:

(Rs. in lacs)

	For the year ended 31^st March, 2016	For the year ended 31^st March, 2015
Turnover - Domestic	20,974.49	22,939.56
- Export	4,561.66	4,214.97
Total	25,536.15	27,154.53
Profit /(Loss) before Other Income, Financial Charges, Depreciation, Exceptional Items & Tax	2,151.72	2,519.69
Other Income	2,370.05	1,729.03
Profit /(Loss) before Financial Charges, Depreciation, Exceptional Items & Tax	4,521.77	4,248.72
Financial Charges (net)	941.30	1,201.13
Profit /(Loss) before Depreciation, Exceptional Items and Tax	3,580.47	3,047.59
Depreciation	1,412.09	1,730.39
Profit/(Loss) before Exceptional Items & Tax	2,168.38	1,317.20
Exceptional Items	522.23	1,105.55
Tax Expenses	--	--
Net Profit/(Loss)	1,646.15	211.65
Balance of net loss brought forward from previous year	(4,550.69)	(4,762.34)
Balance of Profit/(Loss) carried forward	(2,904.54)	(4,550.69)
Per share data
Basic Earnings per Share ('')	8.93	1.20
Book Value per Share ('')	49.34	64.42

YEAR IN RETROSPECT

Profit before Other Income, Finance Costs, Depreciation, Tax and Exceptional Items for the year stood at Rs.2,152 lacs (Rs.2,520 lacs). The net profit for the year is Rs.1,646 lacs as against a net profit of Rs.212 lacs in the previous year. The Company has generated a cash profit of Rs.1,211 lacs during the year under report (previous year Rs.1,319 lacs).

Turnover of the Company for the year under review stood at Rs.25,536 lacs as against Rs.27,155 lacs in the previous year, primarily due to drop in revenues of the Dope Dyed Polyester Yarn (DDPY) business.

During the year, the DDPY business recorded a turnover of Rs.19,221 lacs, a drop of 8.4% over previous year, essentially owing to a steep fall in prices of crude oil, its major input material. The operating profit for the DDPY business during the year stood at Rs.2,341 lacs as against Rs.2,486 lacs. The fall in operating profit was protected by a better product mix and cost control, as a result of which the operating margins for the DDPY business increased by around 30 basis points to 12.2% over previous year.

The Embroidery and Laces division showed a marginal improvement in turnover, as it rose to Rs.6,196 lac from Rs.5,875 lacs. However, due to increased competition and cost pressures, there was a significant erosion in the division''s operating profits in FY16 to Rs.393 (Rs.679 lac) and operating margins to 6.34% (11.5%).

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.

TRANSFER TO RESERVES

The Board does not propose to carry any amounts to reserves.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of Business of the Company.

INDUSTRY OVERVIEW

The overall textile industry recorded export earnings worth USD 41.67 bn in FY15, a growth of 3% over previous year, and was the second largest contributor to the country''s overall exports during the year. Growth in exports of certain segments were high, such as handicrafts (17%), carpets (15%), readymade garments (12%), silk (13%) wool and woolen textiles (18%)

The textile sector''s export-led growth was aided by lower cotton prices, falling interest rates, firm overseas demand from consuming countries, labor cost advantage over competitors and favorable exchange rates.

The government is continuing its efforts to grow the textile sector, as it contributes approximately 5% of the country''s GDP and is the largest employer outside agriculture. Steps such as setting up new textile parks, textile development in North Eastern region, promotion of technical textiles, skilling initiatives in textiles, etc. are being taken to facilitate overall sector growth.

The domestic demand is likely to improve if good monsoons are witnessed, as higher consumer spending and disposable income coupled with lower interest rates are expected to bolster consumption. However, the textile and garment export sector may be negatively affected in the medium term depending upon the implementation of the Trans-Pacific Partnership, a duty-free trade agreement between 12 nations which include US, Canada and Japan, key countries to which India''s textile and garment exports are substantial.

YEAR IN PROSPECT

Pioneer continues its efforts to position itself as a major player and a preferred supplier for its customers in the DDPY segment. The concentration is on value addition like twisting, doubling and air text rising of yarn, to keep away from the price structure of commodity products prevalent in the industry. Product development, improved efficiency, strengthened marketing network, etc., are being seriously pursued.

The Company is in the midst of expanding its DDPY capacity in order to meet the expected demand in the coming years. The current installed capacity of 12,000 MT is set to be increased by 6,200 MT by the year FY17-18.

Operations in the Embroideries and Laces division continue to be bogged down by older, low-speed machines, high cost of operations and competitive pressures. Increased investments are required in the business, and only after that there could be a sustained growth in revenues and profitability of this division.

A detailed review of the performance during the year is given under the section - Management Discussion and Analysis Report, and forms part of the Directors'' Report.

BANK BORROWINGS

The Company''s continued efforts in the previous years towards debt resolution have yielded desired results. The payment obligations under OTS arrived with State Bank of India have been completed, and with Corporation Bank are underway. The total secured borrowings as on year-end FY16 stand only at about Rs. 7,610 lac, including working capital of Rs.950 lac, substantially lower than the outstanding amount 3-4 years ago.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, and the Company has paid listing fee for the year to BSE & NSE.

DIVIDEND

In view of accumulated losses, the Directors do not recommend any dividend for the year.

SHARE CAPITAL

The paid up equity share Capital of the Company stood at Rs.1,854.91 lacs comprising 1,85,49,094 equity shares of Rs.10/- each as at March 31, 2016.

The Company has issued 8,50,000 Equity shares of Rs.10/- each at a premium of Rs.25/- to Edelweiss Asset Reconstruction Company Ltd. Trustee of EARC Trust-SC 23 as approved by shareholders through a resolution dated 12^th March, 2015 passed by postal Ballot.

As on March 31, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

EMPLOYEES STOCK OPTION SCHEME 2016

During the year under review, the Company has designed an Employee Stock Option Scheme (ESOP) for the benefit of its permanent employees. The necessary permissions for the scheme - PEL ESOP 2016 - is being obtained from members by way of postal ballot, which began on 25^th April, 2016.

SUBSIDIARY COMPANIES

None of the Subsidiaries of the Company had any activity during the year.

The Company has increased its shareholding in Hakoba Lifestyle Ltd.(HLL) during the year by Rs.3,496.90 lacs, following a right issue by HLL. The Company further acquired 20,24,117 equity shares of Rs.10/- each from a minority shareholder of HLL during the year. HLL has now become a wholly-owned subsidiary of the Company.

In view of the continuous losses in its wholly-owned subsidiary, S.R Investment Ltd, Mauritius (SRIL), the Company has decided to liquidate SRIL. The liquidation process is expected to be completed in the financial year FY16-17. Accordingly, the Company has made provision for its entire investment in SRIL.

JOINT VENTURE

The Company had invested USD 4.96 mn. in a proposed overseas Joint Venture with M/s Super Industries DMCC, made out of FCCBs funds. As the Joint Venture has failed completely, the Company has decided to consider the investment as doubtful of recovery and accordingly, it has made provision for the entire amount of USD 4.96 mn. during the year. The unpaid, accrued service charge of USD 2.44 mn., levied on the investment/loan amount up to FY 2012-13, has also been considered as non-recoverable. The Company has treated the interest reversal as monetary item and debited the same to Statement of Profit & Loss and treated the principal amount as non-monetary item and debited the same to Capital reserve.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in accordance with the applicable accounting standards and form a part of the Annual Report.

CORPORATE GOVERNANCE

EXTRACT OF ANNUAL RETURN

DIRECTORS

Mr. Raj Kumar Sekhani (DIN 00102843) who retires by rotation and being eligible, offers himself for reappointment.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013:

Sr. No.	Name	Designation
1	Shri Raj Kumar Sekhani	Chairman
2	Shri Harsh Vardhan Bassi	Managing Director
3	Shri Nawal Sharma	Chief Financial Officer (CFO) (w.e.f. December 01, 2015)
4	Ms. Bharti Gandhi	Company Secretary

During the year, Shri Shriprakash Jain resigned as Chief Financial Officer (CFO) of the Company w.e.f. November 30, 2015. The Directors place on record their appreciation for the contribution made by him during his tenure.

BOARD PERFORMANCE

The performance evaluation of the non-executive directors is done by the Board annually. This evaluation is based on the attendance and contribution of the member at the board/ committee meetings. The process also considers core competency, expertise, personnel characteristic, and specific responsibility of the concerned director.

The performance evaluation of the Chairman and the Managing Director was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY

BOARD MEETINGS

The details of number of meetings of the Board, held during the year forms part of the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY

Details of the Loans, Guarantees and Investment covered under the section 186 of the Companies Act 2013, are given in the Financial Statements.

WHISTLE BLOWER POLICY

The whistle blower policy adopted by the Company has been posted on its website (www.pelhakoba.com).

NOMINATION AND REMUNERATION POLICY

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and thus provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013, is accordingly, not required.

All related party transaction are placed before the Audit Committee as also to the Board for approval.

DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR 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.

DIRECTORSâ RESPONSIBILITY STATEMENT

(i) that in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

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

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

(v) that the Directors had laid down adequate internal financial controls to be followed by the Company and these are operating effectively;

(vi) that adequate and proper systems to ensure compliance with all applicable laws have been devised and such systems are operating effectively in the Company.

STATUTORY AUDIT

M/s M B A H & CO, Chartered Accountants (Registration No. 121426W), statutory auditors of the Company, were appointed for a period of 3 years in the last Annual General Meeting to hold office of Statutory Auditor to audit accounts of the Company till the conclusion of 26th Annual General Meeting of the Company. M/s M B A H & CO have submitted written confirmation to the Company that their appointment, is in conformity with the limits specified under Section 139 of the Companies Act, 2013.

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in its report and therefore, there are no further explanations to be provided for in this report.

COST AUDIT

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Vipul Bhardwaj & Co., Cost accountants, as Cost Auditor to audit the cost accounts of the Company for the year 2016-17 at a remuneration of ''50,000 plus service tax as applicable and reimbursement of out of pocket expenses. A resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT

As required under Section 204 of the Companies Act 2013, and rules made there under, the Company has appointed M/s Sanjay Dholakia & Associates, a firm of Company Secretaries in Practice (Registration No. 2655) 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.

Auditor''s Observation

The Company has not appointed Whole-time Company secretary as Compliance Officer as required pursuant to Regulation 6(1) of SEBI, Listing Obligations and Disclosure Requirements) Regulations 2015.

The management reply to the observations of the Secretarial Auditor is as under:

Your Directors state that the Company had complied the same after 31^st March 2016.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your company has an effective internal control and risk mitigation system, commensurate with its size. The Audit Committee of the Board actively reviews the adequacy and effectiveness of the systems.

RISK MANAGEMENT

CORPORATE SOCIAL RESPONSIBILITY

The provisions of CSR activities under Companies Act 2013 do not apply to your Company.

SAFETY, HEALTH & ENVIRONMENT

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Your company regularly conducts technical and safety training programmes.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

MANAGERIAL REMUNERATION

a) Details of the remuneration of each director to the median remuneration of the employees of the Company and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure -D.

b) The Company doesn''t have any employee falling within the preview of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 hence, no such details to be provided.

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

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, are attached as Annexure-E to this report.

ACKNOWLEDGMENT

For and on behalf of the Board of Directors

RAJ KUMAR SEKHANI

Place : Mumbai. Chairman

Date : May 12, 2016 DIN 00102843

Mar 31, 2015

Dear Members,

The Directors present the Twenty Third Annual Report of your Company on the business and operations for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS: (RS. in lacs) For the year ended For the year ended 31st March, 2015 31st March, 2014

Turnover - Domestic 22,652.74 23,205.18 - Export 4,501.79 4,116.65

Total 27,154.53 27,321.83

Profit /(Loss) before Other Income, Financial Charges, Depreciation, Exceptional Items & Tax 2,519.69 1,899.13

Other Income 1,729.03 838.60

Profit /(Loss) before Financial Charges, Depreciation, Exceptional Items & Tax 4,248.72 2,737.73

Financial Charges (net) 1,201.13 1,667.37

Profit /(Loss) before Depreciation, Exceptional Items and Tax 3,047.59 1,070.36

Depreciation 1,730.39 1,098.91

Profit/(Loss) before Exceptional Items & Tax 1,317.20 (28.55)

Exceptional Items 1,105.55 663.30

Tax Expenses - -

Net Profit/(Loss) 211.65 (691.85)

Balance of net loss brought forward from previous year (4,762.34) (4,070.49)

Balance of Profit/(Loss) carried forward (4,550.69) (4,762.34) Per share data

Basic Earnings per Share (RS.) 1.20 (3.91)

Book Value per Share (RS.) 64.42 59.99

YEAR IN RETROSPECT

Profit before Other Income, Finance Costs, Depreciation, Tax and Exceptional Items for the year stood at RS. 2,519.69 lacs (RS. 1,899.13 lacs). The net profit for the year is RS. 211.65 as against a net loss of RS. RS.691.85 lacs in the previous year. The Company has generated a cash profit of RS.1,318.56 lacs during the year under report (previous year RS.231.76 lacs).

During the year under review, the Dope Dyed Polyester Yarn (DDPY) business reported an increase in EBIDTA levels by 24%, despite a marginal fall in turnover. The turnover was RS.20,991 lacs (RS.21,495 lacs), essentially owing to a steep fall in price of crude oil. The operating margins has improved as the fall in raw material price was more than that in realisation and share of value added products in sales has also increased. The share of value added items in the turnover has increased from 66% in the previous year to 71% during the year under report. The corresponding numbers in terms of quantity are 60% and 65%. The Operating margins has thus improved to 11.84% from 9.33% in the previous year and EBIDTA for the year stood at RS.2,486 lacs (RS.1,998 lacs).

The operations of Embroidery and Laces division have shown marginal improvement with turnover at RS.5,875 lacs (RS.5,290 lacs) and an EBIDTA of RS.680 lacs (RS.376 lacs). The operations of Bobbin Lace Unit at Sarigam are yet to stabilize, resulting in a loss of production. Production at Naroli and Coimbatore has shown marginal improvement.

The efforts of your company towards higher production and more efficient operations are expected to bring better benefit all the stake holders. A sustained thrust on higher value addition and high margin products also continues towards this end.

INDUSTRY OVERVIEW

The textile industry outlook for 2015 is expected to be flat.

The demand will to be driven mainly from domestic consumption. Exports may not show high growth due to weak economic recovery in global markets with a string of disappointing growth outturns in the Euro Area, Japan, parts of emerging Europe (especially Russia) and Latin America. The recovery in the United States and the United Kingdom had, however, gained momentum during 2014 and China had continued on a path of gradual deceleration. Overall, global growth is expected to rise moderately, to 3.0 percent in 2015 from 2.6% in 2014.

Thus, the growth from USA and UK markets may offset losses in Euro area and emerging Europe. The growth may, however, come from Latin America. The Government initiatives to support the industry may also contribute to the growth.

YEAR IN PROSPECT:

PIONEER continues to offer end-to-end solutions to its DDPY customers in its niche Segment. The focus of the Company remains on inter-fibre replacements in particular. With polyester prices in the present range, there are many opportunities that remain to be tapped. The Company is planning to expand its capacity in order to meet the growing demand of value added yarns in non-apparel segment from the existing set of customers, in particular.

The operations at Embroideries and Laces division are still affected by low speed machines and man-power constraints. The efforts to improve performance within these constraints are continuing and are shown in the incremental improvements. However, any substantial improvement in the performance will require a complete up-gradation and modernization of the facilities.

A review of the performance during the year is given under the section - Management Discussion and Analysis Report.

Bank Borrowings

As reported in the previous year, the bankers had opted out of CDR in January 2014. The Company has been successful in its efforts to resolve its accounts with the lenders individually, inasmuch as it has arrived at a "One Time Settlement (OTS)" with State Bank of India, a restructuring of its account with Edelweiss Asset Reconstruction Co. Ltd. (assignee EXIM Bank) and a settlement with Kotak Mahindra Bank Ltd.(assignee HDFC Bank Ltd.). Your company has also made full payment to State Bank of Patiala during the year in terms of One time settlement with that bank. Your company is hopeful to resolve its dues to other banks viz. Corporation Bank and SIDBI.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, and the Company has paid listing fee for the year to BSE & NSE.

The shares of the Company were earlier listed with Kolkata Stock Exchange and Delhi Stock Exchange also. However, the Company had submitted application for delisting of its shares from these Stock Exchanges in the year 2007 as approved by the shareholders in the Annual General Meeting held on 29th December, 2006.

DIVIDEND

In view of accumulated losses, the Directors do not recommend any dividend for the year.

SHARE CAPITAL

The paid up equity share Capital of the Company stood at RS.17,69,90,940 comprising 1,76,99,094 equity shares of RS.10/- each as at March 31,2015.

The Company has since issued 8,50,000 Equity shares of RS.10/- each at a premium of RS.25/- to Edelweiss Asset Reconstruction Company Ltd. Trustee of EARC Trust-SC 23 as approved by shareholders Through a resolution dated 12th March, 2015 passed by postal Ballot.

The information about ultimate beneficial owners of the above issue is as follow:-

A. Edelweiss Asset Reconstruction Company Ltd. Trustee -EARC Trust - SC 23 - The proposed allottee -

Sr. No. Name of Beneficiary Constitution % of interest

1. Exim Bank Scheduled Bank 95

2. Edelweiss Asset Reconstruction Company Ltd. Unlisted Public (EARC) Ltd. Company 5

SUBSIDIARY COMPANIES

None of the Subsidiaries of the Company had any activity during the year.

The statement of subsidiaries in Form AOC-1 (pursuant to first provision to sub section (3) of section 129 of the Companies Act, 2013) is provided as Annexure A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company, prepared in accordance with the applicable accounting standards, form a part of the Annual Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Report on Corporate Governance with Auditors Certificate confirming Compliance, is attached and forms a part of the Annual Report.

EXTRACT OF ANNUAL RETURN

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

DIRECTORS

Mr. Rameshchandra Gunanand Pokhriyal was inducted as an additional director w.e.f. 5th August, 2014 on the Board of Director of the Company. As per the provisions of the Companies Act, 2013 and the Article of Association of the Company, his appointment as a Director of the Company requires the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Mrs. Jyoti Niranjan Ledwani was inducted as an additional director w.e.f. 26th March, 2015 on the Board of Director of the Company. As per the provisions of the Companies Act, 2013 and Article of Association of the Company, her appointment as a Director of the Company requires the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Mr. Harsh Vardhan Bassi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013:

Sr. No. Name Designation

1. Shri Raj Kumar Sekhani Chairman

2 Shri Harsh Vardhan Bassi Managing Director

3. Shri Shriprakash Jain CFO

4. Ms. Bharti Gandhi Company Secretary

BOARD PERFORMANCE

The performance evaluation of the non-executive directors is done by the Board annually. This evaluation is based on the attendance and contribution of the member at the board/ committee meetings. The process also considers core competency, expertise, personnel characteristic, and specific responsibility of the concerned director.

The performance evaluation of the Chairman and the Managing Director was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

BOARD MEETINGS

The details of number of meetings of the Board, held during the year forms part of the Corporate Governance Report.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY THE COMPANY

Details of the Loans, Guarantees and Investment covered under the section 186 of the Companies Act 2013, are given in the Financial Statements.

WHISTLE BLOWER POLICY

The whistle blower policy adopted by the Company has been posted on its website (www.pelhakoba.com)

REMUNERATION AND NOMINATION POLICY

The Company does not have any formal policy in relation to remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The details of payments made to the Directors are attached to and form part of this Report.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and thus provisions of Section 188 of the Companies Act, 2013 are not attracted. The disclosure in Form AOC-2, is accordingly, not required.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR 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.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under section 134(5) of the Companies Act, 2013, your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts for the year 2014-15, the applicable Accounting Standards have been followed;

(ii) The accounting policies selected and applied are consistent and the judgments and estimates made 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 year and of the net profit of the Company for the year;

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

(iv) The annual accounts have been prepared on a going concern basis.

(V) The Directors had laid down adequate internal financial controls to be followed by the Company and these are operating effectively.

(vi) Adequate and proper systems to ensure compliance with all applicable laws have been devised and such systems are operating effectively in the Company.

STATUTORY AUDIT

M/s M BAH & CO, Chartered Accountants (Firm Registration No. 121426W), statutory auditors of the Company, hold office up to the forthcoming Annual General Meeting and are recommended for appointment to audit accounts of the Company from the conclusion of this Annual General Meeting to the conclusion of 26th Annual General Meeting of the Company i.e. for a period of 3 years. M/s M B A H & CO have submitted written confirmation to the Company that their appointment, if made, will be in conformity with the limits specified under Section 139 of the Companies Act 2013.

COST AUDIT

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Vipul Bhardwaj & Co., Cost accountants, as Cost Auditor to audit the cost accounts of the Company for the year 2015-16 at a remuneration of RS.50,000 plus service tax as applicable and reimbursement of out of pocket expenses. A resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT

As required under Section 204 of the Companies Act 2013, and rules made thereunder, the Company has appointed M/s Sanjay Dholakia & Associates, a firm of Company Secretaries in Practice (Registration No. 2655) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - B and forms an integral part of this Report.

The Secretarial Audit Report does not contain any qualification for the year under review.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your company has an effective internal control and risk mitigation system, commensurate with its size. The Audit Committee of the Board actively reviews the adequacy and effectiveness of the systems.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of CSR activities under Companies Act 2013 do not apply to your company.

SAFETY, HEALTH & ENVIRONMENT

As hitherto, all efforts were taken to ensure safety in the operation of the Plants, promote health and protect the environment. The health of the Employees is being continuously monitored and environment improvement measures in and around the Plant area are being given due care and attention.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Your company regularly conducts technical and safety training programmes.

PARTICULARS OF EMPLOYEES

The Company does not have any employee whose particulars are required to be furnished In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

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

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, are attached as Annexure-C to this report.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the Government authorities, Shareholders, Valued Customers, Company''s Bankers, Raw Material Suppliers, and other Business Associates for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the revival of your Company.

For and on behalf of the Board of Directors

Place : Mumbai. RAJ KUMAR SEKHANI Date : May 21,2015 Chairman

Mar 31, 2013

To, The Members of PIONEER EMBROIDERIES LIMITED

The Directors present their Twenty First Report on the business and operations of your Company for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS:

(Rs.in lacs)

For the year ended For the year ended 31st March, 2013 31st March, 2012

Turnover Â Domestic 22,379.37 17,690.87

Â Export 1,669.32 3,039.21

Total 24,048.69 20,730.08

Profit /(Loss) before Other Income, Financial Charges, Depreciation,

Exceptional Items & Tax 1,489.32 860.82

Other Income 683.68 2,246.61

Profit /(Loss) before Financial Charges, Depreciation, Exceptional Items & Tax 2,173.00 3,107.43

Financial Charges (net) 1,532.19 1,540.13

Profit /(Loss) before Depreciation, Exceptional Items and Tax 640.81 1,567.30

Depreciation 1,266.18 1,213.48

Profit/(Loss) before Exceptional Items & Tax (625.37) 353.82

Exceptional Items (net) 861.80 764.27

Provision for Deferred Tax Liability/(Asset) 1,851.00 (38.20)

Net Profit/(Loss) (3,338.18) (372.25)

Balance of net loss brought forward from previous year (732.31) (360.06)

Balance of Profit/(Loss) carried forward (4,070.49) (732.31) Per share data

Basic Earnings per Share (Q) (25.41) (2.88)

Book Value per Share (Rs.) 37.50 68.98

YEAR IN RETROSPECT

Profit before Other Income, Finance Costs, Depreciation, Tax and Exceptional Items for the year stood at Rs.1,489.32 lacs (Rs.860.82 lacs). However, due to high finance costs and depreciation and lower other income compared to previous year, the Loss before Tax and Exceptional Items for the Company stood at Rs.625.37 lacs (Profit of Rs.353.82 lacs). The Net Loss after providing deferred tax, stood at Rs.3,338.18 lacs (Rs.372.25 lacs).

During the year under review, the Dope Dyed Polyester Yarn (DDPY) business reported increase in turnover and EBIDTA levels. The turnover has grown to Rs.17,809 lacs (Rs.15,613 lacs), an increase of 14%. The operating margins also improved marginally, and EBIDTA for the year stood at Rs.1,289 lacs (Rs.1,121 lacs). The growth in turnover was driven by higher capacity utilization and continued thrust on value-added sales. The Company was able to establish its Micro Denier High Bulk Yarns in the market as a substitute to Nylon and Cotton Yarns, thus mainly targeting the Bath Mats and Carpets industry segments. The higher realizations from these segments enabled the division to maintain the margins despite increase in cost of inputs viz. raw material, labour and power, as also the adverse movement in Rupee vis-Ã -vis the US Dollar. Paucity of working capital has also impacted profitability as share of exports in the total turnover came down.

The Embroidery and Laces division continued to show improved performance with an increased turnover of Rs.5,385 lacs (Rs.4,031 lacs) and an EBIDTA of Rs. 660 lacs (Rs.142 lacs).

The improved performance was achieved despite old machineries, higher raw material costs and stiff competition from unorganized sector. Focused attention on building operating efficiencies, optimum utilization and regular maintenance of available equipment, improved marketing efforts have aided the performance. Pioneer has also relied on its designing capabilities to lower costs and offer a product-mix which helped in maximizing the contribution.

R&D efforts, specially in the DDPY segment remain central to the operations of your Company. A varied product range and flexible infrastructure are enabling tools in these efforts. Inter-Fibre replacements usage particularly in the Non-Apparel industries like Furnishing, Carpets, andother Niche segments has been the focus of these efforts presently. Your Company aims to meet increasing market demand and to achieve strong earning growth by focusing more on high-margin product mix. The operating performance is thus expected to improve further in the coming years.

INDUSTRY OVERVIEW

The external environment has been hostile for Textile Industry and particularly Filament Yarn Industry as a whole on account of rising Raw material prices and oversupply situation in the industry. PIONEER is able to distinguish itself due to its established position as a Value-Added Yarn Supplier having been able to cater to end-to-end solutions and Niche Segments. This is only possible due to a vast product range and an infrastructure which facilitates flexible production planning.

However, due to a phased implementation of the expanded capacity and deferment of value-added machinery corresponding to the FDY capacity enhanced, there has been a delay in expanding margins. Although the market for Dope Dyed Yarns has increased multifold, almost every Filament Spinning Plant has been forced to diversify in this segment due to reduced margin in Normal Commodity Yarns. On account of increase in suppliers and competition, the margins in direct sale of FDY have been declining. Following factors are mainly responsible for the pressure on EBIDTA margins:

1. Higher Raw Material Prices;

2. Increased Competition for Sale of FDY directly;

3. Steep rise in Labour & Power Cost and intermittent disturbances due to labour absenteeism.

YEAR IN PROSPECT:

The Company plans to consolidate its position as a value-added yarn producer providing end-to-end solutions. With better value-added capacity utilization, we are confident to achieve value-added sales component of 65%-70% in place of 53% currently, which should lead to improvement in the overall margins.

Further the Company plans to expand its spinning capacity as well in the short run to keep its overhead per unit at a sustainable level. The building required for the spinning capacity addition is already in place.

A review of the performance during the year is given under the section Management Discussion and Analysis Report.

CORPORATE DEBT RESTRUCTURING

As reported in the last year, your Company had approached its lenders to rework the restructuring scheme. However, the lenders are yet to approve the reworked package. The Company had in the mean time put in place the TRA mechanism and a sum of Rs.800 lac was cut back from the operations and retained by the bankers during the year in the TRA Account. Your Company has also offered a ÂOne Time Settlement (OTS)" to the lenders and has successfully negotiated OTS with Axis Bank and ICICI Bank. The payment to Axis Bank under OTS was completed during the reporting year itself, while payments to ICICI Bank are in progress. Efforts to reach some sort of debt restructuring, in line with the current business operating scenario, with other lenders are also being pursued.

The formal agreement for settlement of outstanding FCCBs of USD 11 million, which are already matured for payment in the reporting year, was delayed due to change in the Administrators, thereof. The new Administrators have now approached the Company and the settlement is expected to be formalized during the current fiscal.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, Delhi and Kolkata. The Company had applied for delisting the Company''s Equity Shares from the Stock Exchanges at Delhi and Kolkata but has not yet to receive the permission for delisting from these Stock Exchanges.

The Company has paid the listing fees for the year to all the stock exchanges, where the shares of the Company are listed.

DIVIDEND

In view of accumulated losses, the Directors have not recommended any dividend for the year.

CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs (MCA) by General Circular No.2/2011 dated 8th February, 2011, issued a direction under Section 212(8) of the Companies Act, 1956 that the provisions of Section 212 shall not apply to companies in relation to their subsidiaries, subject to fulfilling certain conditions mentioned in the said circular with immediate effect. The Board of Directors of your Company at its meeting held on June 4, 2013, approved the Audited Consolidated Financial Statements for the financial year 2012-13 in accordance with the Accounting Standard (AS-21) and other Accounting Standards issued by the Institute of Chartered Accountants of India as well as Clause 32 of the Listing Agreement, which include financial information of its subsidiary, and forms part of this report. The Consolidated Financial Statements of your Company for the financial year 2012-13, are prepared in compliance with applicable Accounting Standards and where applicable Listing Agreement as prescribed by the Securities and Exchange Board of India.

The annual accounts and financial statements of the subsidiaries of your Company and related detailed information shall be made available to members on request and are open for inspection at the Registered Office of your Company. Your Company has not attached the financial statements of its subsidiaries for the financial year 2012-13. A statement of summarized financials of the subsidiary of your Company including capital, reserves, total assets, total liabilities, details of investment, turnover, etc., pursuant to the General Circular issued by Ministry of Corporate Office, forms part of this report.

SUBSIDIARY COMPANIES

The gross sales of the Hakoba Lifestyle Limited in current year stood at Rs.79 lacs as compared to Rs.586 lacs during previous year. Loss after tax and exceptional item stood at Rs.1,005 lacs as compared to Rs.713 lacs during previous year.

The gross sales of Mas Embroideries Private Limited in current year stood at Rs.Nil (Rs.9 lacs). The Company has incurred a net loss of Rs.0.72 lac as compared to net profit of Rs.163 lacs (basically on account of exceptional income in previous year).

Pioneer Realty Ltd. had no activity during the year.

S.R Investments Limited has investment holding as a principal activity and has incurred net loss of Rs. Nil (Rs.5 lacs) excluding service charges payable to the Company.

The statement of subsidiaries pursuant to section 212 of the Companies Act, 1956 is attached and forms part of this report.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company are under compulsory dematerialisation mode. As on date, shares representing 97.91% of the share capital are in dematerialised form. As the Depository System offers numerous advantages, Members are requested to take advantage of the same and avail of the facility of dematerialisation of the Company''s shares.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits within the meaning of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 and as such no amount of principal or interest was outstanding as on the Balance Sheet date.

SAFETY, HEALTH & ENVIRONMENT

As hitherto, all efforts were taken to ensure safety in the operation of the Plants, promote health and protect the environment. The health of the Employees is being continuously monitored and environment improvement measures in and around the Plant area are being given due care and attention.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of businesses. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Your company regularly conducts technical and safety training programmes.

PARTICULARS OF EMPLOYEES

The Company does not have any employee whose particulars are required to be furnished In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

DIRECTORS

M r. Arvind Ratan Sinha retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured against risk of fire and other risks.

ACCOUNTING STANDARDS AND CONSOLIDATED FINANCIAL STATEMENTS

A company, whose securities are listed on the Stock Exchanges, is compulsorily required to follow the Accountings Standards prescribed by the Institute of Chartered Accountants of India. As a consequence, the Company is obliged to make a provision for deferred tax assets net of deferred tax liability in the accounts the Company has reversed deferred tax assets of Rs.1,851 lacs , in the year under review in view of continuous losses in the recent years. The deferred tax assets shall be created again on turnaround of the company.

In accordance with the Accounting Standard -21 on Consolidated Financial Statement read with Accounting Standard -27 on Financial Reporting of Interest in Joint Venture, your Directors provide the Audited Consolidated Financial Statements in the Annual Report.

AUDITORS

M/s M B A H & CO, Chartered Accountants are to be appointed as Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting of the Company and to fix their remuneration.

AUDITOR''S REPORT

The observations made in the Auditor''s Report to the shareholders are self-explanatory. The qualifications by auditors, are either self-explanatory or are explained in notes to accounts.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

(I) In the preparation of the Annual Accounts for the year 2012-13, the applicable Accounting Standards have been followed, except otherwise stated in Notes to Accounts and Accounting Policies;

(ii) The accounting policies selected and applied are consistent and the judgments and estimates made 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 year and of the loss of the Company for the year;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Report on Corporate Governance with Auditors Certificate on Compliance with the conditions of Corporate Governance and a Management Discussion & Analysis Report has been attached to form part of the Annual Report.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are attached as Annexure to this report.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the CDR-Cell, Government authorities, Shareholders, Valued Customers, Company''s Bankers, Financial Institutions, Raw Material Suppliers, and other Business Associates for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the growth of your Company.

For and on behalf of the Board of Directors

RAJ KUMAR SEKHANI

Place : Mumbai. Chairman

Date : June 4, 2013.

Mar 31, 2010

The Directors present their Eighteenth Report on the business and operations of your Company for the period ended 31st March, 2010.

FINANCIAL HIGHLIGHTS:

(Rs. in lacs)

For the period ended For the year ended

31st March, 2010 30th September, 2009

(6months) (12 months)

Turnover - Domestic 7,536.49 11,740.57

-Export 249.57 564.48

Total 7,786.06 12,305.05

Profit /(Loss) before Financial Charges, Depreciation, Exceptional Items a Tax 377.91 498.96

Financial Charges 768.42 1,628.63 Profit /(Loss) before Depreciation, Exceptional Items and Tax (390.51) (1,129.67)

Depreciation 599.52 1,125.22

Profit/(Loss) before Exceptional Items a Tax (990.03) (2,254.89)

Exceptional Items 1592.09 -

Provision for Deferred Tax Liability /(Asset) (159.90) (1,704.60)

Provision for Fringe Benefit Tax - 4.90

Profit/(Loss) after Tax 761.96 (555.19)

Income Tax for earlier years 176.30 (0.77)

Net Profit/(Loss) 585.66 (554.42)

Balance of net profit brought forward from previous year (1,040.73) (486.31)

Disposable Profits/(Loss) (455.07) (1,040.73)

Balance of Profit/(Loss) carried forward (455.07) (1 040 73) Per share data

Basic Earning per Share (Rs.) 4.80 (4.54)

Book Value per Share (Rs.) 38.93 18.10

PERIOD IN RETROSPECT

Profit before interest, depreciation, taxand exceptional items for the period stood at Rs.377.91 lacs (Rs.498.96 lacs). However, with high interest cost and depreciation, loss before tax and exceptional items for the Company stood at Rs.990.03 lacs (Rs.2254.89 lacs) and profit after providing tax/deferred taxasset, stood at Rs.585.66 lacs (loss of Rs.554.42 lacs).

During the period under review, the Dope Dyed Polyester Yarn (DDPY) business has achieved encouraging operational performance with a turnover of Rs.4,963 lacs (Rs.6,619 lacs) and EBIDTAof Rs.731 lacs (Rs.959 lacs).

Though DDPY business continued to provide higher turnover and EBIDTA vis a vis projected level under the CDR package, the Embroideries and Laces business suffered due to overall margin pressure as prevalent in Indian Textile Industry coupled with the high cotton prices a stiff competition from unorganized sector and severe power shortage in Tamilnadu.

Your Company continued to enhance the thrust on its RBD capabilities in the DDPY segment and is in the process to expand the installed capacity of DDPY division. The move is with aim to meet increasing market demand and also to achieve strong earning growth supported by volume growth and focusing more on high margin product mix.

Leveraging on the projected growth forecasts, high sales volumes of DDPY and operational flexibility, your Company expects improved operating performance during the next financial year.

A review of the performance during the period is given under the section Management Discussion and Analysis Report.

CORPORATE DEBT RESTRUCTURING

As reported last year, the debt restructuring proposal under Corporate Debt Restructuring (CDR) mechanism has been implemented and the banks and other lenders have classified and restructured accounts as per restructuring scheme.

The impact of CDR package, excluding allotment of 9% OCCRPS to be carved out of Term Loans, has been considered in the accounts and pending allotment of OCCRPS, the interest on the said carved out portion has been provided in the accounts and the treatment of such interest shall be made upon decision by CDR-EG in this regard.

In the EOGM held on 22nd June, 2010, the members had approved the said allotment of OCCRPS as well as allotment of equity shares to the Promoters as per CDR approved package. In the Board meeting held on 27th August, 2010, the Company has allotted 2,75,53,610 Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) of Rs.10/- each aggregating Rs.275,536,100 to all secured lenders, except to ICICI Bank Ltd. for want of RBI approval to its restructured ECB.

The Company has settled the dues of unsecured lenders in terms of CDR package and payments are being made as per settlement arrived with them.

Out of total outstanding FCCBs of USD 28 million, the Company has so far settled and bought back a total FCCBs worth USD 16.25 million (face value) by making payment of USD 4.50 million and further by converting FCCBs worth USD 7.50 lacs into 3,26,305 equity shares of Rs.10/- each to Bondholders. For balance FCCBs of USD 11 million, the Company and Bondholders have entered into an agreement for buy back of FCCBs for a sum of USD 2.40 million by 31 st December, 2010.

Your Directors are hopeful that upon the implementation of the CDR Package in entirety, the Company shall be able to revive its operational plan and profitability.

BUSINESS RESTRUCTURING

As reported last year and in terms of CDR package, the monetization of unencumbered property at Borivli (Mumbai) has been completed and the proceeds were used to settle part of the outstanding FCCBs and other unsecured lenders.

One of the secured lenders, ING Vysya Bank Ltd., who had initiated recovery proceedings before DRT, has arrived at a settlement with the Company for an OTS of Rs. 12.00 crore against its suit claim of Rs. 18.27 crore and filed consent terms on 11 th March, 2010 before the DRT. As per the consent terms, the Company has entered into a tripartite agreement dated 15th April, 2010 with ING bank and the buyer for sale of land and building at Bangalore for a sum of Rs. 16.00 crore to pay the part settled amount. So far a sum of Rs.8.00 crore has been paid to ING bank as per consent terms and balance Rs.4.00 crore shall be paid by 30th September, 2010. The effect of the said settlement with ING bank shall be given in the current year.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, Delhi and Kolkata. The Company had applied for delisting the Companys Equity Shares from the Stock Exchanges at Delhi and Kolkata and yet to receive the permission for delisting from these Stock Exchanges.

The Company has paid the listing fees for the period to all the stock exchanges, where the shares of the Company are listed.

DIVIDEND

in view of accumulated losses, the Directors have not recommended any dividend for the period ended 31 st March, 2010.

SUBSIDIARY COMPANIES

The gross sales of the Hakoba Lifestyle Limited in current period decreased to Rs.552 lacs from Rs.1830 lacs as compared to previous year. Loss after tax stood at Rs.768 lacs as compared to Rs.647 lacs during previous year.

The gross sales of Mas Embroideries Private Limited in current year ended 31st March, 2010 stood at Rs.171 lacs (Rs.171 lacs). The Company has incurred a net loss of Rs.55 lacs as compared to net loss of Rs.5 lacs in previous year.

Pioneer Realty Ltd. had no activity during the year.

S. R Investments Limited has investment holding as a principal activity and has incurred net loss of Rs.4.30 lacs excluding service charges payable to the Company.

The Balance Sheet, Profit and Loss Account, Auditors Report and Directors Report of its subsidiaries, Hakoba Lifestyle Limited, Mas Embroideries Private Limited, and Pioneer Realty Limited have been attached.

The statement of subsidiaries pursuant to section 212 of the Companies Act, 1956 is attached and forms part of this report.

RETAIL

Hakoba Lifestyle Limited, a subsidiary of your Company, is in retail business with the well known Brand name "Hakoba".

As reported earlier, the Company could revamp the retail business by closing non-profitable stores and opening fewer profitable outlets. Presently, Hakoba is operating 23(40) stores with a mix of franchisee and company run stores.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company are under compulsory dematerialisation mode. Till date, shares representing 96.88% of the share capital are in dematerialised form. As the Depository System offers numerous advantages, Members are requested to take advantage of the same and avail of the facility of dematerialisation of the Companys shares.

FIXED DEPOSITS

During the period under review, the Company has not accepted any Deposits within the meaning of Section 58Aof the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 and as such no amount of principal or interest was outstanding as on the Balance Sheet date.

SAFETY, HEALTH & ENVIRONMENT

No efforts have been spared to ensure safety in the operation of the Plants, promote health and protect the environment. The health of the Employees is being continuously monitored and environment improvement measures in and around the Plant area have been given due care and attention.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of businesses. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Technical and safety training programmes are given priority.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the particulars of employees are set out in annexure to this Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act read with the Clause 32 of the Listing Agreement, the Annual Report excluding the aforesaid information is being sent to all the members. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office at the Company.

DIRECTORS

Mr. Anand Kumar Jain retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Harsh Vardhan Bassi has been reappointed as Executive Director for a further term of three years commencing from 29th October, 2010 and ending on 28th October, 2013.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured against risk of fire and other risks.

ACCOUNTING STANDARDS AND CONSOLIDATED FINANCIAL STATEMENTS

A company, whose securities are listed on the Stock Exchanges, is compulsorily required to follow the Accountings Standards prescribed by the Institute of Chartered Accountants of India. As a consequence, the Company is obliged to make a provision for deferred tax liability net of deferred tax asset in the accounts. In the period under review, the Company has provided deferred tax assets of Rs.159.90 lacs, and the total outstanding deferred tax assets as on31st March, 2010 stood at Rs. 1771.00 lacs.

In accordance with the Accounting Standard -21 on Consolidated Financial Statement read with Accounting Standard- 27 on Financial Reporting of Interest in Joint Venture, your Directors provide the Audited Consolidated Financial Statements in the Annual Report.

AUDITORS

M/s M B A H a CO (formally Bhageria Naredi a Associates) and M/s R. Kabra & Co., Chartered Accountants are to be appointed as Joint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting of the Company and to fix their remuneration.

AUDITORS REPORT

The Auditors Report to the shareholders is self-explanatory and qualifications, wherever stated by auditors, have been either explained in notes to accounts and are also self-explanatory.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts for the period 2009-10, the applicable Accounting Standards have been followed, except otherwise stated in notes to Accounts and Accounting Policies;

(ii) The accounting policies selected and applied are consistent and the judgments and estimates made 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 period and of the profit of the Company for the period;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 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.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Report on Corporate Governance with Auditors Certificate on Compliance with the conditions of Corporate Governance and a Management Discussion a Analysis Report has been attached to form part of the Annual Report.

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

The particulars as prescribed under Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are attached as Annexure to this report.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the CDR-Cell, Government authorities, Shareholders, Valued Customers, Companys Bankers, Financial Institutions, Raw Material Suppliers, and other Business Associates for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the growth of your Company.

For and on behalf of the Board of Directors

Place : Mumbai. RAJ KUMAR SEKHANI

Date : 27th August, 2010. Chairman

Sep 30, 2009

The Directors present their Seventeenth Report on the business and operations of your Company for the year ended 30th September, 2009.

FINANCIAL HIGHLIGHTS:

(Rs. in Lacs)

For the year ended For the 18 Months 30th September, 2009 Period ended 30th September, 2008

Turnover -Domestic 11,740.57 22,718.84

-Export 564.48 1,771.86

Total 12,305.05 24,490.70

Profit/(Loss) before Financial Charges, Depreciation a Tax 498.96 (2,058.69)

Financial Charges 1,628.63 2,387.51

Profit/(Loss) before Depreciation and Tax (1,129.67) (4,446.20)

Depreciation 1,125.22 1,461.44

Profit/(Loss) before Tax (2,254.89) (5,907.64) Provision for tax for current year Provision for Deferred Tax Liability/(Asset) (1,704.60) 183.70

Provision for Fringe Benefit Tax 4.90 20.00

Profit/(Loss) after Tax (555.19) (6,111.34)

Income Tax for earlier period (0.77) 57.64

Net Profit/(Loss) (554.42) (6,168.98)

Balance of net profit brought forward from previous period (486.31) 2,878.24

Disposable Profits/(Loss) (1,040.73) (3,290.74) Appropriations .

Transfer to/from General Reserve -- 2,804.43

Balance of Proflt/(Loss) carried forward (1,040.73) (486.31) Per share data Basic Earning per Share (Rs.) (4.54) (51.92)

Book Value per Share (Rs.) 18.10 22.64

YEAR IN RETROSPECT

Profit before interest, depreciation, tax and exceptional items for the year stood at Rs. 583.51 lacs (Rs. 1311.04 lacs). However, with high interest cost, depreciation and write offs loss before tax for the Company stood at Rs. 2,254.89 lacs (Rs. 5,907.64 lacs) and loss after providing tax/ deferred tax asset, stood at Rs. 554.42 lacs (Rs. 6,168.98 Lacs) The internal and external factors responsible for the losses are:

a) Pending implementation of CDR package, need based working capital limits were not released resulting into liquidity and working capital problems.

b) Approx 20% production under Embroidery division were outsourced due to lack of raw materials.

c) High raw materials prices of cotton.

d) Overall margin pressure as prevalent in Indian Textile Industry and stiff competition from unorganized sector as well.

e) Increase in depreciation and higher interest burden on account of huge expansion /acquisitions.

f) Rupee appreciation as well as economic slow down affected the export orders, resulting in lower sales from embroidery fabrics to export houses.

g) Severe power shortage in Tamilnadu also affected capacity utilization.

h) Closure of one of Embroidery units at Bangalore.

A review of the performance during the year is given under the section Management Discussion and Analysis Report.

CORPORATE DEBT RESTRUCTURING

As reported last year, the debt restructuring proposal under Corporate Debt Restructuring (CDR) mechanism was approved by CDR-EG at its meeting held on 31st January, 2009 and necessary Letter of Approval (LOA) was issued by CDR Cell on 17th February, 2009 to enable the Company to correct its working capital position and to reschedule its term debts in line with potential earnings.

For the purpose of implementation of the approved package, State Bank of India has been appointed as the Monitoring Institution (Ml) to oversee the implementation of the package.

Now, banks and other lenders are in the process to classify and restore accounts as per restructuring scheme. The Company is regrouping and finalizing accounts in terms of the said approved scheme. As per CDR package a sum of Rs. 32.89 Crore shall be carved out of present term loans and proposed Working Capital Term Loan (WCTL) into 9% Optionally Convertible Cumulative Redeemable Preferential Share (OCCRPS) redeemable from 7th to 10th year equally and the same is pending for want of some clarifications from Stock Exchange and CDR-EG.

The impact of the CDR package excluding allotment of OCCRPS as above in respect of Secured Lenders except ING Vysya Bank Ltd has been considered in the accounts for the year under review. The Company has approached unsecured lenders and FCCB holders to accept the CDR approved package and process of negotiation is on.

Your Directors are hopeful that upon the implementation of the CDR Package in entirety, the Company shall be able to revive its operational plan and profitability.

BUSINESS RESTRUCTURING

In terms of CDR package the sale of unencumbered property at Borivali (Mumbai) and property at Bangalore has been mapped and proceeds are to be used to settle the outstanding FCCBs.

The Asset Sale Committee as constituted under CDR mechanism, had recommended to CDR-EG the sale price of Rs. 25.00 crores (including Rs. 6.50 Crores already received) in respect of sale of Borivali property to Joint Developer M/s Sunteck Realty Ltd., which was duly approved by CDR-EG on 30th September, 2009. The necessary conveyance for sale of Borivali property is in the process and a sum of Rs. 2.00 crore has been received from the purchaser and the balance proceeds shall be received upon conveyance.

One of the Secured Lenders, ING Vysya Bank Ltd., had refused to sign the Master Restructuring Agreement (MRA) and had initiated recovery proceedings before DRT as well as under SARFAESI Act. ING has taken forcible physical possession of Bangalore property by invoking the provisions of SARFAESI Act and had advertised in the newspaper for sale of property by inviting tenders / bids.

The Company has filed an appeal in the DRT against ING Vysya Bank Ltd. with regard to INGs recovery and against forcible physical possession and got an stay in the matter restricting ING not to sell or otherwise dealt with the Bangalore property.

LISTING

The Equity Shares of the Company are listed with the BSE, NSE, Delhi and Kolkata. The Company has applied for delisting the Companys Equity Shares from the Stock Exchanges at Delhi and Kolkata and yet to receive the permission for delisting from these Stock Exchanges.

The Company has paid the listing fees for the period to all the stock exchanges where the shares of the Company are listed.

DIVIDEND

In view of losses, the Directors have not recommended any dividend for the year ended 30th September, 2009.

SUBSIDIARY COMPANIES

The gross sales of the Hakoba Lifestyle Limited in current year decreased to Rs. 1830 lacs from Rs. 5236 leas as compared to previous period of 18 months. Loss after tax stood at Rs. 647 lacs as compared to Rs. 4039 lacs during previous period.

The gross sales of Mas Embroideries Private Limited in current year ended 31st March, 2009 increased to Rs.171 lacs from Rs.170 lacs as compared to previous year. The Company has incurred a net loss of Rs. 5 lacs as compared to net loss of Rs.8 lacs in previous year.

Pioneer Realty Ltd. had no activity during the period.

S.R Investments Limited has investment holding as a principal activity and has incurred net loss of Rs.6 lacs excluding service charges payable to the Company.

The Balance Sheet, Profit and Loss Account, Auditors Report and Directors Report of its subsidiaries, Hakoba Lifestyle Limited, Mas Embroideries Private Limited, and Pioneer Realty Limited has been attached.

The statement of subsdiaries pursuant to section 212 of the Companies Act, 1956 is attached and forms part of this report.

RETAIL

Hakoba Lifestyle Limited, a subsidiary of your Company, is in retail business with the well known Brand name "Hakoba".

As reported earlier the Company could revamp the retail business by closing non-profitable stores and opening fewer profitable outlets, resulting into positive EBIDTA during the current year. Presently, Hakoba is operating 40 stores with a mix of franchisee and company run stores.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company are under compulsory dematerialisation mode. Till date, shares representing 96.84% of the share capital are in dematerialised form. As the Depository System offers numerous advantages, Members are requested to take advantage of the same and avail of the facility of dematerialisation of the Companys shares.

FIXED DEPOSITS

During the period under review, the Company has not accepted any Deposits within the meaning of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 and as such no amount of principal or interest was outstanding as on the Balance Sheet date.

SAFETY, HEALTH & ENVIRONMENT

No efforts have been spared to ensure safety in the operation of the Plants, promote health and protect the environment. The health of the Employees is being continuously monitored and environment improvement measures in and around the Plant area have been given due care and attention.

HUMAN RESOURCE

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of businesses. The Company takes various HR initiatives to align the HR policy to the growing requirements of business.

Technical and safety training programmes are given priority

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the particulars of employees are set out in annexure to this Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act read with the Clause 32 of the Listing Agreement, the Annual Report excluding the aforesaid information is being sent to all the members. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office at the Company.

DIRECTORS

During the year under review, Mr. Anand Kumar Jain was inducted on the Board as Additional Director w.e.f. 20th July, 2009. As per the provisions of Companies Act, 1956 and those contained in the Articles of Association of the Company, his appointment as the Director of the Company requires the approval of shareholders at the ensuing Annual General Meeting of the Company.

Mr. Rajeev Jagdish Puri, Mr. Varad Khanna and Mr. Varun Kathuria have resigned as Directors of the Company w.e.f. 29th April, 2009, 1st February, 2009 and 31st July, 2009 respectively. The Board appreciates the services rendered by them during their tenure of office as Directors.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured against risk of fire and other risks.

ACCOUNTING STANDARDS AND CONSOLIDATED FINANCIAL STATEMENTS

A company, whose securities are listed on the Stock Exchanges, is compulsorily required to follow the Accountings Standards prescribed by the Institute of Chartered Accountants of India. As a consequence, the Company is obliged to make a provision for deferred tax liability net of deferred tax asset in the accounts. In the year under review, the Company has provided deferred tax assets of Rs. 1704.60 lacs, and the total outstanding deferred tax assets as on 30th September, 2009 stood at Rs. 1611.10 lacs.

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statement read with Accounting Standard AS-27 on Financial Reporting of Interest in Joint Venture, your Directors provide the Audited Consolidated Financial Statements in the Annual Report.

AUDITORS

M/s Bhageria Naredi & Associates and M/s R.Kabra & Co. are to be appointed as Joint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting of the Company and to fix their remuneration.

AUDITORS REPORT

The Auditors Report to the shareholders is self-explanatory and qualifications, wherever stated by auditors, have been either explained in notes to accounts and are also self-explanatory.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts for the year 2008-09, the applicable Accounting Standards have been followed except otherwise stated in notes to Accounts and Accounting Policies;

(ii) The accounting policies selected and applied are consistent and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the financial year;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Report on Corporate Governance with Auditors Certificate on Compliance with the conditions of Corporate Governance and a Management Discussion 6 Analysis Report has been attached to form part of the Annual Report.

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

The particulars as prescribed under Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are attached as Annexure I to this report.

ACKNOWLEDGEMENT

The Management of your Company is grateful to the CDR-Cell, Government authorities, Shareholders, Valued Customers, Companys Bankers, Financial Institutions, Raw Material Suppliers, and other Business Associates for their continued support and co-operation.

The Directors also wish to place on record their appreciation of the co-operation, active involvement and dedication of the employees, which enabled the Management to contribute to the growth of your Company.

For and on behalf of the Board of Directors

Place: Mumbai. RAJ KUMAR SEKHANI

Date : 30th November, 2009 Chairman

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