డైరెక్టర్ల నివేదిక Parasrampuria Synthetics Ltd.

Mar 31, 2015

Dear Members,

The Directors present the 32nd Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2015.

Financial summary or highlights/Performance of the Company

(Rs. in Lacs)

Current Year Previous Year Ended 31.03.2015 Ended 31.03.2014

Sales(Net of Excise Duty) 4435.64 4526.32

Profit/(Loss) before interest and (86.22) 122.78

depreciation interest & Finance charges 5.78 3.03

Profit/(Loss) before Depreciation (92.00) 119.75

Depreciation 190.78 159.12

Profit/(Loss) Before tax and (282.78) (39.37) Exceptional item

Exceptional Items (413.77) 0.00

Provision for Tax/Deferred Tax 22.25 5.39

Profit/(Loss) After tax (674.30) (33.98)

Loss brought forward (165579.66) (165545.68)

Balance Carried forward (166253.96) (165579.66)

Dividend

On account of heavy losses, your Directors are not in a position to recommend dividend for the year.

Reserves

During the year the company has incurred loss of Rs 674.30 lacs as against the loss of Rs.33.98 Lacs for the previous year.

Brief description of the Company's working during the year/State of Company's affair

During the year under review the Pithampur unit was operational and being runs on job work basis due to non availability of working capital funds. The total turnover/job-work receipts of this unit are Rs. 4435.64 lacs which includes Rs. 590.15 lacs on account of own sale and Rs.3845.49 lacs on account of Job work income as against the total turnover of Rs. 4526.32 lacs (own sale Rs. 525.86 lacs and job-work receipt Rs. 4000.46 lacs) for previous year. During the. year the unit has incurred loss Rs 182.24 lacs as against the profit of Rs.82.71 Lacs for the previous year. The operations of the unit during the year remained partly disrupted, due to shortage of labour and closer of unit for 14 days in the month of march due to strike by the labour which has resulted into low capacity utilisation.

The Bhiwadi unit of the company is closed since May, 2004 and remained close during the period under review. The Terry Towel unit of the company at Khushkhera was taken over by ARCIL through an act of SARFASEI u/s 13(4) in the year 2008 and has been dispose off by them and the final sale certificate was issued by them in Oct 2012. The fact of sale of Khushkhera Plant came to the knowledge to the company during the proceeding before Hon'ble Debt Recovery Tribunal (DRT) in month of January 2013. In view of such sale certificate, in financial year 2012-13 the Company has removed the assets of Khushkhera unit as well as the corresponding liabilities thereof.

Change in the nature of business, if any

There has been no change in the nature of business of the company.

Material changes and commitments, if anv. affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There has been no material change and commitments during the financial year and at the end of financial year.

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

The Company is a sick industrial unit and in compliance with the Sick Industrial Companies (Special Provision) Act, 1985 have got its reference registered with the Hon'ble BIFR.

The Company had been declared a sick Company by the Hon'ble BIFR under the provision of Sick Industrial Companies (Special Provision) Act, 1985 vide it's letter dated 07/11/2006. ARCIL filed a Miscellaneous Application (MA) No. 675 requesting the Hon'ble BIFR to abate the company's reference in view of the fact the secured creditors have taken action against the company under SARFAESI Act. The Hon'ble BIFR in its hearing held on 06 December 2010 abated the reference of the company under the third proviso of Section 15 (1) of SICA. The Company thereafter approached Hon'ble AAIFR against the order of Hon'ble BIFR and also filed a fresh reference based on audited balance sheet for the year ended March 2010, with Hon'ble BIFR on 20th December 2010 which was registered as Case no 12/2011 and this reference was rejected by Hon'ble BIFR on 26.09.2012 on the ground that the balance sheet of the Company is not modified appropriately. The Company as per the directions of the AAIFR modified its balance sheet for the year 2012-13 and filed a fresh reference and the same was registered as Case no. 67/2013 and proceeding are on before BIFR in the matter.

The loan liabilities pertaining to ICICI and PNB were assigned to one of the NBFC by ARCIL to whom the Company had approached and had given an advance for settlement of the dues and the deal is yet to be concluded.

Details in respect of adeguacv of internal financial controls with reference to the Financial Statements.

The Company has adequate internal control systems in commensuration with its size and nature of business. The Management has overall responsibility for the Company's internal control system to safeguard the assets and to ensure reliability of financial records.

The Board of Directors has its Audit Committee, which reviews all financial statements and ensures adequacy of internal control system.

Details of Subsidiarv/JointVentures/Associate Companies

Not applicable in our case as the company does not have any subsidiary Joint Ventures or Associates companies.

Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement.

Not applicable in our case as the company does not have any subsidiary Joint Ventures or Associates companies.

Deposits

The Company had not accepted any deposits during the financial year ending March 31, 2015. During the year under review no amount is outstanding on account of Fixed Deposits.

Statutory Auditors

In terms of amendment made by SEBI in clause 41 of the Listing Agreement vide its circular no. CIR/ CFD/ DIL/ 1/2010; every listed company is required to appoint an auditor who had subjected himself to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.

M/s Jain Raj Associates, Chartered Accountants the retiring statutory auditor of the Company, offer themselves for reappointment. The Company has received certificate from them that they hold peer review certificate from Peer Review Board of the Institute of Chartered Accountants of India & their appointment, if made at the forthcoming Annual General Meeting, would be within the ceiling limits prescribed under section 134 and section 141 of the Companies Act, 2013 and they are not disqualified to act as Auditors of the Company for next two financial years i.e. 2015-2016 and 2016-17.

Auditors' Report

Point-wise explanations to the observations on the Basis of Qualified Opinion are as follows:

1. Since the company is a Sick Company and having accumulated losses, no provision of leave encashment has been made. The provision for gratuity had been made on the basis of Life Insurance Corporation (LIC) gratuity policy taken by the Company in the past which had been lapsed.The Company is discharging the current liability in respect of leave encashment and gratuity, on the basis of as and when such liabilities arise, whereas provisions against past liabilities are sufficiently provided. Thus, there has been non-compliance of Accounting Standard AS-15 to that extent.

2. Regarding non-provisions of interest liabilities as per point no 2 to 6 of the report of in respect of pre- lease charges, interest and premium on redemption of debentures, interest on inter corporate deposit and other loans, non-provision of interest on loans and working capital facilities from various Financial Institutions and Banks including liabilities for abandoned project, custom duty, demurrage and insurance charges relating to imported machinery lying at port, it is explained hereby that since the Company is a sick industrial unit duly registered with Hon'ble BIFR under SICA (Special Provisions) 1985 and in view of any likely relief, which may be allowed while arriving at settlement with Secured lenders of the Company, these liabilities could not be adequately provided. Therefore, the Management has decided not to provide further liabilities in the Books of Accounts as mentioned above.

3. As regards to non-provision of impairment losses for the assets lying at Custom warehouse, the loss due to accidental fire reported by CWC wherein the damage is unascertained and relevant assets are under the charge of Court Receiver, the matter being sub-judice, the management does not have adequate means to assess the same, As regards to non-provision of impairment losses for the assets of Bhiwadi Unit, it is explained that the production at the unit is suspended, therefore the future cash flow and net realizable value have not been assessed. Therefore, there has been non-compliance of Accounting Standard AS- 28, to that extent.

4. Regarding depreciation being charged as a continuous process plant, technical opinion was sought by Company and it has provided depreciation accordingly.

5. Regarding part recovery of dues from debtors, the properties were acquired by the Company based on the valuation report of the Government approved valuer at that time.

6. Regarding unascertained losses relating to abandoned project the management is unable to estimate such losses as the same is not possible being the assets lying in the custom bonded warehouse partly damaged by fire.

7. Regarding going concern assumption the management of the view that Company's reference is pending before Hon'ble BIFR and in expectancy of reliefs and concessions in form of waiver of interest and other liabilities being restructured, the financial position of the Company will improve and it will be able to match its future cash flows with that of the liabilities.

8. Preference Shares could not be redeemed on the due dates in view of continued financial crisis

9. Regarding non renewal of insurance policies it is stated that on account of severe financial crisis, policies could not be renewed. However, the fact was communicated to the financial institutions in the past.

10. The ARCIL in possession of Khushkhera Unit of the company have sold the assets of the company and in terms of the final sales certificate the assets of the units and corresponding liabilities thereof have been removed from the books of accounts of the company during FY 2012-13, refer note no. 20.21 (a) of the balance sheet.

11. On account of defaults and financial crises it is difficult to convince any other suitable person to join the Board of the Company. Therefore the Management has no option but to reappoint the retiring Directors.

Share Capital

a) Issue of equity shares with differential rights

During the year under review the Company has not issued any equity shares with differential rights.

b) Issue of sweat equity shares

The Company has not issued any sweat equity till date.

c) Issue of employee stock options

The Company has not issued employee stock options, as provided in rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014.

d) Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees

No such provision of money has been made by the company, as provided in rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014

Extract of the annual return

The extract of the annual return is attached as Annexure-A to this report

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information required to be disclosed under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given hereunder:

A) Conservation of energy:

PI (Pithampur, Indore):

The Unit is following the recommendations of a renowned consultant, and has been able to improve the power factor and motor efficiency. The unit has replaced all the conventional lamps, chokes and other electrical equipments by power saving devices like energy efficient capacitors, CFL, electronic chokes etc. Total energy consumption and energy consumption per unit of production are given hereunder:

A POWER AND FUEL CONSUMPTION PITHAMPUR UNIT

1. Electricity

a. Purchase

Units (Lacs-KWH) 295.96

Total Amount (Rs. in Lacs) 1677.41

Rate/Unit(Rs.) 5.67

b. Own Generation through DG Sets

2. Coal -

3. Furnace Oil -

4. Others/lnternal Generation -

5. Consumption per unit of production Electricity 19.06

Cotton/Blended Yam (Rs./Kg.)

(B) Technology absorption:

The company has not undertaken any research and development activities and no expenditure have been incurred.

(C) Foreign exchange earnings and Outgo:

The total foreign exchange earned during the Current Year (including deemed export) was Rs. Nil lacs as against the previous year of Rs.Nil lacs and outgo of Foreign exchange during the Current year was Rs 6.45 lacs as against Rs. 1.66 lacs in the previous year.

Corporate Social Responsibility (CSR)

The provisions relating to CSR under section 135 are not applicable to the Company.

Directors:

(A) Changes in Directors and Key Managerial Personnel

Shree Omprakash Parasrampuria, aged about 76 years,director of the company has resigned from the directorship of the company w.e.f 31.03.15. The Board of Directors of the company has accepted his resignation and acknowledged the contribution made by him during his tenure as director of the company and wished him a healthy and happy life ahead. Shri Ratanlal Parasrampuria aged about 77 years director of company has resigned from the directorship of the company w.e.f.14.03.15. The Board of Directors of the company, has accepted his resignation and applauded for the achievements made during his tenure by the company and wished him happy and healthy life ahead.

Shri Mahesh Dadheech (DIN3174253), Director of the company retires by rotation and being eligible offers himself for reappointment.

Shri Satendra Singh Rawat (DIN 6401366), Director of the company retires by rotation and being eligible offers himself for reappointment.

Further, in terms of section 149 read with section 152 of the Companies Act 2013, an Independent Director is now not required to retire by rotation, and may be appointed on the Board of the Company for maximum two terms of up to five years each. Accordingly, it is proposed to appoint the existing independent director Mr.S.K. Anand, for an initial term of five years, effective from 31st March, 2015. Mr. SK Anand has confirmed his independence in terms of the requirements of Companies Act, 2013. The company has received notice as per the provisions of section 160 of the Companies Act, 2013, and also received a declaration form Mr. SK Anand that he meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

Further, in terms of section 149 read with section 152 of the Companies Act 2013, an Independent Director is required to be appointed on the Board of the Company for maximum two terms of up to live years each. Accordingly, it is proposed to appoint Independent Women Director Neha Rawat, for an . initial term of five years, effective from 14th August, 2015. Ms. Neha Rawat has confirmed her independence in terms of the requirements of Companies Act, 2013. Since Ms Neha Rawat was appointed as additional Director during the year, company has received notice as per the provisions of section 160 of the Companies Act, 2013 and also received a declaration form Ms. Neha Rawat that she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013

(B) Formal Annual Evaluation

The Board of Director of the Company has decided that evaluation of the performance of the Board as a whole, Board Committees and Directors shall be carried out on an annual basis. During the year, the first Evaluation cycle was completed by the Company internally which included the Evaluation of the Board as a whole, Board Committees and Directors. The exercise was led by the Non Executive Director along with a Senior Independent Director of the Company. The Evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgement. The results of the Evaluation were shared with the individual directors and Chairman of respective Committees. Based on the outcome of the Evaluation, the Board and Committees have agreed on the action plan to improve on the identified parameters.

Number of meetings of the Board of Directors

During the year Four Board Meetings and Four Audit Committee Meetings were convened and held. The details of these are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Details of establishment of vigil mechanism for directors and employees

The Company has established a Whistle Blower Policy for Directors and employees to report their genuine concern. The details of the same is explained in the Corporate Governance Report.

Nomination and Remuneration Committee

The Remuneration Committee of the Board comprises of following members:

1. Shri Alok Parasrampuria Managing Director

2. Shri Sushil Anand Independent Director

Particulars of loans, guarantees or investments under section 186

There are no loans given, guarantees issued or investments made to which provisions of Section 186 are applicable to the Company.

Particulars of contracts or arrangements with related parties:

The company has not entered into any contract or arrangement with related parties.

Managerial Remuneration:

The Company has not paid managerial remuneration to any director except sitting fee at the rate of Rs. 2000/- for attending each meeting of Board of Directors and any Committee thereof to independent Director/s.

Secretarial Audit Report

A Secretarial Audit Report given by Ms Rachna Lodha a practicing company secretary is attached as Annexure - B. Secretarial Audit As mentioned above your Company is a sick industrial unit and out of the three units of Company one is taken over by secured creditors of the company under SARFESI Act and flagship unit at Bhiwadi is lying close since 2004, only one unit of the company is functional that is too on job work basis. In view of the above your company is facing severe financial crunch and finding it difficult to even meet its day to day expenses. Therefore it was very difficult to broad base the board of directors of the company. However company had appointed one Independent Women director and reconstituted various committees so as to comply with most of the compliances under listing agreements with the stock exchanges. Your company intent to comply formatting and making all efforts to fulfill the requirements of Companies Act 2013 and to rectify other deficiencies as reported in the Secretarial Audit Report.

Corporate Governance

Your Company has ensured continued compliance of Corporate Governance requirements during the period under review. Your Company lays strong emphasis on transparency, disclosure and independent supervision to increase various stakeholders' value. As required by Clause 49 of the Listing Agreement the reports on Management Discussion and Analysis, Corporate Governance as well as the Certificate regarding compliance of conditions of corporate governance, are annexed and form an integral part of this report.

Risk management policy

The products of the Company are well established in the market and the Management does not perceive any threat specific to its products. However, in the present context the capacities of the unit of the Company are too insignificant to compete in the international markets. Due to bad financial condition, the Management is certainly not in a position to avail of the benefits of the opportunities coming its' way.

Particulars of Employee

There was no employee whose remuneration was in excess of the limits prescribed under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Directors' Responsibility Statement

Pursuant to the requirement under section 134(5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed:

i. that in the preparation of the accounts the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year under review;

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

iv. that the Directors have prepared the accounts on a "going concern" basis;

v. that the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the directors had devised proper systems to ensure compliance with the provisions of all applicable * laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Directors take this opportunity to express their deep gratitude to the Central Government, Government of Rajasthan, Government of Madhya Pradesh, Financial Institutions, Bankers and the shareholders for their continued co-operation and support.

For and on behalf of the Board

Place: New Delhi Alok Parasrampuria Date :14th August, 2015 Chairman DIN 426515

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Mar 31, 2011

Dear Members,

The Directors present the 28th Annual Report together with the Audited Accounts of the Company for the year ended 31 st March 2011.

RNANCIALRESULTS (Rs. in Lacs)

Current Year Previous Year Ended 31.03.11 Ended31.03.10

Sales 4450.20 3252.17

Profit/(Loss) before

interest and depreciation 312.61 113.28

Interest & Finance charges 24.58 11.09

Profif(Loss) before

Depreciation 288.03 102.19

Depreciation 439.90 508.04

Profit/(Loss) Before tax

and Exceptional item (151.87) (405.85)

Exceptional Items 0.00 (273.15)

Provision for Tax/Deferred Tax 65.48 80.73

Profit/(Loss) After-tax (86.39) (598.27)

Loss brought forward (166426.90) (165828.63)

Balance Carried forward (166513.29) (166426.90)

DIVIDEND

On account of heavy losses, your Directors are not in a position to recommend dividend for the year.

OPERATION

During the year under review the Bhiwadi and Khushkhera units of the company remain closed. The Pithampur unit was being run on job work basis due to non availability of working capital funds and extremely volatile fluctuations in the raw material prices. The total turnover/job-work receipts of this unit are Rs. 4450.20 lacs which includes Rs. 589.14 lacs on account of own sale and Rs.3861.06 lacs on account of Job work income as against the total turnover of Rs. 3257.17 lacs (own sale Rs. 240.13 and job-work receipt Rs. 3012.04) for previous year. During the year the unit earned profit the tune of Rs. 145.83 Lacs for the year as against the loss of Rs. 168.27 Lacs for the previous year.

Parasfab International, the Terry Towel unit of the company remain closed as the ARCIL in whose favour the liabilities of the unit were assigned had initiated the proceeding by invoking section 13(4) of SARFAESI Act and taken over possession of the unit to recover their dues.

The Company had been declared a sick Company by the Hon'ble BIFR under the provision of Sick Industrial Companies (Special Provision) Act,1985 vide it's letter dated 07/11/2006. ARCIL filed a Miscellaneous Application (MA) No. 675 requesting the Hon'ble BIFR to abate the company's reference in view of the fact the secured creditors have taken action against the company under SARFAESI Act. The Hon'ble BIFR in its hearing held on 06 December 2010 abated the reference of the company under the third proviso of Section 15 (1) of SICA. The Company thereafter approached Hon'ble AAIFR against the order of Hon'ble BIFR and also filed a fresh reference based on audited balance sheet for the year ended March 2010, with Hon'ble BIFR on 20th December 2010 which was registered as Case no 12/2011

The loan liabilities pertaining to ICICI and PNB were assigned to one of the NBFC by ARCIL to whom the Company had approached and had given an advance for settlement of the dues and the deal is yet to be concluded.

EXPORTS

During the year there were no export sales.

FIXED DEPOSIT

The Company had not accepted any deposits during the financial year ending March 31, 2011. During the year under review no amount is outstanding on account of Fixed Deposits.

AUDITORS

In terms of amendment made by SEBI in clause 41 of the Listing Agreement vide its circular no. CIR/ CFD/ DIL/1/2010; every listed company is required to appoint an auditor who had subjected himself to the peer review process of Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.

M/s Jain Raj Associates, Chartered Accountants the retiring statutory auditor of the Company, offer themselves for reappointment. The Company has received certificate from them that they hold peer review certificate from Peer Review Board of the Institute of Chartered Accountants of India & their appointment, if made at the forthcoming Annual General Meeting, would be within the ceiling limits prescribed under section 224(1-B) of the Companies Act, 1956 and they are not disqualified to act as Auditors of the Company for the year 2011-2012.

AUDITORS'REPORT

Point-wise explanations to the observations of the Auditors are as follows:

Note No. 4(IV) of Auditors Report:

Since the company is a Sick Company and having accumulated losses, no provision of leave encashment has been made. The provision for gratuity had been made on the basis of Life Insurance Corporation (LIC) gratuity policy taken by the Company in the past which had been lapsed. The Management is of the opinion that consequent upon the payments already made to the employees of the Bhiwadi Unit, and for Khushkhera unit the total liabilities in this regard is provided in the books, both these units constitute about 80% of the total work force of the Company. Therefore the liabilities already provided for in the books are sufficient to meet out gratuity liabilities towards the remaining employees. Thus, there has been non-compliance of Accounting Standard AS-15 to that extent.

As regards to non-compliance of Accounting Standard AS-13 it is explained that the investment made by the company in Rajasthan Polyesters Ltd. and in Rajasthan Texfab Ltd. are for long term strategic purposes. Therefore, the diminution in value between cost of investment and market/breakup value has not been considered in accounts. Therefore, there has been non-compliance of Accounting Standard AS- 13, to that extent.

As regards to non-provision of impairment losses for the assets lying at Custom warehouse, the loss due to accidental fire reported by CWC wherein the damage is unascertained and relevant assets are under the charge of Court Receiver, the matter being sub-judice, the management does not have adequate means to assess the same, As regards to non- provision of impairment losses for the assets of Bhiwadi and Khushkhera Units it is explained that the production at both the units is suspended, therefore the future cash flow and net realizable value have not been assessed. Therefore, there has been non-compliance of Accounting Standard AS- 28, to that extent.

Note No. 4(V) of Auditors Report:

On account of defaults and financial crises it is difficult to convince any other suitable person to join the Board of the Company. Therefore, the Management has no option but to reappoint the retiring Directors.

Note No. 4(VI) of Auditors Report:

(a) This being technical matter, technical opinion was sought by Company and it has to be considered as continuous process plant.

(b) The property was acquired by the Company based on the valuation report of the Government approved value.

(c) On Account of severe financial crisis insurance policies could not be taken. However, this was communicated to the financial institutions in the past.

(d) As explained above the management is of the opinion that losses which may arise are unascertained in capital work in progress pending in the Balance Sheet.

(e) On account of continued financial crisis Preference Shares could not be redeemed on the due dates.

(f) No further information is being provided by the ARCIL after their take-over of the unit, therefore assets and liabilities are being continued as it was being shown in the earlier years.

(g) Regarding non compliance of Section 383A, it is stated that the Company have shortlisted a candidate for the post of company secretary who is expected to join the office shortly. However a firm of practicing company secretary has also been appointed to look after the day to day legal obligations.

Note No. 4(VII) of Auditors Report:

No provision for import duty on import of raw material under advance license and duty against plant and machinery under EPCG scheme are being made as the Company is under BIFR and expecting waiver/ extension to fulfill the export obligation from Government authorities.

Regarding non-provision of pre-lease charges, interest and premium on redemption of debentures, interest on inter corporate deposit and other loans, non-provision of interest on loans and working capital facilities from various Financial Institutions and Banks including liabilities for abandoned project, demurrage and insurance charges relating to imported machinery lying at port, it is explained hereby that since the Company is a sick industrial unit and have registered with the Hon'ble BIFR under the provision of SICA, 1985; these liabilities could not be adequately provided in view of any likely relief, which may be allowed by the Hon'ble BIFR. Therefore, the Management has decided not to provide further liabilities in the Books of Accounts as mentioned above.

DIRECTORS

Since the date of the last Annual General Meeting there has been changes in the Board of Directors of the Company Shri Bishan Dass Kaler joined the Board as Nominee Director of Hon'ble BIFR, resigned from the Board due to abatement of reference of the Company by Hon'ble BIFR. We take this opportunity to place record our deepest appreciation to Shri Bishan Das Kaler for his valuable suggestions and guidance during his short tenure as Nominee Director of the Company.

Shri S. K. Anand, Director of the Company, retires by rotation and offers himself for reappointment. Shri S. K. Anand, Director of the Company is about 80 years of age. He is a retired Govt. Official and he is associated with the Company since 2002 as an independent Director.

Shri Ratanlal Parasrampuria, director of the company, retires by rotation and being eligible offers himself for reappointment. Shri Ratanlal Parasrampuria is about 77 years of age. He is a businessman and has vast experience in the fields of business and administration. He is a promoter director of the company and is associated with the Company since 1985.

DIRECTORS' RESPONSIBILITY STATEMENT

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

i. That in the preparation of the accounts for the financial year ended March 31, 2011 the applicable accounting standards except AS-15 AS-13 and AS-28 as to the extent as referred to in this report under the head "Auditors Report" have been followed along with proper explanations relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and to the profit or loss of the Company for the year under review;

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

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

CORPORATE GOVERNANCE

As required under the clause 49 of the listing agreements a report on Corporate governance is provided separately in the annual report of the company and as required a certificate from the Auditors of company is annexed hereto and forms a part of this Directors Report.

PERSONNEL

The Board expresses its deep appreciation to all sections of employees in the Company for their devoted services and valuable contribution.

Harmonious industrial relations continued to prevail in the factories during the year 2010-2011.

PARTICULARS OF EMPOLYEES

There was no employee, whose remuneration was in excess of the limits prescribed under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 with respect to these matters is appended along with and forms part of this report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their deep gratitude to the Central Government, Government of Rajasthan, Government of Madhya Pradesh, Financial Institutions, Bankers and the shareholders for their continued co-operation and support.

For and on behalf of the Board

Place: New Delhi Omprakash Parasrampuria

Date: 05.08.2011. Chairman

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Mar 31, 2010

The Directors present the 27th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Current Year Previous Year

Ended 31.03.10 Ended31.03.09

Sales 3252.17 9267.75

Profit/(Loss) before

interest and depreciation 113.28 (1050.20)

Interests Finance charges 11.09 118.81

Profit/(Loss) before

Depreciation 102.19 (1169.01)

Depreciation 508.04 697.59

Profit/(Loss) Before tax

and Exceptional item (405.85) (1866.60)

Exceptional Items (273.15) 3390.81

FBT (0.00) (7.13)

Provision for Tax/Deferred Tax 80.73 135.49

Profit/(Loss) After tax (598.27) 1652.57

Loss brought forward (165828.63) (167481.20)

Balance Carried forward (166426.90) (165828.63)

DIVIDEND

On account of heavy losses, your Directors are not in a position to recommend dividend for the year.

OPERATION

During the year under review the Bhiwadi and Khushkhera units of the company remain closed.

Due to non availability of working capital funds and volatile fluctuations in raw material prices coupled with subdued finished goods prices the Pithampur unit was being run on job work basis. The total turnover/job-work receipts of this unit is Rs. 3257.17 lacs which includes Rs. 240.13 lacs on account of own sale and Rs. 3012.04 lacs on account of Job work income as against the total turnover of Rs. 7926.95 for previous year. During the year the unit incurred loses to the tune of Rs. 168.27 Lacs for the year as against the loss of Rs. 1057.30 Lacs for the previous year.

Parasfab International, the Terry Towel unit of the company remain closed as the ARCIL in whose favour the liabilities of the unit were assigned had initiated the proceeding by invoking section 13(4) of SARFAESI Act and taken Over possession of the unit to recover their dues.

The Company had been declared a sick Company by the Honble BIFR under the provision of Sick Industrial Companies (Special Provision) Act,1985 vide its letter dated 07/11/2006.

The loan liabilities pertaining to ICICI and PNB were assigned to one of the NBFC by ARCIL to whom the Company had approached and had given an advance for settlement of the dues and the deal is yet to be concluded.

EXPORTS

Exports during the year were of the value of Rs. 26.30 lacs(deemed exports) as compared to Rs. 2470.48 lacs for the previous year.

FIXED DEPOSIT

As on March 31, 2010 total unpaid Fixed Deposit was amounting to Rs 2.42 lacs as compared to Rs. 15.30 lacs of previous year. During the year the Company made payments to the extent of Rs. 12.88 lacs against the settlements of FD liabilities. The company is regularly making payments in compliance of such settlements.

AUDITORS

In terms of amendment made by SEBI in clause 41 of the Listing Agreement vide its circular no. CIR/CFD/ DIL/1/2010; every listed company is required to appoint an auditor who had subjected himself to the peer review process of institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.

M/s Jain Raj Associates, Chartered Accountants the retiring statutory auditor of the Company, offer themselves for reappointment. The Company has received certificate from them that the hold peer review certificate from Peer Review Board of the Institute of Chartered Accountants of India & their appointment, if made at the forthcoming Annual general Meeting, would be within the ceiling limits prescribed under section 224 (1-B) of the Companies Act, 1956 and that they are not disqualified act as Auditors of the Company for the Year 2010-2011.

AUDITORS REPORT

Point-wise explanations to the observations of the Auditors are as follows:

Note No. 4(lV) of Auditors Report:

Since the company is a Sick Company and having accumulated losses, no provision of leave encashment has been made. The provision for gratuity had been made on the basis of Life Insurance Corporation (LIC) gratuity policy taken by the Company in the past which had been lapsed. The Management is of the opinion that consequent upon the payments already made to the employees of-the Bhiwadi Unit, and for Khushkhera unit the total liabilities in this regard is provided in the books, both these units constitute about 80% of the total work force of the Company. Therefore the liabilities already provided for in the books are sufficient to meet out gratuity liabilities towards the remaining employees. Thus, there has been non-compliance of Accounting Standard AS- 15 to that extent.

As regards to non-compliance of Accounting Standard AS-13 it is explained that the investment made by the company in Rajasthan Polyesters Ltd. and in Rajasthan Texfab Ltd. are for long term strategic purposes. Therefore, the diminution in value between cost of investment and market/breakup value has not been considered in accounts. Therefore, there has been non-compliance of Accounting Standard AS- 13, to that extent.

As regards to non-provision of impairment losses for the assets lying at Custom warehouse, the loss due to accidental fire reported by CWC wherein the damage is unascertained and relevant assets are under the charge of Court Receiver, the matter being subjudice, the management does not have adequate means to assess the same, As regards to non- provision of impairment losses for the assets of Bhiwadi and Khushkhera Units it is explained that the production at both the units is suspended, therefore the future cash flow and net realizable value have not been assessed. Therefore, there has been non-compliance of Accounting Standard AS- 28, to that extent.

Note No. 4(V) of Auditors Report:

On account of defaults and financial crises it is difficult to convince any other suitable person to join the Board of the Company.. Therefore, the Management has no option but to reappoint the retiring Directors.

Note No. 4(VI) of Auditors Report:

(a) This being technical matter, technical opinion was sought by Company and it has to be considered as continuous process plant.

(b) The property was acquired by the Company based on the valuation report of the Government approved valuer.

(c) On Account of severe financial crisis insurance policies could not be taken. However, this was communicated to the financial institutions in the past.

(d) As explained above the management is of the opinion that losses which may arise are unascertained in capital work in progress pending in the Balance Sheet.

(e) On account of continued financial crisis Preference Shares could not be redeemed on the due dates.

(f) No further information is being provided by the ARCIL after their takeover of the unit, therefore assets and liabilities are being continued as it was being shown in the earlier years.

(g) Regarding non compliance of Section 383A, it is stated that the company secretary resigned on 31st December 2008. The Company is trying its level best to appoint a company secretary but being a sick company coupled with so many legal complications, the company is not able to find a suitable candidate. However a firm of practicing company secretary has been appointed to look after the day to day legal obligations till the regular company secretary is appointed.

Note No. 4(VII) of Auditors Report:

No provision for import duty on import of raw material under advance license and duty against plant and machinery under EPCG scheme are being made as the Company is under BIFR and expecting waiver/ extension to fulfill the export obligation from Government authorities.

Regarding non-provision of pre-lease charges, interest and premium on redemption of debentures, interest on inter corporate deposit and other loans, non-provision of interest on loans and working capital facilities from various Financial Institutions and Banks including liabilities for abandoned project, demurrage and insurance charges relating to imported machinery lying at port, it Is explained hereby that since the Company has been declared sick by the Honble BIFR under the provision of SICA, 1985; these liabilities could not be adequately provided in view of any likely relief, which may be allowed by the Honble BIFR. Therefore, the Management has decided not to provide further liabilities in the Books of Accounts as mentioned above.

DIRECTORS.

Since the date of the last Annual General Meeting there has been changes in the Board of Directors of the Company Shri Bishan Dass Kaler joined the Board as Nominee Director of Honble BIFR .

Shri S. K. Anand, Director of the Company, retires by rotation and offers himself for reappointment. Shri S. K. Anand, Director of the Company is about 79 years of age. He is a retired Govt. Official and he is associated with the Company since 2002 as an independent Director.

Shri Ratanlal Parasrampuria, director of the company, retires by rotation and being eligible offers himself for reappointment. Shri Ratanlaj Parasrampuria is about 76 years of age. He is a businessman and has vast experience in the fields of business and administration. He is a promoter director of the company and is associated with the Company since 1985.

Shri Omprakash Parasrampuria, Chairman of the Company, retires by rotation and offers himself for reappointment. Shri Omprakash Parasrampuria is about 71 years of age. He is a businessman and has vast experience in the fields of business and" administration. He is a promoter director of the company and is associated with the Company since 1985.

Shri Aaloke Parasrampuria, Managing Director of the Company, retires by rotation and offers himself for reappointment. Shri Aaloke Parasrampuria is about 46 years of age. He is a businessman and has vast experience in the fields of business and administration. He is a promoter director of the company and is associated with the Company since 1985. He is Managing Director of the Company since 1993.

DIRECTORS RESPONSIBILITY STATEMENT

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

i. That in the preparation of the accounts for the financial year ended March 31, 2010 the applicable accounting standards except AS-15 AS-13. and AS-28 as to the extent as referred to in this report under the head "Auditors Report" have been followed along with proper explanations relating to material departures;

ii. That 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 at the end of the financial year and to the profit or loss of the Company for the year under review;

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

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

CORPORATE GOVERNANCE

As required under the clause 49 of the listing agreements a report on Corporate governance is provided separately in the annual report of the company and as required a certificate from the Auditors of company is annexed hereto and forms a part of this Directors Report.

PERSONNEL

The Board expresses its deep appreciation to all sections of employees in the Company for their devoted services and valuable contribution.

Harmonious industrial relations continued to prevail in the factories during the year 2009-2010.

PARTICULARS OF EMPOLYEES

There was no employee, whose remuneration was in excess of the limits prescribed under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 with respect to these matters is appended along with and forms part of this report.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their deep gratitude to the Central Government, Government of Rajasthan, Government of Madhya . Pradesh, Financial Institutions, Bankers and the shareholders for their continued co-operation and support.

For and on behalf of the Board

Place: New Delhi Omprakash Parasrampuria

Date : 12.08.2010. Chairman