Directors Report of Winsome Textile Industries Ltd.

Mar 31, 2018

Director’s Report

Dear Shareholders,

The Directors have pleasure in presenting the 37th Annual Report together with the Audited Financial Statements of the Company for the financial year ended 31st March, 2018.

(Rs. in lacs)

Financial Highlights	Year ended 31.3.2018	Year ended 31.3.2017
Sales	69961.82	71494.39
Profit before Interest & Depreciation	7994.23	11371.79
Less : Interest	4835.22	5434.06
Profit/(Loss) before Depreciation	3159.01	5937.73
Less : Depreciation	2470.75	2738.56
Profit/ (Loss) before Tax	688.26	3199.17
Less : Provision for Taxation - Current Tax(MAT)	153.47	1011.79
- MAT Credit	(153.47)	-
- Deferred Tax Liability/(Assets)	422.69	1.95
- MAT Credit earlier year/Charged Earlier Year	-	-
- Tax/MAT for earlier years	(280.46)	-
- Tax Adjustment for the earlier year	49.79	-
Net Profit/ (Loss) after Tax	496.24	2185.43
Add : Surplus brought from previous year	9766.38	7580.95
Less: Adjustments & amounts transferred to General Reserves	(7273.65)	-
	2988.97	9766.38
Appropriations :
Proposed Dividend	NIL	NIL
Corporate Dividend Tax	NIL	NIL
Surplus Carried to Balance Sheet	2988.97	9766.38
	2988.97	9766.38

PERFORMANCE REVIEW

During the year under review, your Company has achieved a sales turnover of Rs. 69961.82 lacs as against sales turnover of Rs. 71494.39 lacs during the previous year showing a decrease of 2.14% and a net profit (after tax) of Rs. 496.24 lacs for the year against net profit (after tax) of Rs. 2185.43 lacs during the previous year. The exports of the company for the current financial year were of Rs. 25570.84 lacs against Rs. 27896.59 lacs for the previous financial year.

The Profitability of your company in the current year has been impacted by the two major changes that have affected businesses throughout the country, especially textiles. Demonetization done in October/ November 2016, had huge impact on demand for yarn and by the time industry recovered from it, the Goods and Services Tax (GST) was implemented. Both these factors resulted in low demand of products which led to dumping of yarn in the market at low prices. Further, your Company exports substantial quantity of Yarn and Fabric but downward revision of export incentives in July 2017 post GST further resulted in poor sales realization thereon.

However, impact on the performance of the Company due to above said factors during the last year have now been greatly neutralized and performance of the Company is expected to be better during next financial year.

ACCOLADES AND RECOGNITIONS

We are delighted to inform you that your Company was conferred with Silver Trophy by ‘TEXPROCIL’ for second Highest Exports of Cotton Yarn (Processed Yarns) in the Category II for F.Y. 2016-17. Apart from this your Company is making persistent efforts to maintain its distinguish position in the competitive environment.

HYDRO POWER PROJECT OF COMPANY

The Company’s Manuni Hydroelectric Power Project (3.5 M.W.) at Dharamshala, Distt. Kangra, Manuni Khad (H.P.) has been synchronized with H.P.S.E.B.L. Grid on 31.03.2017. The Project has generated about 97 lac units during the FY 2017-18.

MODERNISATION & EXPANSION

During the year under review, the Company has taken several progressive steps for modernization cum expansion of plants. Major details are listed below:

(a) Company has installed 02 nos. of machines in dye house for the Financial Year 2017-18. (i) RF Dryer 85 KW From Stalam - This will help us in further increasing drying capacity of the dye house and (ii) Tecnorama Dyerama - Installation of said machine will increase our recipe generation and will also increase our Right First Time Dyeing (RFT).

(b) This year we have added 04 nos. new Trutzschler TC10 cards in our process. With these initiatives we will be able to enhance our value added yarn production.

(c) We have also added Carton stretch wrapping machine. Due to this installation we cover the packed carton with Poly Propylene to avoid the moisture and water inside the carton.

(d) We have added ULTRA VIOLET COTS TREATMENT MACHINE due to which we will be able to reduce the breakage at different stages and also improve the yarn quality

(e) We have added new waste collection plant for increasing the card cleaning efficiency and separation of cotton and polyester waste.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2018 was Rs. 19,82,00,000/- (comprised of 1,98,20,000 equity shares of Rs. 10/- each). During the year under review, the Company has neither issued any shares nor granted stock options or sweat equity, preference shares and also not made any provision for purchase of its own shares by employees or by trustees.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has not given any loan or provided any security / guarantee as per Section 186 of the Act during the year 2017-18. The investments under section 186 of the Act are given in the Financial Statements forming part of the Annual Report.

PUBLIC DEPOSITS

The Company has not accepted or renewed any deposits from the public during the FY 2017-18. DIVIDEND & RESERVES

Keeping in view to conserve the resources, your Directors do not recommend any dividend for the FY 2017-18. The Company has proposed to carry Rs. 7313.96 Lacs from surplus in the P&L account to General reserves.

The unclaimed dividend of FY 2010-11 is due to be transferred to Investor Education and Protection Fund in the month of August/September, 2018. The equity shares of all shareholders who have not claimed the dividend for last seven consecutive years shall also be transferred to the above said Fund. The concerned shareholders have been individually informed about the same and have been requested to encash their unclaimed dividend to avoid transfer of the same along with equity shares to the above said Fund. Although, the unclaimed dividend and shares transferred to the Fund can be claimed by the concerned shareholders even after the above said transfer by approaching the Investor Education and Protection Fund Authority.

NUMBER OF MEETINGS HELD

The details of Board and Committee Meetings are given in the Corporate Governance Report. DIRECTORS / KEY MANAGERIAL PERSONNEL

There was no change in the Directors during the FY 2017-18. Shri Ashish Bagrodia, Chairman & Managing Director shall be liable to retire by rotation at the ensuing Annual General Meeting, being eligible has offered himself for re-appointment.

As per recent notification by SEBI the non-executive Directors who have attained the age of seventy five years cannot continue as such after 1st April, 2019 unless their appointment/continuation have been approved by shareholders through special resolution. As on date, three Independent Directors of the Company, namely, Sh. Chander Mohan, Sh. Satish Girotra and Sh. Amrit Lal Batra have already attained the above said age limit. In this regard, respective resolutions have been proposed in the Notice of Annual General Meeting for variation in their appointment to the extent that they can continue to be directors even after attaining age of seventy five years.

Furthermore, there was a change in the Key Managerial Personnel during the year 2017-18. Shri Sourabh Gupta, Company Secretary & Compliance Officer has resigned w.e.f. 23rd June, 2017 and in his place Shri Videshwar Sharma has joined as Company Secretary & Compliance Officer w.e.f. 26th July, 2017

BOARD EVALUATION

As per Companies Act 2013 and Listing Regulations, Board has adopted formal mechanism for evaluating its performance and as well as that of its committees, individual Directors, including the Chairman of the Board in compliance of Companies Act 2013 and Listing Regulations. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board, its committee & members, their experience & competencies, performance of specific duties & obligations and governance etc. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) was evaluated on the basis of their own performance, expertise, intelligence, their qualitative & quantitative contribution towards operational achievements, organizational performance etc. The performance of Non-Executive Independent Directors were evaluated on the basis of their constructive participation’s in Board/Committee/General meetings, their informed & balanced decision-making, ability to monitor financial controls, systems & certain allied parameters. The performance evaluation of various Board Committees constituted under Companies Act & Listing Regulations was made on the basis of their respective terms of reference, discharge of functions, governance etc.

The separate Meeting of independent Directors was held on 03rd February, 2018 to review the performance of Non-Independent directors including the Chairman and the Board as a whole as per Code of Independent Directors under Companies Act 2013 and Listing Regulations. The Independent Directors also reviewed the quality, content and timeliness of follow of information between Management and the Board. The Performance Evaluation Policy of Board of Directors is uploaded on the Company’s website i.e. www.winsometextile.com under corporate policies.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their Remuneration. The said policy has also been uploaded on the website i.e. www.winsometextile.com of the Company. The Key provisions of Nomination and Remuneration policy are appended as an Annexure I to the Board’s report.

AUDIT COMMITTEE

The company has duly constituted an Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and Listing Regulations. The composition of the Audit Committee is given in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted the Whistle Blower Policy/Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company’s Code of Conduct and Ethics. Such mechanism/policy has also been uploaded on the website of the Company i.e. www.winsometextile.com under corporate policies.

STATUTORY AUDITORS

At the 36th Annual General Meeting of Company held on 04th September 2017, M/s B. Chhawchharia & Co., Chartered Accountants, were appointed as Statutory Auditors of Company, for a period of five years

i.e. from the conclusion of 36th Annual General Meeting of Company till the conclusion of 41st Annual General Meeting of Company, subject to the ratification of their appointment by the members at every subsequent Annual General Meeting as per the provisions of section 139 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.

Furthermore, as per the Companies Amendment Act, 2017, the above said requirement of ratification at every subsequent Annual General Meeting has been done away with. So, the approval of the shareholders have also been sought to approve the variation in terms of appointment of Statutory Auditors to incorporate such changes in their remaining tenure of appointment. After the approval of shareholders, there shall be no requirement of annual ratification of Auditor’s appointment of Statutory Auditors.

Furthermore, for the current ratification, the Company has received a Letter/certificate of Eligibility in terms of provisions of section 139 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014 from M/s B. Chhawchharia & Co., Chartered Accountants, to the effect that ratification of their appointment for the FY 2018-19, if made, would be in accordance of provisions of section 141 of the Companies Act 2013 and Rules made there under and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013, the Chartered Accountants Act 1949 and rules & regulations made there under.

AUDITOR’S REPORT

The auditor’s report is self-explanatory and requires no explanation.

COST AUDIT & AUDITOR

M/s Aggarwal Vimal & Associates, Cost Accountants were appointed as Cost Auditors of your Company for auditing the cost accounts records for the financial year 2017-18 under provisions of Section 148 of the Companies Act, 2013. They are likely to submit Cost Audit Report within the prescribed time limit.

Furthermore the Board has re-appointed M/s Aggarwal Vimal & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2018-19 on a remuneration of Rs.75,000/- (Rupees Seventy Five Thousand only). The Company has received written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be in accordance of provisions of section 148 of Companies Act 2013 and that they are not disqualified for such appointment within the meaning of section 141 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.

SECRETARIAL AUDIT & AUDITORS

Shri Ramesh Bhatia, Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for the financial year 2017-18 as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report for FY 2017-18 is appended as an Annexure II to the Board’s report. The Secretarial auditors’ report for the year under review requires no comments.

Furthermore, the Board has re-appointed Shri Ramesh Bhatia, Practicing Company Secretary as secretarial auditor of the Company for the financial year 2018-19.

RELATED PARTY TRANSACTIONS

All Related Party transactions entered during the financial year were on arm’s length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company’s Promoters, Directors Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for review under omnibus approval route. There was no material contract or arrangement or transactions with Related Party during the year. Thus, disclosure in form AOC-2 is not required.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the rules there under and Listing Regulations. This Policy as considered and approved by the Board has also been uploaded on the website i.e. of the Company at http://www.winsometextile.com/files/pdf/68-63-file.pdf.

PARTICULARS OF EMPLOYEES

The information under 197 read with rule 5(1), 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules is appended as an Annexure III & Annexure IV to the Board Report.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as an Annexure V to the Board’s report.

INDUSTRIAL RELATIONS

The company maintained healthy, cordial and harmonious industrial relations at all levels. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks through well-defined risk management policy/ procedures, which in the opinion of the Board may threaten the existence of the Company. The Company has in place a mechanism to inform the Board about the risk assessment and minimization procedures and periodical review to ensure that management controls risk through means of a properly defined framework.

The Company has formulated and adopted Risk Management Policy to prescribe risk assessment, management, reporting and disclosure requirements of the Company. The said policy is available on the website of the Company i.e. www.winsometextile.com.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has laid down adequate internal financial controls with reference to financial statements.

During the year such controls were tested and no material weakness in their operating effectiveness was observed.

Further, the Company has an adequate system of internal control system in place commensurate with its size and operations. It ensures that all transactions are authorized, recorded and reported correctly. To maintain its objectivity and independence, an in-house Internal Audit Department of Company continuously monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating system, accounting procedures and policies/SOP’s at all the location of the Company. Significant audit observation and corrective actions thereon are presented to Audit Committee. The Audit Committee regularly reviews the reports submitted by Internal Audit Department.

ASSOCIATES AND SUBSIDIARIES

The Company has no Associates & Subsidiaries as on March 31, 2018.

OVERSEAS BRANCH

During the year, Company has got approval to open a Branch office in Poland from respective authorities. The concerned branch shall cater to the textile market in the Central Europe. The said branch is likely to operational in second quarter of FY 2018-19.

CORPORATE GOVERNANCE AND COMPLIANCE WITH SECRETARIAL STANDARDS

As per the provisions of Listing Regulations, a separate Report on Corporate Governance practices followed by the Company together with a Certificate from the Practicing Company Secretary, confirming compliance forms part of this report. Furthermore, the Company has complied with Secretarial Standards issued by Institute of Company Secretaries of India on Board Meetings and General Meetings.

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

As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are appended as an Annexure VI to the Board’s Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

It is the Company’s intent to establish itself and remain as a responsible Corporate entity conscious of its social responsibilities towards its work force, society and environment. Corporate Social Responsibility (CSR) policy is framed under provisions of Section 135 of Companies Act 2013 & rules made there under having following major objectives:

- To identify and formulate projects and areas in response to the needs of society and to implement them with full involvement and commitment in a time bound manner.

- To adopt an approach that aims at achieving a greater balance between social and economic development.

- To implement CSR Activities/CSR programmes primarily in the economic vicinity Company’s operations with a view to ensuring the long term sustainability of such interventions.

- Contribution to the society at large by way of socio-economic activities and social awareness ensuring that benefits reach the targeted beneficiaries.

- To comply with the requirements of Companies Act and all other applicable Acts, Rules, Regulations framed by the Government.

The CSR activities may be focused not just around units/plants and offices of the Company, but also in other geographies based on the needs of the communities/society. In pursuance to CSR Policy, Company has decided to conduct or undertake all or any of prescribed activities/activity/sub-activity, as mentioned in Schedule VII of the Companies Act 2013 and rules & regulations made there under, (as amended). The Corporate Social Responsibility (CSR) Committee of Company regularly monitor/review the CSR activities/CSR projects, its mechanism & other prescribed activities/matters. CSR policy is available on website of Company at following we blink: http://www.winsometextile.com/files/pdf/68-59-file.pdf. Annual Report on Corporate Social Responsibility [CSR] activities is appended as an Annexure VII

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s operations.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(3)(c) and 134(5) of Companies Act, 2013, it is hereby confirmed that:

- in the preparation of annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed and that there are no material departures;

- the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit or loss of the Company for the year ended on that date;

- the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

- the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively;

- the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequately and operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have submitted the Declaration of Independence, as required pursuant to provisions of section 149 of Companies Act 2013 and under Listing Regulations, stating that they meet the criteria of independence as provided in said section/relevant regulation.

STATUTORY DISCLOSURES

None of the Directors of Company are disqualified under the provisions of section 164 of Companies Act 2013 & rules made there under. The Directors have made the requisite disclosures, as required under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT

There are no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statements relate and the date of this Report.

DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISED DIRECTLY BY THE EMPLOYEES

During the year under review, there is NIL disclosure as required under provisions of section 67 of Companies Act 2013.

OTHER DISCLOSURES

No disclosure or reporting is made in respect of the following items as there were no transactions during the year under review:

- No material fraud has been reported by the Auditors to the Audit Committee or the Board.

- Neither there is revision in the Financial Statements nor there is any change in nature of business.

EQUAL OPPORTUNITY EMPLOYER

Company has always provided a congenial atmosphere for work to all employees that is free from discrimination and harassment including sexual harassment. It has provided equal opportunities to all employees, workers without regard to their caste, creed, colour, marital status and sex.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report, as required by Listing Regulations, forms part of the Annual Report.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their deep sense of gratitude to the Customers, stakeholders, Central and State Governments for their continued guidance and support. Your Directors wish to place on record their appreciation for the support, dedication and hard work put in by every member of WINSOME Family.

For and on behalf of the Board

Place: Chandigarh Sd/-

Date: 25th May 2018 (ASHISH BAGRODIA)

CHAIRMAN & MANAGING DIRECTOR

DIN-00047021

---

Mar 31, 2016

Dear Shareholders,

The Directors have pleasure in presenting the 35th Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2016.

Financial Highlights	Year ended 31.3.2016 (Rs. in lacs)	Year ended 31.3.2015 (Rs. in lacs)
Sales	65823.33	64947.43
Profit before Interest & Depreciation	10381.70	10017.14
Less : Interest	6145.40	6139.95
Profit / (Loss) before Depreciation	4236.30	3877.19
Less : Depreciation	1978.97	1772.27
Profit / (Loss) before Tax	2257.33	2104.92
Less : Provision for Taxation - Current Tax (MAT)	487.26	445.41
- MAT Credit	(332.97)	(445.41)
- Deferred Tax Liability/(Assets)	30.63	812.44
- MAT Credit earlier year/Charged Earlier Year	23.79	(140.29)
- Tax for earlier years	---	140.57
Net Profit / (Loss) after Tax	2048.62	1292.20
Add : Surplus brought from previous year	8298.38	4957.56
Less : Adjustments during the year	68.86	---
	8229.52	6249.76
Appropriations :
Proposed Dividend	NIL	NIL
Corporate Dividend Tax	NIL	NIL
Surplus Carried to Balance Sheet	8229.52	6249.76
	8229.52	6249.76

OPERATIONAL PERFORMANCE

During the year under review, your Company has achieved a sales turnover of Rs. 65823.33 lacs as against sales turnover of Rs. 64947.43 lacs during the previous year showing an increase of 1.35% and a net profit (after tax) of Rs. 2048.62 lacs for the year as against net profit (after tax) of Rs. 1292.20 lacs during the previous year. The export of the company for the current financial year was Rs. 25229.62 lacs as against Rs. 22203.86 lacs for the previous financial year. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world, though the year under review has been quite volatile for the company. Internationally the export of cotton yarn was at downward trend but your Company sustained to improve its export performance. The major portion of export was comprising of melange, dyed yarn & value added specialty yarn in the Asian, European and South American countries.

During the year, the major portion of cotton crop in Punjab and Haryana (northern region) got damaged due to attack of white flies which ultimately resulted in to low quality and poor productivity. From October 2015 onwards, there is a decline in arrival of domestic cotton output. In the coming months, it will also effect the yarn prices and cost of production.

You would appreciate to note that domestic sale of fabric is continuously improving. Your company continues to focus on manufacturing of value added yarns and knitted fabrics to reduce the risks of volatility of pricing of its products among other things.

ACCOLADES AND RECOGNITIONS

We are delighted to inform you that your Company has been presented with Silver Trophy by ‘TEXPROCIL’ for second Highest Exports of Cotton Yarn (Processed Yarns) in the Category II for F.Y. 2014-2015. Your Company is making persistent efforts to maintain its distinctive position among its customers and stakeholders by providing cost efficient new & innovative quality products.

EXPANSION PROJECT OF COMPANY

The Company’s upcoming Hydro Power Project of 3.5 M.W. at Dharamshala, Distt. Kangra, Manuni Khad (H.P.) is at an advance stage and ready for commissioning shortly subject to the completion of necessary Statutory formalities/permissions, for the time being in force. The Company is also exploring more Hydro Power opportunities in the State of Himachal Pradesh for which discussions are underway and necessary steps are being taken.

SUBSIDIARY COMPANY

During the year ended 31st March, 2016, neither the Company has any subsidiary nor any material listed/unlisted subsidiary company.

PUBLIC DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year under review pursuant to the provisions of Companies Act, 2013 and rules made there under.

DIVIDEND & RESERVES

Keeping in view to conserve the resources, your Directors do not recommend any dividend for the year under review. During the year under review, no amount was transferred to reserves.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP’s)

Pursuant to provisions of section 152 of Companies Act 2013 read with Companies (Appointment and Qualification of Directors) Rules, Shri Ashish Bagrodia, Director, retire by rotation and being eligible, offer himself for re-appointment. During the year under review, shareholders of the Company in their 34th Annual General Meeting held on 28th September 2015 have reappointed Shri Ashish Bagrodia as Managing Director of Company for a period of five years w.e.f. 01.02.2016 on such terms & conditions as stipulated in respective resolution. Further Smt. Neena Singh was also appointed in the said AGM as an Independent Director for a period of five consecutive years w.e.f. 28th September 2015 in terms of provisions of section 149, 152 read with Schedule IV and all other applicable provisions of Companies Act 2013 & Companies (Appointment and Qualification of Directors) Rules 2014.

As on 31st March 2016, following are Key Managerial Personnel of Company:

- Shri Ashish Bagrodia - Chairman & Managing Director

- Shri Anil Sharma - Chief Executive Officer

- Shri Sanjay Kedia - Chief Financial Officer

- Shri Sourabh Gupta - Company Secretary

STATUTORY AUDITORS

At the 33rd Annual General Meeting of Company held on 29th September 2014, M/s Lodha & Co., Chartered Accountants, were re-appointed as Statutory Auditors of the Company, for a period of three years i.e. from the conclusion of 33rd Annual General Meeting of Company till the conclusion of 36th Annual General Meeting of Company, subject to the ratification of their appointment by the members in every subsequent Annual General Meeting in accordance with the provisions of section 139 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.

In pursuance to the same, Company has obtained a Letter of Eligibility in terms of provisions of section 139 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014 from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made in ensuing AGM would be in accordance of provisions of section 141 of Companies Act 2013 and rules made there under and that they are not disqualified for such appointment under Companies Act, 2013, the Chartered Accountants Act 1949 and rules & regulations made there under. Although in terms of provisions of Section 139 of Companies Act, 2013, the appointment of Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Lodha & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. The said appointment has also been approved by Audit Committee.

AUDITOR’S REPORT

Observations made in the Auditor’s Report are self explanatory. The comments of the Board of Directors on Auditor’s observations are attached herewith.

COST AUDIT & COST AUDITOR

Pursuant to provisions of section 148 of Companies Act 2013 & Rules made there under, your Company carries out an audit of cost records every year. The Company has obtained written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be in accordance of provisions of section 148 of Companies Act 2013 and that they are not disqualified for such appointment within the meaning of section 141 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.

Therefore, after considering the recommendations of Audit Committee, Board of Directors of the Company have appointed M/s Aggarwal Vimal & Associates, Cost Accountants, as Cost Auditor of Company for the Financial Year 2016 - 2017 to conduct Cost Audit of Cost Accounts of the Company on a remuneration of Rs. 70,000/- (Rupees Seventy Thousand only).

Although pursuant to provisions of section 148 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014, the remuneration of Cost Auditor is subject to the ratification of members of the Company. The Cost Audit Report for Financial Year 2014-15 was due to be filed with the Ministry of Corporate Affairs on 30.09.2015 was filed on 26.09.2015.

SECRETARIAL AUDIT

Pursuant to the recommendations of Audit Committee, Shri Ramesh Bhatia, Practicing Company Secretary has been appointed by the Board to conduct the Secretarial Audit under provisions of section 204 of Companies Act 2013. The Secretarial Audit Report is annexed with the Director’s Report as ANNEXURE -1. There is no qualification in Secretarial Audit Report.

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

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out manufacturing operations. As required by the provisions of section 134 of Companies Act, 2013 read with Companies (Accounts) Rules 2014, the relevant information’s regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the ANNEXURE - 2 forming part of this report.

STATUTORY DISCLOSURES

None of the Directors of Company are disqualified under the provisions of section 164 of Companies Act 2013 & rules made there under. The Directors have made the requisite disclosures, as required under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (“hereinafter referred to as Listing Regulations”).

CORPORATE GOVERNANCE

The Company is committed to maintain the good standards of Corporate Governance. The Company has complied with the Corporate Governance requirements as stipulated under Listing Regulations. Pursuant to said Regulations, Report on Corporate Governance together with the Certificate issued by Practicing Company Secretary regarding compliance of Corporate Governance is annexed to this report.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(3) (c) of Companies Act, 2013, it is hereby confirmed that:

(a) in the preparation of annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed and that there are no material departures;

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

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis.

(e) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequately and operating effectively.

EXTRACT OF ANNUAL RETURN

The details forming part of extract of the Annual Return is given in Form MGT-9 in ANNEXURE - 3.

NUMBER OF BOARD MEETINGS

During the Financial Year 2015-16, Four Board Meetings were held. These meetings were held on 26th May 2015, 13th August 2015, 29th October 2015 and 09th February 2016. The other relevant details of Board meetings and the attendance of the Directors etc. are given under Corporate Governance Report annexed with Director’s Report.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have submitted the Declaration of Independence, as required pursuant to provisions of section 149 of Companies Act 2013 and under Listing Regulations, stating that they meet the criteria of independence as provided in said section.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

Details of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements provided in this Annual Report.

RELATED PARTY TRANSACTIONS

All related party transactions are entered on arm’s length basis & in ordinary course of business and are in compliance with the applicable provisions of Companies Act and Listing Regulations. There are no materially significant related party transactions made by the Company with its promoters, Directors or Key Managerial Personnel, their relatives etc. that may have potential conflict with the interest of the Company at large. Thus disclosure in Form AOC-2 as per provisions of Companies Act 2013 is not required. However the details of the transactions with Related Party are provided in the Company’s Financial Statements in accordance with the Accounting Standards read with Accounting Policies.

All Related Party Transactions are presented to the Audit Committee and the Board for approval by specifying the nature, value, terms and conditions of the transactions etc.. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions for which omnibus approval has obtained are presented before the Audit Committee as well as to Board on quarterly basis. The Related Party Transactions Policy of Company is available on following weblink of Company’s website:

http://www.winsometextile.com/files/pdf/68-63-file.pdf

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT

There are no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statements relate and the date of this Report.

RISK MANAGEMENT POLICY

Risk management is a continuous process across the organization designed to identify, assess and frame a response to threats that affect the achievement of its objectives. The Company firmly believes that to ensure effective risk management, there ought to be risk management plans to handle the risks based on the priorities and complexities of business. This implies, if proper risk management is implemented as a best practice then massive capital losses can be prevented. The success of the Risk Management Framework depends on the efforts taken to mitigate/ reduce either the probability or consequence of the risk/ threat. Company’s Risk Management Policy includes three key elements: Risk Assessment, Risk Management &Risk Mitigation, Risk Monitoring. Risks are analyzed, considering likelihood and impact, as a basis for determining how they should be managed effectively. Adhering the same, Company has also constituted Risk Management Committee and adopted an effective Risk Management Policy in its place to assess, mitigate and to monitor the different risks exposed to the industry in which it operates. The said policy is uploaded on the Company’s website i.e. www.winsometextile.com under corporate policies.

POLICY ON DIRECTOR’S APPOINTMENT & REMUNERATION AND OTHER PRESCRIBED MATTERS

The Nomination and Remuneration Committee constituted by the Company functions in accordance with the terms of reference as set out under provisions of Listing Regulations read with provisions of Section 178 of the Companies Act, 2013 & rules made there under. The Company’s Nomination & Remuneration Policy as stipulated under the provisions of section 178 of Companies Act 2013 is given in ANNEXURE - 4 and also available on Company’s website i.e. www.winsometextile.com under corporate policies.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

It is the Company’s intent to establish itself and remain as a responsible corporate entity conscious of its social responsibilities towards its work force, community and environment. The Policy of Winsome Textile Industries Limited on Corporate Social Responsibility (CSR) is broadly framed taking into account the following major objectives:-

- To identify and formulate projects and areas in response to the needs of society and to implement them with full involvement and commitment in a time bound manner.

- To adopt an approach that aims at achieving a greater balance between social and economic development.

- To implement CSR Activities/ CSR programmes primarily in the economic vicinity Company’s operations with a view to ensuring the long term sustainability of such interventions.

- Contribution to the society at large by way of socio-economic activities and social awareness ensuring that benefits reach the targeted beneficiaries.

- To comply with the requirements of Companies Act 2013 and all other applicable Acts, Rules, Regulations framed by the Government time to time.

The CSR activities may be focused not just around units/plants and offices of the company, but also in other geographies based on the needs of the communities. In pursuance to CSR Policy, the Company has decided to conduct or undertake all or any of prescribed activities/activity/sub activity, as mentioned in Schedule VII of the Companies Act 2013 and rules & regulations made there under (as amended time to time), either by Company itself or by Winsome Foundation Trust or by both.

The CSR Committee of Company functions as per section 135 of Companies Act 2013 and rules made there under i.e. to monitor the CSR activities/CSR projects, its mechanism & other prescribed activities/matters. During the F.Y. 2015-16, Four CSR Committee meetings were held on 26th May 2015, 13th August 2015, 29th October 2015 and 09th February 2016. The composition, names of members, chairperson and attendance of members during the year are as below:

Sr. No.	Name of members	Category	No. of meetings attended during the year 2015-2016
1	Shri Ashish Bagrodia, Chairman	Executive Director	4
2	Shri Chandra Mohan, Member	Independent/Non-Executive	4
3	Shri Satish Girotra, Member	Independent/Non-Executive	3

The relevant details as required under Companies (Corporate Social Responsibility Policy) Rules 2014 are given in ANNEXURE - 5. The CSR policy is available on the Company’s website at following weblink:

http://www.winsometextile.com/files/pdf/68-59-file.pdf

INTERNAL FINANCIAL CONTROL SYSTEM AND INTERNAL AUDIT

The Company has an elaborate internal control system which monitors compliance to internal processes. It ensures that all transactions are authorized, recorded and reported correctly. The Company has dedicated Internal Audit Department. The Internal Audit department continuously monitors the efficiency of the internal controls/compliance with the objective of providing to Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organization’s risk management, control and governance processes. This formalized system of internal control facilitates effective compliance of Section 138 of Companies Act, 2013 and other applicable statutes. The Internal Audit Department assesses opportunities for improvement in the business processes, deigned to add value to the organization and follows up on the implementation of correction actions & improvement in business process, where ever required.

During the year under review, the Company continued to implement their suggestions and recommendations to improve the internal financial control environment. The Audit Committee actively reviews the adequacy and effectiveness of internal control system and suggests to further strengthening the same, wherever required. The Management also periodically reviews financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, there is no material order(s) passed by the regulators or courts or tribunal impacting the going concern status and company’s operation in future.

DISCLOSURE REGARDING COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES 2014

The paid up equity share capital of the Company as at 31st March 2016 was comprised of 1,98,20,000 equity shares of Rs. 10/- each i.e. Rs. 19,82,00,000/-. As required under Companies (Share Capital and Debenture) Rules 2014, during the year under review, the Company has not issued equity shares with differential voting rights, sweat equity shares, preference shares, employee stock options and also not made any provision for purchase of its own shares by employees or by trustees.

DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISED DIRECTLY BY THE EMPLOYEES

During the year under review, there is NIL disclosure as required under provisions of section 67 of Companies Act 2013.

AUDIT COMMITTEE

Audit Committee constituted by the Company functions in accordance with the terms of reference as set out under the provisions of Listing Regulations read with provisions of Section 177 of Companies Act, 2013 & rules made there under and additional responsibilities assigned to it by Board of Directors of the Company. The Committee reviews the internal audit reports and findings of internal auditors along with the comments of management. The functions of the Audit Committee among others, include approving and implementing the audit procedures, effective supervision of financial reporting system, Whistle Blower Mechanism, internal control and procedures, recommending appointments of Statutory Auditors, Cost & Secretarial Auditors to Board and also ensuring compliance’s with regulatory guidelines. The Board has constituted the Audit Committee comprises of following:

S. No.	Name of members	Category
1	Shri Chandra Mohan, Chairman*	Independent / Non-Executive
2	Shri Satish Girotra, Member*	Independent / Non-Executive
3	Shri Amrit Lal Batra, Member	Independent / Non-Executive

* Pursuant to reconstitution of Audit Committee w.e.f. 01.11.2015, Sh. Chandra Mohan was appointed as Chairman & Sh. Satish Girotra was appointed as Member of Committee.

The other relevant details of Audit Committee are given under Corporate Governance Report annexed with Director’s Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted Whistle Blower Policy and has established necessary mechanism for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company’s Code of Conduct. This policy is reviewed quarterly by the Audit Committee to check the effectiveness of the policy. No personnel have been denied access to the Audit Committee. No unfair treatment will be meted out to a Whistle Blower by virtue of his/her having reported a Protected Disclosure or Complaint under this Policy. The Company, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Whistle Blower. The vigil mechanism/Whistle Blower Policy of the Company is uploaded on the Company’s website i.e. www.winsometextile.com under corporate policies.

BOARD EVALUATION

During the year under review, the Board adopted a formal mechanism for evaluating its performance and as well as that of its committees, individual Directors, including the Chairman of the Board in compliance of Companies Act 2013 and Listing Regulations. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board, its committee & members, their experience & competencies, performance of specific duties & obligations, governance and also in accordance with Performance Evaluation Policy of Company. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) was evaluated on the basis of their own performance, expertise, intelligence, their qualitative & quantitative contribution towards operational achievements, organizational performance etc. The performance of Non-Executive Independent Directors were evaluated on the basis of their constructive participation’s in Board/Committee/General meetings, their informed & balanced decision-making, ability to monitor financial controls, systems & certain allied parameters. The performance evaluation of various Board Committees constituted under Companies Act & Listing Regulations was made on the basis of their respective terms of reference, discharge of functions, governance etc.

As stipulated by Code of Independent Directors under Companies Act 2013 and Listing Regulations, a Separate Meeting of independent Directors was held on 09th February, 2016 to review the performance of Non-Independent directors including the Chairman and the Board as a whole. The Independent Directors also reviewed the quality, content and timeliness of flow of information between Management and the Board. All Independent Directors were present in the said meeting. The Performance Evaluation Policy of Board of Directors is uploaded on the Company’s website i.e. www.winsometextile.com under corporate policies.

PARTICULARS OF EMPLOYEES

The information pursuant to Section 197 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, of the employees is given in ANNEXURE - 6. Further pursuant to Rule 5 (2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant disclosure is given in ANNEXURE - 7.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report, as required by Listing Regulations, forms part of the Annual Report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank Customers, members, suppliers, bankers, Central and State Governments for their consistent support and co-operation extended to the Company. We also acknowledge the significant contribution made by the employees for their dedication and hard work and trust reposed on us. We look forward to have the same support in future.

By Order of the Board

Place: Chandigarh

Dated: 27.05.2016

Sd/

(ASHISH BAGRODIA)

CHAIRMAN & MANAGING DIRECTOR

DIN-00047021

---

Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the 34th Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2015.

Financial Highlights Year ended 31.3.2015 Year ended 31.3.2014

(Rs.in lacs) (Rs. in lacs)

Sales 64947.43 49882.79

Profit before Interest & Depreciation 10017.14 9488.14

Less : Interest 6139.95 4388.19

Profit/(Loss) before Depreciation 3877.19 5099.95

Less : Depreciation 1772.27 1624.10

Profit/ (Loss) before Tax 2104.92 3475.85

Less : Provision for Taxation - Current Tax(MAT) 445.41 606.80

- MAT Credit (445.41) (606.80)

- Deferred Tax Liability/(Assets) 812.44 1647.28

- MAT Credit earlier year (140.29) -

-Tax for earlier years 140.57 -

Net Profit/ (Loss) after Tax 1292.20 1828.57

Add : Surplus brought from previous year 4957.56 3128.99

6249.76 4957.56

Appropriations :

Proposed Dividend NIL NIL

Corporate Dividend Tax NIL NIL

Surplus Carried to Balance Sheet 6249.76 4957.56

6249.76 4957.56

OPERATIONAL & PERFORMANCE REVIEW

During the year under review, your Company has achieved a sales turnover of Rs. 64947.43 lacs as against sales turnover of Rs. 49882.79 lacs during the previous year showing an increase of 30.20% and a net profit (after tax) of Rs. 1292.20 lacs for the year as against net profit (after tax) of Rs. 1828.57 lacs during the previous year. The export of the company for the current financial year was Rs. 22203.86 lacs as against Rs. 20436.66 lacs for the previous financial year.

The year under review has been quite volatile for the company. In April 2014, China announced its new cotton policy which led to decrease of international prices of cotton but most of the Indian mills including us had already covered our cotton requirements. This fall in international cotton prices led to fall of International Cotton yarn prices and consequently also prices in domestic markets. The international cotton prices which had been declining since April 2014 after the announcement by China to shift to the new cotton policy, has been range-bound since November 2014 at USD 1.5/Kg. Nevertheless, the prices remain significantly lower over the previous corresponding period. Increase in global stock levels outside China from the current estimates will lead to further pressure on the international cotton prices. In addition, Cotton Corporation of India (CCI) procured significant proportion of the India's cotton production in 2014-15. The price at which CCI sells the cotton can also be a key determinant of the international prices but certainly their sale policy will determine the domestic cotton prices. Your company continues to focus on manufacturing of value added yarns and knitted fabrics to reduce the risks of volatility of pricing of commodity greige products.

AWARDS AND RECOGNITIONS

We are delighted to inform you that your Company has been presented with Silver Trophy by 'TEXPROCIL' for second Highest Exports of Cotton Yarn (Processed Yarns) in the Category II (Export Performance between Rs. 50 Cr. to 500 Cr.) for F.Y. 2013-2014. Your Company is making persistent efforts to maintain a distinctive position among its customers and stakeholders by providing different quality products.

EXPANSION PROJECT OF COMPANY

The Company's upcoming Hydro Power Project of 3.5 M.W. at Dharamshala, Distt. Kangra, Manuni Khad (H.P.) is at an advance stage and ready for commissioning in the current financial year subject to the completion of necessary Statutory formalities/permissions, for the time being in force. The Company's new spinning unit located at Village Kaundi, Distt. Solan, H.P. is functioning with its full capacity and has further strengthened the Company's delivery chain.

TOTAL QUALITY MANAGEMENT

During the year under review, the Company has undertaken Total Quality Management (TQM) projects based on Dr. Juran's TQM philosophy for improvements in its process and procedures like improvement in winding efficiency in Dye house, reduction of water for dyeing and optimization of process performance in yarns etc. which lead to saving of Rs. 484 Lacs.

SUBSIDIARY COMPANY

During the year ended 31st March, 2015, the Company did not have any subsidiary company.

IS/ISO CERTIFICATIONS

Your Directors are pleased to inform you that during the year under review, your Company continues to be holder of certification of IS/ISO 18001:2007 for Occupational Health & Safety Management Systems (OHSMS), IS/ISO 9001:2008 for Quality Management Systems Certification and IS/ISO 14001:2004 Environmental Management System (EMS) Certification, issued by Bureau of Indian Standards. The company also holds various other certifications such as Organic Content Standard (OCS), Certification and Global Organic Textile Standards (GOTS) certification & SUPIMA licensee (special type of PUMA COTTON) etc.

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under review pursuant to the provisions of Companies Act, 2013 and rules made there under.

DIVIDEND

Keeping in view to conserve the resources, your Directors do not recommend any dividend for the year under review.

KEY MANAGERIAL PERSONNEL (KMPs) AND INDEPENDENT DIRECTORS

The Board of Directors of the Company in their meeting held on 28th May 2014 have re-designated and appointed Shri Anil Sharma as President & Chief Executive Officer (CEO) of the Company and Shri Sanjay Kedia as Chief Financial Officer (CFO) of the Company w.e.f. 01st April 2014 under the provisions of section 203 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Apart from above, Shri Ashish Bagroida, Chairman & Managing Director and Shri Sourabh Gupta, Company Secretary are also Key Managerial Personnel of Company.

Further shareholders of the Company in their 33rd Annual General Meeting held on 29th September 2014 have appointed Shri Satish Girotra (DIN-01112511), Shri Chandra Mohan (DIN-00017621) and Shri Amrit Lal Bara (DIN- 00399728) as Independent Directors of the Company for five consecutive years w.e.f. 29th September 2014 in terms of provisions of section 149, 152, Schedule IV and other applicable provisions, if any, of Companies Act 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014.

DIRECTORS

During the year under review, Shri Satish Bagrodia, Chairman and Whole Time Director has resigned from Board of Directors of the Company w.e.f. 20th September 2014. Your Directors places on record their deep appreciation and wish to thank him for his immense and fruitful contribution during his tenure as Director on the Board. During his tenure, Company has been able to achieve a respectable position in the Textile Industries.

During the year, shareholders of Company in their Extra Ordinary General Meeting held on 27th March 2015 have approved for revision in basic salary structure of Shri Ashish Bagrodia, Managing Director, on such terms & conditions as set out in the notice of said meeting.

The Board of Directors of the Company, pursuant to provisions of section 203 of Companies Act 2013 & rules made thereunder and under Article 115A of Article of Association of Company, have appointed Shri Ashish Bagrodia,

Managing Director, as Chairman and Managing Director of Company w.e.f. 27th March 2015.

Pursuant to the provisions of section 152 of Companies Act 2013 read with Companies (Appointment and Qualification of Directors) Rules, Shri Ashish Bagrodia, Director, retire by rotation and being eligible, offer Himself for re-appointment.

Smt. Neena Singh was appointed as Additional Director w.e.f. 27th March 2015 in the capacity of an Independent

Non-Executive Director. The Company has received requisite notice from a member proposing the candidature of Smt. Neena Singh for appointment as an Independent Director.

STATUTORY AUDITORS

At the 33rd Annual General Meeting of Company held on 29th September 2014, M/s Lodha & Co., Chartered Accountants, were re-appointed as Statutory Auditors of the Company, for a period of three years i.e. from the conclusion of 33rd Annual General Meeting of the Company till the conclusion of 36th Annual General Meeting of the Company, subject to the ratification of their appointment by the members in every subsequent Annual General Meeting in accordance with the provisions of section 139 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.

The Company has obtained a Letter of Eligibility in terms of provisions of section 139 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014 from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be in accordance of provisions of section 141 of the Companies Act 2013 and Rules made thereunder and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013, the Chartered Accountants Act 1949 and rules & regulations made thereunder. In terms of provisions of Section 139 of Companies Act, 2013, the appointment of Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Lodha & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders.

COST AUDIT

Pursuant to provisions of section 148 of Companies Act 2013 & Rules made thereunder, your Company carries out an audit of cost records every year. The Company has obtained written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be in accordance of provisions of section 148 of Companies Act 2013 and that they are not disqualified for such appointment within the meaning of section 141 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.

Therefore, after considering the recommendations of Audit Committee, Board of Directors of the Company have appointed M/s Aggarwal Vimal & Associates, Cost Accountants, as Cost Auditor of Company for the Financial Year 2015 - 2016 to conduct Cost Audit of Cost Accounts of the Company on a total remuneration of Rs. 65,000/- (Rupees Sixty Five Thousand only) including out of pocket expenses. Although according to provisions of section 148 of Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014, the remuneration of Cost Auditor is subject to the ratification of members of the Company. The Cost Audit Report for the Financial Year 2013-14 was due to be filed with the Ministry of Corporate Affairs on 30.09.2014 was filed on 23.09.2014.

AUDITOR'S REPORT

Observations made in the Auditor's Report are self explanatory and therefore do not call any further explanation.

SECRETARIAL AUDIT

Shri Ramesh Bhatia, Practicing Company Secretary has been appointed by the Board to conduct Secretarial Audit under provisions of section 204 of Companies Act 2013. The Secretarial Audit report is annexed with the Director's Report as Annexure- 1. There is no qualification in Secretarial Audit Report.

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

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out manufacturing operations. As required by the provisions of section 134 of the Companies Act, 2013, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the Annexure- 2 forming part of this report.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified under the provisions of section 164 of the Companies Act 2013. The Directors have made the requisite disclosures, as required under the Companies Act 2013 and Clause 49 of the Listing Agreement.

CORPORATE GOVERNANCE

The Company is committed to maintain the good standards of Corporate Governance. The Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the Listing Agreement. Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance together with the Certificate issued by Practicing Company Secretary regarding compliance of Corporate Governance is annexed to this report.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(3)(c ) of the Companies Act, 2013, it is hereby confirmed that:

(a) in the preparation of annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and that there are no material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit or loss of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequately and operating effectively.

EXTRACT OF ANNUAL RETURN

The details forming part of extract of the Annual Return is given in Form MGT-9 in Annexure - 3.

NUMBER OF BOARD MEETINGS

During the financial year 2014-15, five board meetings were held. The meetings were held on 28th May 2014, 13th August 2014, 13th November 2014, 02nd February 2015 and 27th March 2015. As stipulated by Code of Independent Directors under Companies Act 2013 and under Listing Agreement, a separate meeting of independent directors was held on 27th March 2015. The other relevant details of Board meetings and the attendance of the Directors etc. is given under Corporate Governance Report annexed with Director's Report.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have submitted the Declaration of Independence, as required pursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteria of independence as provided in sub- section (6).

PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS

Details of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements provided in this Annual Report.

RELATED PARTY TRANSCATIONS

All related party transactions are entered on arm's length basis & in ordinary course of business and are in compliance with the applicable provisions of the Act and Listing Agreement. There are no materially significant related party transactions made by the Company with the Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. Thus disclosure in Form AOC-2 is not required. All related party transactions are placed before the Audit Committee and to Board for approval. The policy on Related Party Transactions envisages the procedure governing Related Party Transactions required to be followed by the Company to ensure the compliances with Law and Regulations. The related party transaction policy is uploaded on the Company's website under http://winsometextile.com/pdf/wtil/cp/related_party_trans_policy.pdf During the year under review, Board of Directors of Company in their meeting held on 27th March 2015 have appointed Sh. Satish Bagrodia as advisor of Company in order to get benefit of his having more than four decades of core experience in the areas of projects developments, corporate planning, leadership and in strategic management relating to textile industry. The said appointment is made at arm's length basis under the provisions of section 188(1), 188(1)(f) of Companies Act 2013 and rules made thereunder and same has also been approved by shareholders of the Company in their Extra Ordinary General Meeting held on 06th May 2015.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Being an equal employment opportunity Company and to ensure that every employee of the Company is treated with dignity & respect and as mandated under "The Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013, the Company has in place a formal policy for Prevention of Sexual Harassment of Employees at Workplace. The Management of the Company has also constituted Internal Complaint Committees at its workplaces to consider and redress the complaints of Sexual Harassment. During the F.Y. 2014- 15, the Company has not received any complaint on sexual harassment. Two workshops/awareness programs were carried out against sexual harassment. The said policy is uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT

There are no material changes and commitments, 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 other than those disclosed in the financial statements.

RISK MANAGEMENT POLICY

Risk management is a continuous process across the organization designed to identify, assess and frame a response to threats that affect the achievement of its objectives. It enables management to prepare for risks before they devolve to improve the operational effectiveness. Determination of the risk appetite allows management to deploy resources according to the need. The Company firmly believes that to ensure effective risk management, there ought to be risk management plans to handle the risks based on the priorities and challenges of the business. The factors involved in identified risks must be considered and the accuracy of assessment is very important. This implies, if proper risk management is implemented as a best practice then massive capital losses can be prevented. The success of the Risk Management Framework depends on the efforts taken to mitigate/ reduce either the probability or consequence of the risk/ threat. Therefore considering the same, Company's Risk Management Policy includes three key elements:

I. Risk Assessment

II. Risk Management and Risk Mitigation

III. Risk Monitoring

Risks are analyzed, considering likelihood and impact, as a basis for determining how they should be managed effectively. Adhering the same, Company has constituted Risk Management Committee and adopted an effective Risk Management Policy in its place to assess, mitigate and to monitor the different risks exposed to the industry in which it operates. The said policy is uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

POLICY ON DIRECTORS APPOINTMENT & REMUNERATION AND OTHER PRESCRIBED MATTERS

The Nomination and Remuneration Committee constituted by the Company functions in accordance with the terms of reference as set out under provisions of Clause 49 of Listing Agreement read with provisions of Section 178 of the Companies Act, 2013 & rules made thereunder. Apart from other Corporate Polices which are mandatory under Companies Act as well as under Listing Agreement, the said Committee has also formulated and recommended to the Board a Nomination & Remuneration Policy relating to director's appointment and remuneration including criteria for determining qualifications, positive attributes independence of a director and all other matters as stipulated under the provisions of section 178 of Companies Act 2013.

The policy also relates to remuneration of Director's, KMP's and other employees of the Company. The said policy is given in Annexure-4 and also uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

It is the Company's intent to establish itself and remain as a responsible corporate entity conscious of its social responsibilities towards its work force, community and environment. The Policy of Winsome Textile Industries Limited on Corporate Social Responsibility (CSR) is broadly framed taking into account the following major objectives:-

- To identify and formulate projects and areas in response to the needs of society and to implement them with full involvement and commitment in a time bound manner.

- To adopt an approach that aims at achieving a greater balance between social and economic development.

- To implement CSR Activities/ CSR programmes primarily in the economic vicinity Company's operations with a view to ensuring the long term sustainability of such interventions.

- Contribution to the society at large by way of socio-economic activities and social awareness ensuring that benefits reach the targeted beneficiaries.

- To comply with the requirements of Companies Act 2013 and all other applicable Acts, Rules, Regulations framed by the Government time to time. In pursuance to CSR Policy, the Company has decided to conduct or undertake all or any of prescribed activities/activity/sub-activity, as mentioned in Schedule VII of the Companies Act 2013 and rules & regulations made thereunder (as amended time to time), either by Company itself or by Winsome Foundation Trust or by both. To fulfill the CSR Activities/CSR Programmes, the Company will allocate a budget on annual basis which would be utilized only for CSR purpose as stipulated. Company will make regular contributions in the budget out of its net profits in each financial year so as to make a corpus. All the expenditures for CSR purpose will be made from this corpus only and Board will monitor and ensure that it does not include any expenditure on any item which is not in conformity or not in line with activities which fall within the purview of Schedule VII and rules & regulations prescribed under Companies Act 2013, as amended time to time.

Company has constituted a CSR Committee under section 135 of Companies Act 2013 and rules made thereunder to monitor the CSR activities/CSR projects, its mechanism & other prescribed activities/matters. During the financial year 2014-15, Four Corporate Social Responsibility Committee meetings were held on 28th May 2014, 13th August 2014, 13th November 2014 and 02nd February 2015. The composition, names of members, chairperson, particulars of the meetings and attendance of the members during the year are as below:

Sr. No. Name of members Category No. of meetings attended during the year 2014-2015

1 *Shri Satish Bagrodia, Chairman Executive Director 2

2 **Shri Ashish Bagrodia, Chairman Executive Director 4

3 Shri Chandra Mohan, Member Independent/Non-Executive 4

4 #Shri Satish Girotra, Member Independent/Non-Executive 1

* resigned from Directorship of the Company w.e.f. 20.09.2014. ** appointed as Chairman of the Committee w.e.f. 29.10.2014.

# Inducted as member of Committee w.e.f. 29.10.2014.

The relevant details as required under Companies (Corporate Social Responsibility Policy) Rules 2014 are given in Annexure- 5. Further the CSR policy is uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company maintains an adequate and effective Internal Control system commensurate with its size and complexity. The Company has dedicated Internal Audit Department. Internal control systems provide, among other things, a reasonable assurance that transactions are executed with Management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of your Company are adequately safeguarded against significant misuse or loss.

During the year under review, the Company continued to implement their suggestions and recommendations to improve the internal financial control environment. Their scope of work inter-alia includes review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board. The Audit Committee actively reviews the adequacy and effectiveness of internal control system and suggests to further strengthening the same, wherever required.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, there is no material order(s) passed by the regulators or courts or tribunal impacting the going concern status and company's operation in future.

DISCLOSURE REGARDING COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES 2014

The paid up equity share capital of the Company as at 31st March 2015 was comprised of 1,98,20,000 equity shares of Rs. 10/- each i.e. Rs. 19,82,00,000/-. As required under Companies (Share Capital and Debenture) Rules 2014, during the year under review, the Company has not issued equity shares with differential voting rights, sweat equity shares, preference shares, employee stock options and also not made any provision for purchase of its own shares by employees or by trustees.

DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISED DIRECTLY BY THE EMPLOYEES

During the year under review, there is NIL disclosure as required under provisions of section 67 of Companies Act 2013.

AUDIT COMMITTEE

Audit Committee constituted by the Company functions in accordance with the terms of reference as set out under the provisions of Clause 49 of Listing Agreement read with provisions of Section 177 of Companies Act, 2013 & rules made thereunder and additional responsibilities assigned to it by Board of Directors of the Company. The Committee reviews the internal audit reports and findings of internal auditors along with the comments of management. The functions of the Audit Committee among others, include approving and implementing the audit procedures, effective supervision of financial reporting system, Whistle Blower Mechanism, internal control and procedures, recommending appointment of Statutory Auditors, Cost Auditors to Board and also ensuring compliances with regulatory guidelines. The Board has constituted the Audit Committee comprises of following:

S. No. Name of members Category

1 Shri Satish Girotra, Chairman Independent/Non-Executive

2 Shri Chandra Mohan, Member Independent/Non-Executive

3 Shri Amrit Lal Batra, Member Independent/Non-Executive

The other relevant details of Audit Committee are given under Corporate Governance Report annexed with Director's Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted Whistle Blower Policy and has established the necessary mechanism for employees to report concerns about unethical behavior. This policy is reviewed quarterly by the Audit Committee to check the effectiveness of the policy. At the first instance, Employees can make Protected Disclosures or Complaints directly to the Sr. Vice President (HR) duly authorized & nominated by the Board in this behalf, within 30 days after becoming aware of the same. In case of non-receipt of any reply or response with in a period of 15 days from the date of communication to Sr. Vice President (HR), he/she may directly approach to the Chairman of Audit Committee for proper redressal or remedial action. Although in exceptional cases and in extraordinary circumstances, which according to the understanding of Whistle Blower lead him to resort such measure, then he/she may directly approach to Chairman of Audit Committee along with reasons recorded writing for adopting such measure and his/her concern or complaint so identified or so noticed. All Protected Disclosures or Complaints referred by Sr. Vice President (HR) to the Chairman of Audit Committee under this Policy will be thoroughly investigated by Chairman and members of the Audit Committee of the Company which also include to oversee the entire investigation process and allied matters. No personnel have been denied access to the Audit Committee. No unfair treatment will be meted out to a Whistle Blower by virtue of his/her having reported a Protected Disclosure or complaint under this Policy. The Company, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Whistle Blower.

The vigil mechanism/Whistle Blower Policy of the Company is uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

PERFORMANCE EVALUATION OF BOARD OF DIRECTORS

During the year under review, the Board adopted a formal mechanism for evaluating its performance and as well as that of its committees, individual Directors, including the Chairman of the Board in compliance with the Companies Act 2013 and Clause 49 of Listing Agreement. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board, its committee & members, their experience & competencies, performance of specific duties & obligations, governance and also in accordance with Performance Evaluation Policy of Company. Broadly the performance of Non- Independent/Executive/Whole Time Director(s) was evaluated on the basis of their own performance, expertise, intelligence, their qualitative & quantitative contribution towards operational achievements, organizational performance etc. The performance of Non-Executive Independent Directors were evaluated on the basis of their constructive participations in Board/Committee/General meetings, their informed & balanced decision-making, ability to monitor financial controls & systems & certain allied parameters. The performance evaluation of various Board Committees constituted under Companies Act & Listing Agreement was made on the basis of their respective terms of reference, discharge of functions, governance etc.

As stipulated by Code of Independent Directors under Companies Act 2013 and Listing Agreement, a separate meeting of independent directors was held on 27th March 2015 to review the performance of Non-Independent directors including the Chairman and the Boards as a whole. The Independent Directors also reviewed the quality, content and timeliness of flow of information between Management and the Board. The Performance Evaluation

Policy of Board of Directors is uploaded on the Company's website i.e. www.winsometextile.com under corporate policies.

DISCLOSURE OF INFORMATIONS AS REQUIRED UNDER SECTION 197 OF COMPANIES ACT 2013 AND RULE 5(1) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The necessary disclosures as required under section 197 of Companies Act 2013 and rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure- 6.

DISCLOSURE OF INFORMATIONS AS REQUIRED SECTION 197 OF COMPANIES ACT 2013 AND RULE 5(2) & 5(3) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The necessary disclosures regarding details of employee(s) remuneration as required under section 197 of Companies Act 2013 and rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 7.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation to all of the Company's employees for their enormous efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank shareholders, customers, dealers, suppliers, Financial Institutions, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

By order of the Board

Place : Chandigarh Sd/

Dated: 26.05.2015 (ASHISH BAGRODIA)

CHAIRMAN & MANAGING DIRECTOR

DIN-00047021

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Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 33rd Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2014.

Financial Highlights Year ended 31.3.2014 Year ended 31.3.2013 (Rs.in lacs) (Rs. in lacs)

Sales 49882.79 35179.98

Profit before Interest & Depreciation 9488.14 6651.80

Less : Interest 4388.19 3735.76

Profit/(Loss) before Depreciation 5099.95 2916.04

Less : Depreciation 1624.10 1173.35

Profit/ (Loss) before Tax 3475.85 1742.69

Less : Provision for Taxation - Current Tax(MAT) 606.80 378.59

- MAT Credit (606.80) (378.59)

- Deferred Tax Liability/(Assets) 1647.28 207.51

- Tax for earlier years – 23.74 Net Profit/ (Loss) after Tax 1828.57 1511.44 Add : Surplus brought from previous year 3128.99 1617.55 4957.56 3128.99 Appropriations :

Proposed Dividend NIL NIL

Corporate Dividend Tax NIL NIL

Surplus Carried to Balance Sheet 4957.56 3128.99

4957.56 3128.99

OPERATIONAL & PERFORMANCE REVIEW

During the year under review, your Company has achieved a sales turnover of Rs. 49882.79 lacs as against sales turnover of Rs. 35179.98 lacs during the previous year and a net profit (after tax) of Rs. 1828.57 lacs for the year as against net profit (after tax) of Rs. 1511.44 lacs during the previous year. Although there was a good monsoon, but the commodity prices stayed at high levels and manufacturing indices declined which ultimately lead to rise in inflation and slow GDP growth. The profits of the Company could have been huger had it not been the higher cotton prices during the second half of the current financial year. The export volume of your Company is far better than the last financial year. It is expected that the economic scenario will change in coming months with overall sustainable development and controlled inflation index which will help the Company further boost its topline and bottomline.

Your Company has been continuously striving to increase the percentage of value added products in its portfolio of manufactured products. Keeping this in mind, I am pleased to announce that during the year under review, the Company has commenced commercial production of its new Spinning unit, successfully completed the expansion of its yarn and fibre dyeing facility and its knit fabric unit. All these expansions have helped your Company to offer more melange yarns, dyed yarns and special value added blended yarns to its customers in the domestic and export markets.

We are delighted to inform you that once again your Company has been presented with the GOLD PLAQUE by ''The Cotton Export Promotion Council of India'' for the highest exports of processed yarns for the year 2012-13 in the category I (Rs. 10 Cr. to 50 Cr.).

EXPANSION PROJECTS OF COMPANY

In furtherance of progressive move towards expansion, the New Spinning Unit of Company (Unit II) located at Village Kaundi, Baddi, Distt. Solan, Himachal Pradesh with the capacity of 41088 spindles has successfully started its commercial production w.e.f. 15th November 2013. In the Circular Knitting unit of the Company at existing unit (Baddi, H.P.) out of total 25 machines 18 machines has commenced commercial production w.e.f. 1st November 2013. The expansion in the dyehouse to increase production capacities for dyeing yarn and fibre has also been completed. These positive initiatives will foster the demand for value added products of the Company in domestic market as well in overseas and will support the expansion of its existing line of products and launch of new products.

Hitherto, the construction of Company''s upcoming Hydro Power Project at Dharamshala, Distt. Kangra, Manuni Khad (H.P.) has been completed and the commissioning of said Hydro Power Project is expected within the financial year 2014-2015, subject to completion of requisite procedural formalities/permissions.

The year 2013-2014 was an important year of the Company in which the Company made significant additions in its capacity. Your Company is persistently striving to build a distinguished and sustainable position among its customers and stakeholders.

SUBSIDIARY COMPANY

The Wholly Owned Subsidiary of Company i.e. "Winsome Textile Industries FZE" has been closed down. However pursuant to provisions of section 212 of Companies Act 1956, the holding Company is required to attach the balance sheet & profit & loss account etc. of its subsidiary Company along with its balance sheet. Although, the Ministry of Corporate Affairs vide its general circular no. 2/2011 dated 08.02.2011 has provided general exemption from complying with the provisions of section 212 of Companies Act 1956. Accordingly, the Annual Accounts of Winsome Textile Industries FZE are not being attached with the balance sheet of the Company but the same will be made available to the shareholders for inspection at the head office of the Company during business hours on working days.

CONSOLIDATED ACCOUNTS

In accordance with the Accounting Standard AS -21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements of Winsome Textile Industries Limited and Winsome Textile Industries FZE in this Annual Report.

IS/ISO CERTIFICATIONS

Your Directors are pleased to inform you that during the year under review, your Company continues to be holder of certification of IS18001:2007 for Occupational Health & Safety Management Systems Certification (OHSMS), IS/ISO 9001:2008 Quality Management Systems Certification and IS/ISO 14001:2004 Environmental Management System (EMS) Certification, issued by Bureau of Indian Standards. The Company also holds various other certifications such as OCS Certification (Organic Content standard), GOTS Certification(Global Organic Textile Standards),GRS Certification (Global Recycle Standard) and SUPIMA licensee (special type of PUMA COTTON) etc..

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under review pursuant to the provisions of Section 58A of the Companies Act, 1956 and rules made thereunder.

DIVIDEND

Keeping in view to conserve the resources, your Directors do not recommend any dividend for the year under review.

APPOINTMENT OF KEY MANAGERIAL PERSONS (KMPs)

The Board of Directors of the Company in their meeting held on 28th May 2014 have re-designated and appointed Shri Anil Sharma as President and Chief Executive Officer (CEO) of the Company and Shri Sanjay Kedia as Chief Financial Officer (CFO) of the Company with effect from 01st April 2014 under the provisions of Section 203 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DIRECTORS

During the year under review, Shri Manish Bagrodia has resigned from Board of Directors of the Company with effect from 28.09.2013. Your Directors places on record their deep appreciation and wish to thank him for his immense and fruitful contribution during his tenure as Director on the Board.

Pursuant to the provisions of Section 152 of Companies Act 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014, Shri Ashish Bagrodia, Director, retire by rotation and being eligible, offer himself for re- appointment.

Although in terms of provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, an Independent Director can hold office for a term up to five (5) consecutive years on the Board of a Company and shall be eligible for re-appointment for another term upto five (5) consecutive years, only after passing of a special resolution by the Company and no Independent Director shall hold office for more than two consecutive terms of five years each. Further, the Independent Directors shall not be liable to retire by rotation. The Company has received declarations from all independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. Accordingly, Board of Directors of Company, after considering the recommendations of Nomination and Remuneration Committee, have proposed to appoint Shri Satish Girotra, Shri Chandra Mohan and Shri Amrit Lal Batra as Independent Directors of Company for five consecutive years with effect from 29th September 2014 upto 28th September 2019 and not liable to retire by rotation.

AUDITORS

M/s Lodha & Co, Chartered Accountants, Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has obtained a Letter of Eligibility in terms of provisions of Section 139 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014 from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be in accordance of provisions of Section 141 of the Companies Act 2013 and Rules made thereunder and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013, the Chartered Accountants Act 1949 and rules & regulations made thereunder.

Therefore, it is proposed to re-appoint M/s Lodha & Co, Chartered Accountants, as Statutory Auditors of the Company, for a period of three years i.e. from the conclusion of this 33rd Annual General Meeting of the Company till the conclusion of 36th Annual General Meeting of the Company, subject to the ratification of their appointment by the members in every subsequent Annual General Meeting in accordance with the provisions of Section 139 of the

Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.

COST AUDIT

Pursuant to provisions of Section 233B of Companies Act, 1956 read with provisions of Section 148 of and other applicable provisions, if any, of the Companies Act 2013 & Rules made thereunder, your Company carries out an audit of cost records every year. The Company has obtained written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be in accordance of provisions of Section 148 of Companies Act 2013 and that they are not disqualified for such appointment within the meaning of section 141 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014.

Therefore, after considering the recommendations of Audit Committee, Board of Directors of the Company have appointed M/s Aggarwal Vimal & Associates, Cost Accountants, as Cost Auditor of Company for the Financial Year 2014 - 2015 to conduct Cost Audit of Cost Accounts of the Company on a total remuneration of Rs. 65,000/- (Rupees Sixty Five thousand only) including out of pocket expenses. Although according to provisions of section 148 of Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014, the remuneration of Cost Auditor is subject to the ratification of members of the Company. The Cost Audit Report for the Financial Year 2012-13 was due to be filed with the Ministry of Corporate Affairs on 30.09.2013 was filed on 19.09.2013.

AUDITOR''S REPORT

Observations made in the Auditor''s Report are self explanatory and therefore do not call any further explanation.

PARTICULARS OF EMPLOYEES

None of the employees is covered under section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules,1975 as amended.

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

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out manufacturing operations. As required by the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the ''ANNEXURE A'' forming part of this report. STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified under the provisions of Section 274(1)(g) of the Companies Act 1956. The Directors have made the requisite disclosures, as required under the Companies Act, 1956 and 2013 and Clause 49 of the Listing Agreement.

CORPORATE GOVERNANCE

The Company is committed to maintain the good standards of Corporate Governance. The Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the Listing Agreement. Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance together with Auditor''s Certificate regarding compliance of Corporate Governance is annexed to this report.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 217 (2AA) of the Companies Act 1956, it is hereby confirmed that:

I. in the preparation of annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed and that there are no material departures;

II. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit or loss of the Company for the year ended on that date;

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

IV. the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep sense of gratitude to the Government of Himachal Pradesh and various other Central & State Government Departments, Financial Institutions, Bankers, customers & vendors and look forward for same support & confidence in our endeavors.

The Board of Directors expresses its deep gratitude and record its sincere appreciation of the dedicated efforts and commitment of all the employees. The Directors are also thankful to the esteemed shareholders for their continuous support and the confidence reposed in the Company.

By order of the Board

Place : Chandigarh SATISH BAGRODIA Dated : 28.05.2014 Chairman

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Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 32nd Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2013.

Financial Highlights Year ended 31.3.2013 Year ended 31.3.2012 (Rs.in lacs) (Rs. in lacs)

Sales 35179.98 31624.47

Profit before Interest & Depreciation 6651.80 3019.01

Less : Interest 3735.76 2949.59

Profit/(Loss) before Depreciation 2916.04 69.42

Less : Depreciation 1173.35 1150.64

Profit/ (Loss) before Tax 1742.69 (1081.22)

Less : Provision for Taxation - Current Tax(MAT) 378.59

- MAT Credit (378.59)

- Deferred Tax Liability/(Assets) 207.51 (159.41)

- Tax for earlier years 23.74 0.25

Net Profit/ (Loss) after Tax 1511.44 (922.06)

Add : Surplus brought from previous year 1617.55 2539.61

3128.99 1617.55

Appropriations:

Proposed Dividend NIL NIL

Corporate Dividend Tax NIL NIL

Surplus Carried to Balance Sheet 3128.99 1617.55

3128.99 1617.55

OPERATIONAL & PERFORMANCE REVIEW

During the year under review, your Company has achieved a sales turnover of Rs. 35179.98 lacs as against sales turnover of Rs. 31624.47 lacs during the previous year and a net profit (after tax) of Rs. 1511.44 lacs for the year as against net loss of Rs. 922.06 lacs during the previous year.

The profitability of your Company is impacted during the year because in the first half of the year i.e. April to September 2012, with piling up of inventory, the demand for yarn both domestically and internationally was comparatively lower coupled with high priced raw materials. It leads to decline in prices of cotton yarn. Subsequently, with slow down in demand and large finished goods inventory, the capacity utilization of the Company get affected, thereby further declining the operating profit margin.

There was no export demand in the initial months of the Cotton Season 2012-13 for Indian cotton, due to global over stocking by countries like China. Even then your Company has well performed in the export of value added yarn during the year under review. We are delighted to inform you that once again your Company has been presented with the GOLD TROPHY by ''The Cotton Export Promotion Council of India'' for the highest exports of processed yarns for the year 2011-12.

EXPANSION PROJECTS OF COMPANY

As a further progressive move towards expansion, the New Spinning Unit of the Company with the capacity of 41088 spindles has been implemented and has started its trial production w.e.f. 12th April 2013. The construction work of new Circular Knitting unit of the Company at existing unit Baddi, (H.P.) is going on rapidly and is expected to be completed in financial year 2013-2014. Although the expansion/modernization of Company''s existing dyeing house is almost completed.

Further the construction of Company''s upcoming Hydro Power Project at Dharamshala, Distt. Kangra, Manuni Khad (H.P.) is near to completion and the implementation of this Hydro Power Project is at an advanced stage. It is expected to be commissioned in the financial year 2013-2014.

By considering these several expansions & diversification''s, your Company shall have the benefit of economies of scale with efficient quality control & to have more value added products in its supply chain. That positive initiative will efficaciously contribute to operational efficiency, reduction in cost and thereby augment overall growth of the Company in terms of customers satisfaction & wealth maximization.

SUBSIDIARY COMPANY

Your Company has a Wholly Owned Subsidiary in Hamriyah Free Zone in United Arab Emirates, Dubai under the name & style of Winsome Textile Industries FZE. According to the provisions of section 212 of Companies Act 1956, the Holding Company is required to attach the balance sheet & profit & loss account etc. of its subsidiary Company along with its balance sheet.

Although, the Ministry of Corporate Affairs vide its general circular no. 2/2011 dated 08.02.2011 has provided general exemption from complying with the provisions of section 212 of Companies Act 1956. Accordingly, the Annual Accounts of Winsome Textile Industries FZE are not being attached with the balance sheet of the Company but the same will be made available to the shareholders for inspection at the head office of the Company and that of subsidiary company during business hours on working days.

CONSOLIDATED ACCOUNTS

In accordance with the Accounting Standard AS -21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements of Winsome Textile Industries Limited and Winsome Textile Industries FZE in this Annual Report.

IS/ISO CERTIFICATIONS & TOTAL QUALITY MANAGEMENT (TQM)

Your Directors are pleased to inform you that during the year under review, your Company has successfully achieved the new certification of IS 18001:2007 for Occupational, Health & Safety Management System (OHSMS). By this new certification of IS 18001:2007, your Company has became First Textile Industry in Himachal Pradesh to be granted the said certification. Your Company also continues to be holder of IS/ISO 9001:2008 Quality Management System Certificate and IS/ISO 14001:2004 Environmental Management System (EMS) Certificate, issued by Bureau of Indian Standards.

Furthermore, Total Quality management (TQM) projects are undertaken on Dr. Juran''s TQM philosophy. We are pleased to inform you that your Company is the winner of Trident Quality Pioneer Trophy for the North West Qualtech Awards 2010 held at Mohali & won Second Prize (Runner up) of Trident Quality Pioneer Trophy for the North West Qualtech Awards 2012 held at Chandigarh .

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under review pursuant to the provisions of Section 58A of the Companies Act, 1956 and rules made thereunder.

DIVIDEND

Keeping in view to conserve the resources, your Directors do not recommend any dividend for the year under review.

DIRECTORS

During the year under review, IDBI Bank vide its letter no. SS-CB.53/191/Nom. 8 dated 19th July 2012 has withdrawn the nomination of Sh. Rajeev Kumar from Board of Directors of the Company w.e.f. 19th July 2012. Your Directors place on record their deep appreciation and wish to thank him for his immense and fruitful contribution during his tenure as Director on the Board.

In accordance with the Company''s Articles of Association, Shri Satish Girotra and Shri Manish Bagrodia, Directors, retire by rotation and being eligible, offer themselves for re-appointment. Shri Amrit Lal Batra, who was appointed as Additional Director of the Company w.e.f. 12.01.2013 holds office upto the date of the ensuing Annual General Meeting of the Company in terms of Section 260 of the Companies Act 1956. The Company has received a notice under section 257 of the Companies Act 1956 from a member proposing his candidature for the office of the Director in the ensuing Annual General Meeting of the Company.

AUDITORS

M/s Lodha & Co, Chartered Accountants, Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has obtained the written confirmation from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956.

COST AUDIT

As per the requirements of Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, your Company carries out an audit of cost records every year. The Company has obtained the written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be within the prescribed limits under section 224 (1-B) read with sub-section (2) of Section 233B of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 read with provisions of Section 233B & Section 224 of Companies Act, 1956. Therefore, subject to the approval of Central Government, the Board has appointed M/s Aggarwal Vimal & Associates, Cost Accountants, as Cost Auditor of Company for the financial year 2013-14.

The Cost Audit Report for the financial year 2011-12 was due to be filed with the Ministry of Corporate Affairs on 28.02.2013 or with in 180 days from the close of Company''s financial year, whichever is later (as per General Circular no. 2/2013 dated 31.01.2013 issued by Ministry of Corporate Affairs) was filed on 10.01.2013.

AUDITOR''S REPORT

Observations made in the Auditor''s Report are self explanatory and therefore do not call any further explanation.

PARTICULARS OF EMPLOYEES

None of the employees is covered under section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules,1975 as amended.

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

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out manufacturing operations. As required by the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the ''ANNEXURE A'' forming part of this report.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified under the provisions of Section 274(1)(g) of the Companies Act 1956. The Directors have made the requisite disclosures, as required under the Companies Act, 1956 and Clause 49 of the Listing Agreement.

CORPORATE GOVERNANCE

The Company is committed to maintain the good standards of Corporate Governance. The Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the Listing Agreement. Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance together with Auditor''s Certificate regarding compliance of Corporate Governance is annexed to this report.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

I. in the preparation of annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed and that there are no material departures;

II. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit or loss of the Company for the year ended on that date;

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

IV. the Annual Accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge the valuable support and assistance extended to us by the Government of Himachal Pradesh and various other Central & State Government departments, financial institutions, bankers, customers & vendors at large and look forward to having the same support in our endeavors.

The Board of Directors express its deep gratitude and record its sincere appreciation of the dedicated efforts and commitment of all the employees. The Directors are also thankful to the esteemed shareholders for their continuous support and the confidence reposed in the Company.

By order of the Board

Place : Chandigarh SATISH BAGRODIA

Dated : 29.05.2013 Chairman

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Mar 31, 2012

The Directors have pleasure in presenting the 31st Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2012.

Financial Highlights Year ended 31.3.2012 Year ended 31.3.2011 (Rs.in lacs) (Rs. in lacs)

Sales 31624.47 35050.21

Profit before Interest & Depreciation 3019.01 5084.66

Less : Interest 2949.59 1911.92

Profit/(Loss) before Depreciation 69.42 3172.74

Less : Depreciation 1150.64 1134.14

Profit/ (Loss) before Tax (1081.22) 2038.60

Less : Provision for Taxation - Current Tax(MAT) - 254.64

- MAT Credit - (254.64)

- Deferred Tax Liability/(Assets) (159.41) 637.53

-Tax for earlier years 0.25 45.75

Net Profit/ (Loss) after Tax (922.06) 1355.32

Add : Surplus brought from previous year 2539.61 1415.18

1617.55 2770.50

Appropriations:

Proposed Dividend NIL 198.20

Corporate Dividend Tax NIL 32.69

Surplus Carried to Balance Sheet 1617.55 2539.61

1617.55 2770.50

OPERATIONAL & PERFORMANCE REVIEW

During the year under review, your Company has achieved a sales turnover of Rs. 31624.47 lacs as against sales turnover of Rs. 35050.21 lacs during the previous year and a net loss of Rs. 922.06 lacs for the year as against net profit (after tax) of Rs. 1355.32 lacs during the previous year. The Company was however able to achieve a marginal cash profit of Rs. 69.42 lacs. This was due to the multifarious business challenges faced by the Company during 2011-12 especially on the cotton front. In the close of the year 2010 & in beginning of the year 2011, the purchase prices of the Cotton & Cotton yarn were considerably high. But the same crashed unexpectedly after April/May 2011. Cotton prices which peaked at around Rs. 65,000/- per candy in March 2011 came down to approx Rs. 33,000/- per candy in June/July 2011. This unexpected crash led to losses for the Company. However the Company has well performed in the export of value added yarn during the year under review. We are pleased to inform you that your Company has been presented with the GOLD TROPHY by 'The Cotton Export Promotion Council of India1 for the highest exports of processed yarns for the year 2010-11.

In the current financial year, there are the signs of some stability in cotton prices and it is encouraging to see that both domestic as well as export segments are registering an increase in demand across all our products in the current financial year. Your Company has taken many initiatives to enhance its market leadership, product innovation, appropriate product-price mix and operating efficiencies with a special focus on sales of value added products and superior client relationships.

EXPANSION PROJECTS/PLANS OF COMPANY

Your Company has undertaken expansion and diversification of its areas of operations. It has planned to setup a new spinning unit with the capacity of 40,800 spindles, a new Circular Knitting unit in Himachal Pradesh and expansion of its existing dyeing facility at an investment of approximately Rs. 230 Crores. The Company has purchased the requisite land and has also entered with multiple banks/financial institutions for financial arrangements/ funding its expansion plans. The Company shall have the benefit of economies of scale with the total installed capacity of unit increasing for cotton spun yarns, including in-house dyeing division for complete & efficient quality control after implementation of the expansions projects. On completion, these initiatives will significantly contribute to our operational efficiency, reduction in cost and thereby increasing our profits.

The construction of the Company's Hydro Power Project at Distt. Kangra, Manuni Khad (H.P.) is going on rapidly. The implementation of this Hydro Power Project is at an advanced stage and is expected to be commissioned within current financial year 2012-2013.

CONSOLIDATION OF SHARES

During the year under review, the Company has made consolidation of 10 equity shares of Re. 1/- (Rupee One) each fully paid up into one equity share of Rs. 10/- (Rupees Ten) each fully paid up. The new ISIn No. is INE837B01031 for the equity shares of the Company having face value of Rs. 10/- each.

SUBSIDIARY COMPANY

To aid its areas of operations globally, your Company has set up a Wholly Owned Subsidiary in Hamriyah Free Zone in United Arab Emirates (U.A.E.), Dubai under the name & style of Winsome Textile Industries FZE.

According to the provisions of section 212 of Companies Act 1956, the holding Company is required to attach the balance sheet & profit & loss account etc. of its subsidiary Company along with its balance sheet. However, the Ministry of Corporate Affairs vide its general circular no. 2/2011 dated 08.02.2011 has provided general exemption from complying with the provisions of section 212 of Companies Act 1956. Accordingly, the annual accounts of Winsome Textile Industries FZE are not being attached with the balance sheet of the Company but the same will be made available to the shareholders for inspection at the head office of the Company.

CONSOLIDATED ACCOUNTS

In accordance with the Accounting Standard AS -21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements of Winsome Textile Industries Limited and Winsome Textile Industries FZE in this Annual Report.

IS/ISO 9001-2008 & 14001-2004

Your Directors are pleased to inform you that your Company continues to be holder of IS/ISO 9001-2008 Quality Management System Certificate and IS/ISO 14001-2004 Environmental Management System Certificate, issued by Bureau of Indian Standards.

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under review pursuant to the provisions of Section 58A of the Companies Act, 1956 and rules made there under.

DIVIDEND

Keeping in view to conserve the resources, your Directors do not recommend any dividend on Equity Shares for the year under review.

DIRECTORS

In accordance with the Company's Articles of Association, Shri Satish Bagrodia and Shri Chandra Mohan, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s Lodha & Co, Chartered Accountants, Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has obtained the written confirmation from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956.

COST AUDIT

As per the requirements of Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, your Company carries out an audit of cost records every year. The Company has obtained the written confirmations from M/s Aggarwal Vimal & Associates, Cost Accountants, to the effect that their appointment, if made, would be within the prescribed limits under section 224 (1-B) read with sub-section (2) of Section 233B of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956 read with provisions of Section 233B & Section 224 of Companies Act 1956. Therefore, subject to the approval of Central Government, the Board has appointed M/s Aggarwal Vimal & Associates, Cost Accountants, as Cost Auditor of the Company for the financial year 2012-13.

The Cost Audit Report for the financial year 2010-11 which was due to be filed with the Ministry of Corporate Affairs on 30.09.2011 was filed on 20.09.2011.

AUDITORS' REPORT

Observations made in the Auditor's Report are self explanatory and therefore do not call any further explanation. PARTICULARS OF EMPLOYEES

None of the employees is covered under section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules,1975 as amended.

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

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out manufacturing operations. As required by the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the 'ANNEXURE A' forming part of this report.

STATUTORY DISCLOSURES

None of the Directors of the Company are disqualified under the provisions of Section 274(1)(g) of the Companies Act 1956. The Directors have made the requisite disclosures, as required under the Companies Act, 1956 and Clause 49 of the Listing Agreement.

CORPORATE GOVERNANCE

The Company is committed to maintain the good standards of Corporate Governance. The Company has complied with the Corporate Governance requirements as stipulated under Clause 49 of the Listing Agreement. Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, the Report on Corporate Governance together with Auditor's Certificate regarding compliance of Corporate Governance is annexed to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

i) in the preparation of annual accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed and that there are no material departures;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and of the profit or loss of the Company for the year ended on that date;

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

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

ACKNOWLEDGEMENT

Your Directors acknowledge the support and assistance extended to us by the Government of Himachal Pradesh and various other Central & State Government departments, financial institutions, bankers, customers & vendors at large and look forward to having the same support in our endeavors.

The Board of Directors express its gratitude and record its sincere appreciation of the dedicated efforts and commitment of all the employees. The Directors are also thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

By order of the Board

Place : Chandigarh SATISH BAGRODIA

Dated : 30.05.2012 Chairman

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Mar 31, 2011

The Directors have pleasure in presenting the 30th Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2011.

Financial Highlights Year ended Year ended 31.3.2011 31.3.2010 (Rs.in lacs) (Rs.in lacs)

Sales 34970.74 21964.05

Profit before Interest & Depreciation 5192.62 3154.91

Less : Interest 2019.88 2005.86

Profit/(Loss) before Depreciation 3172.74 1149.05

Less : Depreciation 1134.14 1101.91

Profit/(Loss) before Tax 2038.60 47.14

Less : Provision for Taxation

- Current Tax(MAT) 254.64 7.85

- MAT Credit (254.64) (7.85)

- Deferred Tax Liability 637.53 15.76

Tax for earlier years 45.75 4.09

Net Profit/(Loss) after Tax 1355.32 27.29

Add : Surplus brought from previous year 1415.18 1387.89

2770.50 1415.18

Appropriations:

Proposed Dividend 198.20 -

Corporate Dividend Tax 32.69 -

Surplus Carried to Balance Sheet 2539.61 1415.18

2770.50 1415.18

OPERATIONS AND PERFORMANCE

During the year under review, your Company has achieved a sales turnover of Rs. 34970.74 lacs as against sales turnover of Rs. 21964.05 lacs during the previous year and a net profit (after tax) of Rs. 1355.32 lacs for the year as against net profit (after tax) of Rs. 27.29 lacs during the previous year. The Sales turnover has increased by approximately 37.19% .

In the current financial year 2010-11, besides recovery in global economic environment, domestic demand for textile products has been very strong giving the much needed positive thrust to the textile industry. There is a revival in consumer demand for textile products in domestic as well as export markets. This helped your Company to steadily increase its capacity utilization and leading to improvement in financial performance as well. Your Company continues with its task to build businesses with long-term goals based on its intrinsic strengths in terms of its quality manufacturing prowess, wide distribution network and strong customer relationships. To accelerate further value creation, your Company continues to evaluate new areas of growth & expansion. The initiatives aimed at rationalising and streamlining operations, to bring about efficiencies and reducing costs, remain top priority.

NEW PROJECTS/EXPANSION PLANS

The Company is in process of expanding its areas of opeations. The Company is planning to setup another Spinning unit with the capacity of 40,800 spindles and Circular Knitting unit in Himachal Pradesh at an investment of approximately Rs. 200 Crores. The Company will be shortly submitting the project report to the banks for funding this expansion plan.

The construction of the Companys Hydro Power Project at Distt. Kangra, Manuni Khad (H.P.) is going on swiftly and your Company is making its consistent efforts to complete with in the current financial year.

IS/ISO 9001-2008 & 14001-2004

Your Directors are pleased to inform you that your Company continues to be holder of IS/ISO 9001-2008 Quality Management System Certificate and IS/ISO 14001-2004 Environmental Management System Certificate, issued by Bureau of Indian Standard.

GLOBAL DEPOSITORY RECEIPTS ISSUE (GDRs) OF COMPANY

During the year under review, your Company has raised an amount of US$ 9997500 from Global Depository Receipts (GDRs) issue. The Board of Directors in their meeting held on 31.03.2011 have issued & allotted 6,45,00,000 equity

shares of Re.1/- each at a premium of Rs 5.94/- per share each fully paid up underlying the 12,90,000 Global Depository Receipts (GDRs) at a price of US$ 7.75 per GDR. Each GDR represents 50 Equity shares of the Company. The fund raised through it will be utilised as stipulated. The Global Depository Receipts (GDRs) of the Company are listed in Luxembourg Stock Exchange. After the allotment of underlying equity shares, the paid up equity capital of the Company stands increased from Rs. 13,37,00,000/- to Rs. 19,82,00,000/- comprising of 19,82,00,000 equity shares of Re. 1/- each.

FIXED DEPOSITS

During the year, your Company did not accept any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 and rules made thereunder.

SUBSIDIARIES

Your Company does not have any subsidiary company.

DIVIDEND

In order to conserve the resources and future investment in expansion projects, your Directors are pleased to recommed a dividend of Re. 0.10/- per share i.e. @10 % on every equity share of Re. 1/- each, for approval of shareholders at the forthcoming Annual General Meeting.

DIRECTORS

In accordance with the Companys Articles of Association, Shri Satish Girotra and Shri Manish Bagrodia, Directors retire by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s Lodha & Co, Chartered Accountants, as Statutory Auditors of the Company, hold office untill the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from M/s Lodha & Co., Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956.

COST AUDIT

As per the requirements of Central Government and pursuant to Section 233B of the Companies Act, 1956, your Company carries out an audit of cost records every year. Subject to the approval of Central Government, the Board has re-appointed M/s V. Kumar & Associates, Cost Accountants, as the Cost Auditor of Company, for the financial year 2011-12.

STATEMENT OF PARTICULARS OF EMPLOYEES

Pursuant to the amendment in Companies (particulars of employees) Rules, 2011 vide notification No. GSR 289(E) dated 31.03.2011 issued by Ministry of Corporate Affairs, no employee of the Company was in the receipt of Rs. Sixty Lacs per annum or Rs. Five Lacs per Month during the year under review. Accordingly, no particulars of Employees are given pursuant to the provisions of Section 217(2A) of Companies Act, 1956.

CONSERVATION OF ENERGY

As required by the provisions of Section 217(1)(e) of the Companies Act, 1956 , read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the Annexure A forming part of this report.

AUDITORS REPORT

Auditors observations regarding non provision of doubtful debts have been explained in details in Note No. 7 of Schedule 14B, read with Accounting Policies & Notes on Accounts.

CORPORATE GOVERNANCE

As required under clause 49 of the Listing Agreement with the Stock Exchange, the Report on Corporate Governance together with Auditors Certificate regarding compliance of the SEBI Code of Corporate Governance is annexed to this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

i) in the preparation of annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed and that there are no material departures.

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011, and of profit/(loss) of the Company for the year ended on that date.

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

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

ACKNOWLEDGEMENT

Your Directors acknowledge the support and assistance extended to us by the Government of Himachal Pradesh and various government departments, financial institutions, bankers, shareholders and investors at large and look forward to having the same support in our endeavours.

Your Directors would like to appreciate the efforts of the Companys employees for their continued co-operation and unstinted support extended to the Company.



By order of the Board

SATISH BAGRODIA CHAIRMAN

Place : Chandigarh Dated : 16.05.2011

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Mar 31, 2010

The Directors have pleasure in presenting the 29th Annual Report together with the Audited Statement of Accounts of the Company for the Financial year ended 31st March, 2010.

Financial Highlights Year ended

31.3.2010 Year ended

31.3.2009

(Rs.in lacs) (Rs. in lacs)

Sales 21964.05 17098.71

Profit before Interest & Depreciation 3154.91 1184.79

Less: Interest 2005.86 2005.27

Profit/(Loss) before Depreciation 1149.05 (820.48)

Less: Depreciation 1101.91 1053.03

ProfiV(Loss) before Tax 47.14 (1873.51)

Less : Provision for Taxation

- Current Tax 7.85 -

- Fringe Benefit Tax - 8.43

- MAT Credit (7.85) -

- Deferred Tax 15.76 (532.75)

- Tax for earlier years 4.09 -

Profit/(Loss) after Tax 27.29 (1349.19)

Add : Surplus brought forward from

previous year 1387.89 2737.08

1415.18 1387.89

Appropriations:

Dividend (Previous year Nil) - -

Surplus carried to Balance Sheet 1415.18 1387.89

1415.18 1387.89

OPERATIONS AND PERFORMANCE

Inspite of the financial crisis in global economic, during the year under review, your Company had achieved a sales turnover of Rs. 21964.05 lacs as against sales turnover of Rs. 17098.71 lacs during the previous year. Though the Sales turnover had increased by approximately 28.45% with net profit (after tax) of Rs. 27.29 lacs for the year as against net loss of Rs. (1349.19) lacs during the previous year. The profitability during the year had been better due to better capacity utilisation and revival in demand for and products such as garments and home textiles in US and Europe Markets. The current situation in the PllGS countires of Europe remain an area of concern which could affect the revival in demand.

NEW PROJECTS/ EXPANSION PLANS

Your Directors are pleased to inform you that as a part of the Companys Expansion Project 13000 Spindles and dye house capacity expansion by 10 tons per day had been installed and commercial producation started. Out of 23040 spindles which were to be replaced, 15936 spindles were replaced in the previous uear and the balance in the current year stands completed. The work of Hydro Power Project of the Company at Distt. Kangra, Manuni Khad (H.R) is under full swing and it is expected to be completed in the next financial year i.e. 2010-11.

IS/ISO 9001-2000 & 14001

Your Directors are pleased to inform you that Your Company continues to be holder of ISO 14001 Environmental Management System Certificate & ISO 9001-2000 Quality Management System Certificate issued by Bureau of Indian Standard.

PREFERENTIAL ALLOTMENT

Board of Directors of your Company had allotted 75,00,000 convertible warrants at the rate of Rs.10/- per warrant & at a premium of Rs. 14/- per warrant (total Rs. 24/- per warrant) to promoters & non promoter groups on 10.11.2008 after taking approval of shareholders of the Company in their Annual General Meeting held on 23.09.2008. Out of which 14,40,000 (pre-split) nos. of convertible warrants were converted into 1,44,00,000 (post-split) equity shares of Rs. 1/- each at a premium of Rs. 1.40/- per share each fully paid up (total Rs. 2.40/- each) on 24.03.2010 and balance 60,60,000 (pre-split) nos. of convertible warrants have also been converted into 6,06,00,000 (post-split) equity shares of Rs. 1/- each at a premium of Rs. 1.40/- per share each fully paid up (total Rs. 2.40/- each) on 09.05.2010 and equity shares arising out from said conversion have been allotted to promoters & non promoter groups respectively. The issue proceeds utilised for the purpose as stipulated and balance amount have been parked into working capital. During the year 2009-10, each & every equity share of the Company of nominal value of Rs. 10/- each has been sub- divided into 10 equity shares of Re. 1/-each.

DIVIDEND

keeping in view the inadequate profits and funds constraints, your Directors do not recommend any dividend for the financial year 2009-10.

DIRECTORS

In accordance with the Companys Articles of Association, Shri Satish Bagrodia and Shri Chandra Mohan, Directors retire by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s Lodha & Co, Chartered Accountants, as Statutory Auditors of the Company, hold office untill the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from M/s Lodha & Co., Chartered Accountants, to the effect that their re- appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956.

FIXED DEPOSITS

During the year, your Company did not accept any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 and rules made thereunder.

SUBSIDIARIES

Your Company does not have any subsidiary company.

CONSERVATION OF ENERGY

As required by the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in the Annexure A forming part of this report.

PARTICULARS OF EMPLOYEES

The Particulars of the employees as required by the provisions of section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, is annexed to this report.

AUDITORS REPORT

Auditors observations regarding non provision of doubtful debts and pending approval of Central Goernment for managerial remuneration to Chairman & Whole Time Director have been explained in details in Notes No. 7 and 19 (B) of Schedule 15(B) respectively, read with Accounting Policies & Notes on Accounts are self explanatory and therefore do not require any further clarifications.

CORPORATE GOVERNANCE

As required under clause 49 of the Listing Agreement with the Stock Exchange, the Report on Corporate Governance together with Auditors Certificate regarding compliance of the SEBI Code of Corporate Governance is annexed to this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

i) in the preparation of annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed and that there are no material departures.

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010, and of the profit of the Company for the year ended on that date.

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

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

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the assistance and support extended by different Financial Institutions, Banks and Government of Himachal Pradesh .

Your Directors also take this opportunity to thank customers, suppliers and shareholders for the cooperation, trust and confidence reposed in the Company.

Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company.



By order of the Board

Place : Chandigarh SATISH BAGRODIA

Dated : 27.05.2010 Chairman