Modern Syntex (India) Ltd. के निदेशक की रिपोर्ट

Mar 31, 2014

The Members,

The Directors present to you the Annual Report and Audited Statement of Accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS (Rs. in crores)

2013-14 2012-13

Net Profit / (Loss) for the year (21.89) (21.95)

2. OPERATIONS

The year under review was highly volatile for the polyester industry and witnessed extreme pressures both on top as well as bottom lines. The increase in power cost for exorbitant increase in crude oil price resulted in huge increase in cost of production. The Polyester industry in India particularly has been suffering for incessant capacity additions in past few years in a market which was already over supplied. It has put pressure on the profitability of your company too during the year under review.

During the year under review turnover of your Company is Rs. 91 crores as compared to the turnover ofRs. 385 crores in the previous year. Your company is able to reduce its net loss during the year under review despite low turnover due to POY division remained closed for full year and working of only DTY section with adverse market conditions and global recession. The net loss during the year under review is Rs. 21.89 crores compared to the net loss ofRs. 21.95 crores in the previous year. Your Company is relentlessly putting all its efforts to reduce the cost and improve the operating margins but the profit of the company is still negative. In view of accumulated losses, your directors are unable to declare any dividend for the year under review.

3. EXPORTS

The worldwide recessionary trend prevailing in the global synthetic textile market adversely affected the exports of POY/PFY from the country. Despite of high volatility in the international market spreading over the year under review, the Company has achieved exports of about Rs. 27 crores during the year under review compared to the exports ofRs. 36 crores in the previous year. Your Company is making all fee efforts to explore the new markets and improve its market position in the globe.

4. RESTRUCTURING OF DEBTS AND SANCTION OF REVIVAL SCHEME BY HON''BLE BIFR

The Company is making continuous efforts for restructuring / settlement of remaining dues. The Draft Rehabilitation Scheme submitted to the Hon''ble BIFR with copy to Operating Agency (IFCI) in February, 2013 is under examination with the Operating Agency and onward submission to Hon''ble BIFR for circulation and sanction.

5. PUBLIC FIXED DEPOSITS

In view of the petition filed by the Company, the Hon''ble Company Law Board had passed an order on 23.1.2002 that, "The repayment of Public fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of SICA". However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Hon''ble CLB for this purpose.

6. DIRECTORS

During the year under review, BIFR has withdrawn the nomination of Shri P.P. Malhotra as a Special Director of the company and nominated Shri Arun Chadha in his place as a Special Director of the Company. The Board welcomes Shri Arun Chadha and places on record its appreciation for the valuable contribution given by P.P. Malhotra during their tenure as Special Director of the Company. Shri H. L. Sharma is liable to retire by rotation and being eligible, offers himself for re-appointment.

In compliance with the provision of Section 149 and other applicable provisions of the Companies Act, 2013, Shri Niraj Rathore and Shri R. Venugopal, Directors of the Company are proposed to be appointed as Independent Directors of the Company for five consecutive years for a term upto March 31, 2019. Appropriate resolutions for the appointment/re-appointment of the aforesaid Directors are being moved at the ensuing Annual General Meeting, which the Board recommends for your approval.

7. AUDITORS

M/s. T. R. Chadha & Co., Chartered Accountants, Statutory Auditors of the Company retires at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment to audit the accounts of the Company. As required under the provision of the Section 139 of the Companies Act, 2013 the company has obtained written confirmation from M/s. T. R. Chadha & Co. that their appointment, if made, would be in conformity with the limits specified in the said section. The observations made by the Auditors are self explanatory and have been dealt with in the notes forming part of the financial statements and hence need no further clarifications.

8. INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES

Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year except the workers in the POY section created labor unrest and the company has declared lock out in its POY Divission form 15th November, 2012. There is no employee getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards read with notes on accounts have been followed along with proper explanation relating to 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 at the end of the financial year and of the profit or loss of the Company of the year under review;

(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 for detecting fraud and other irregularities;

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

10. PARTICULARS OF ENERGY CONSERVATION- TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE QVTGQ

The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as required in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 (A), 2 (B) and 2 (C) of the Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

11. CONSTITUTION OF AUDIT COMMITTEE

The Board of Directors has constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in Section 177 of the Companies Act, 2013. The present Audit Committee consists of member directors as follows:-

Shri Niraj Rathore (Independent Director) - Chairman Shri R. Venugopal (Independent Director) Shri H.L. Sharma (Non-Executive Director)

12. ACKNOWLEDGEMENTS

Yours Directors would like to express their appreciation for the assistance and co-operation received from the Financial Institutions, Government Authorities, Employees, Customers and Shareholders during the year under review. Your Directors also appreciate the dedication and efforts of executives, staff and workers of the Company.

ON BEHALF OF THE BOARD Place: Mumbai (KAMALRANKA) Date: 27th June, 2014 Chairman & Managing Director

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Mar 31, 2013

The Members,

The Directors present to you the Annual Report and Audited Statement of Accounts for the year ended 31st March, .2013.

I . FINANCIAL RESULT

(Rs. in crores)

2012-13 2011-12

Net Profit / (Loss ) for the year (21.95) (25.99)

2. QEERAHOWS

The year under review the polyester scenario continues to remain in pressure due to weak domestic textile market. This scenario has resulted into severe pressure on margins. The unprecedented increase in oil prices leading to abnormal hike in the prices of raw material viz. PTA & MEG which are based on crude oil prices. The Polyester industry in India particularly has been suffering for incessant capacity additions in past few years in a market which was already over supplied. It has put pressure on the profitability of your company too during the year under review.

During the year under review turnover of your Company is. Rs. 385 crores as compared to the turnover of Rs. 545 crores in die previous year. Your company is able to reduce its net loss during the year under review despite adverse market conditions and global recession. The net loss during the year under review is Rs. 21.95 crores compared to the net loss of Rs. 25.99 crores in the previous year Your Company is relentlessly putting all its efforts to reduce the cost and improve the operating margins but the profit of the company is still negative. In view of accumulated losses, your directors are unable to declare any dividend for the year under review.

3. EXPORTS

The worldwide recessionary trend prevailing in the global synthetic textile market adversely affected the exports of POY/PFY from the country. Despite of high volatility in the international market spreading over the year under review, the Company has achieved exports of about Rs. 36 crores during the year under review compared to the exports of Rs. 33 crores in the previous year. Your Company is making all the efforts to explore the new. markets and improve its market position in the globe.

4. RESTRUCTURING QF DEBTS AND SANCTION OF REVJYAL-SfHEME BY HQN''BLE. BIER

The Company is making continuous efforts for restructuring / sanction of settlement with remaining lenders. The Company , has also filed a Draft Revival Scheme with the Hon''ble BIFR with copy to Operating Agency and all concerning parties pursuant to 1 direction of Hon''ble BIFR on 11th December 20 L2, on the basis of audited accounts for the year ended 31st March, 2012. The IFCI as operating Agency is now examining the scheme for circulation and necessary action to sanction the same.

5. PUBLIC FIXED DEPOSITS

In view of the petition filed by the Company, the Hon''ble Company Law Board had passed an order on 23.1.2002 that, "The repayment of Public fixed deposits shall be made "by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of "SICA". However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Hon''ble CLB for this purpose.

6. QIRECIQBS

Shri H.L, Sharma is liable to retire by rotation and being eligible, offers himself for. re-appointment. During the year under review Shri R. Raniwala and Shri S.N. Sharma has resigned from the directorship of the company Shri Niraj Rathore has been '' appointed as an Additional Director of the Company and the

- Board recommends his appointment as Director liable to retire by rotation. BIFR has nominated to Shri P.P. Malhotra as special Director of the Company. He was appointed for a short period. The Board welcomes Shri Niraj Rathore and places on record its appreciation for the valuable contribution given by Shri R. 1

Raniwala, Shri P.P. Malhotra and Shri S.N. Sharma during their tenure as Directors of the Company.

7. AUDITORS

M/s. T.R. Chadha & Co:, Chartered Accountants, Mumbai retire at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment as Auditors of the Company for the'' year 2013-14. The observations made by the Auditors are self explanatory and have been dealt within the notes forming part of financial statement and hence need no further clarifications.

8. 1NPUS.TB1ALEELATIQNS & EARTICVLARS QF EMPLOYEES

Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year except the workers in the POY section created labor unrest and the company has declared lock out in its POY Division from 15th November 2012. There is no employee, getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

9. PIRECTQRS'' RESPJMS&IBILUY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, ,1956, the Board of Directors of the Company hereby state < and confirm that: -

(i) in the preparation of the annual accounts, the applicable accounting standards read with notes on accounts have been followed along with proper explanation relating to 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 at the end of the financial year and of the profit or loss of the Company of the year under review;

(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, 195,6 for safeguarding the assets of the Company and preventing and for detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts'' on a going concern basis.

10. PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE OUTGO

The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and Outgo as required in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 (A), 2(B) and 2 (C) of the Companies (Disclosures of particulars in the report of Board of Directors)

Rules, 1988 is annexed hereto and forms part of this report. *

11. CONSTITUTION OF AUDIT COMMHTTEE

The Board of Directors have constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in section 292A of the Companies Act, 1956. The present Audit Committee consists of member directors as under:- Shri H.L. Sharma (Chairman)

Shri R. Venugopal

Shri Niraj Rathore .

n, ACKNOWLEDGEMENTS

Yours Directors would like to express their appreciation for the assistance arid co-operation received from the Financial Institutions, Government authorities, employees, Customers and Shareholders during the year under review. Your Directors also appreciate the dedication and efforts of executives, staff and workers of the Company.

ON BEHALF OF THE BOARD

Place: Mumbai (KAMAL RANKA)

Date: 27th June, 2013 Chairman & Managing Director

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Mar 31, 2012

The Directors present to you the Annual Report and Audited Statement of Accounts for the year ended 31st March, 2012.

1. FINANCIAL RESULTS

(Rs. in crores)

2011-12 2010-11

Net Profit/(Loss) for the year (25.99) (8.90)

Exceptional Items - 7.03

Net Profit/(Loss) for the year after exceptional items (25.99) (1.87)

2. OPERATIONS

The above stated results reveal the critical situation under which your Company has operated during the year under review. Due to weak domestic Textile markets and the continued recessionary trend prevailing in the international Textile market, the value of finished products have been falling progressively in comparison to the cost of raw materials.

The effect of the Indian and international recession is quite visible on the Textile Sector with Polyester having been affected the most. Overall, the selling pressure has resulted in drastic decline in prices leading to huge losses for most of the Indian Polyester Industry. The Company has achieved a turnover of about Rs. 545 crores in spite of the adverse market situations in both India and internationally. Due to continuous operational losses, the Company is facing an acute shortage of working capital that has adversely impacted the profitability of the Company for the year. Production cost has increased greatly due to an increase in the raw material (PTA & MEG) prices along with increases in the power cost due to exorbitant crude oil prices. During the year under review the overall textile market has not shown any sign of improvement and Company had suffered net loss of about Rs 26 crores during the year under review compared to net loss of about Rs. 9 crores in the previous year. In view of accumulated losses, your directors are unable to declare any dividend for the year under review.

3. EXPORTS

The worldwide recessionary trend has adversely affected the exports of POY/PFY from the country. Despite the recessionary trend prevailing in the global economic market, the Company has achieved exports of about Rs 33 crores during the year under review compared to the exports of Rs 31 crores in the previous year. Your Company is making all the efforts to explore the new markets and improve its global market position.

4. RESTRUCTURING OF DEBTS AND SANCTION OF REVIVAL SCHEME BY HON'BLE BIFR

The Company is making continuous efforts to restructure/settle with the remaining lenders. The Company has also filed a Draft Revival Scheme with the Hon'ble BIFR and has sent a copy to the Operating Agency and all the concerned parties pursuant to the direction of the Hon'ble BIFR on 5th April, 2011. This has been done while declaring the Company as "Sick" on the basis of a fresh reference filed by the Company based on audited accounts for the year ended 31st March, 2010.

5. PUBLIC FIXED DEPOSITS

In view of the petition filed by the Company, the Hon'ble Company Law Board had passed an order on 23.1.2002 that "The repayment of fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of "SICA". However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Hon'ble CLB for is purpose.

6. DIRECTORS

Shri R. Venugopal is liable to retire by rotation and being eligible, offers himself for re-appointment. The appropriate resolution for the re-appointment of the aforesaid Director is being moved at the ensuing Annual General Meeting, which the Board recommends for your approval.

7. AUDITORS

M/s. T.R. Chadha & Co., Chartered Accountants, Mumbai, retire at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment as Auditors of the Company for the year 2012- 13. The observations made by the Auditors are self explanatory and have been dealt with in the notes forming part of the financial statements and hence need no further clarifications.

8. INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES Your Directors sincerely appreciate the workers, staff and officers for putting in their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year. There is no employee getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards read with notes on accounts has been followed along with proper explanation relating to 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 at the end of the financial year and of the profit or loss of the Company of the year under review;

(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 directors have prepared the annual accounts on a going concern basis.

10. PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as required in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 (A), 2 (B) and 2 (C) of the Companies (Disclosure's of particulars in the report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

11. CONSTITUTION OF AUDIT COMMITTEE

The Board of Directors has constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in section 292A of the Companies Act, 1956. The present Audit Committee consists of member directors as follows:- Shri R. Raniwala (Chairman) Shri R. Venugopal Shri H.L. Sharma

12. ACKNOWLEDGEMENTS

Yours Directors would like to express their appreciation for the assistance and co-operation received from the Financial Institutions, Banks, workers, employees, Government authorities, Customers and Shareholders during the year under review. Your Directors also appreciate the dedication and efforts of executives, staff and workers of the Company.

ON BEHALF OF THE BOARD

(KAMAL RANKA) Chairman & Managing Director

Place: Mumbai Date :25th June, 2012

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Mar 31, 2011

The Members,

The Directors present Annual Report and Audited Statement of Accounts for the year ended 31st March, 2011.

1. FINANCIAL RESULTS

(Rs. in crores)

2010-11 2009-10

Net Profit / (Loss) for the year (8.90) (20.84)

Exceptional Items 7.03 272.44

Balance brought forward from last year (472.52) (740.24)

Transferred from Debenture Redemption - 16.12

Balance carried to Balance Sheet (474.39) (472.52)

2. OPERATIONS

The year under review was highly volatile for the Polyester industry and witnessed extreme pressures both on top as well as bottom lines. The unprecedented increase in prices of PTAand MEG, the main input material coupled with the increase in power cost for exorbitant increase in crude oil price resulted in huge increase in cost of production. The Polyester industry in India particularly has been suffering for incessant capacity additions in past few years in a market which was already over supplied. It has put pressure on the profitability of your company too during the year under review. During the year under review your Company has achieved turnover of Rs. 683 crores registering about 27% increase compared to the turnover of Rs.541 crores in the previous year. Your company could achieve reduction in net loss during the year under review despite adverse market conditions and global recession. The net loss during the year under review is Rs. 8.90 crores compared to the net loss of Rs. 20.84 crores in the previous year. Your Company is relentlessly putting all its efforts to reduce the cost and improve the operating margins but the profit of the company is still negative. In absence of profits, your directors are unable to declare any dividend for the year under review.

3. EXPORTS

Your Company has achieved exports of about Rs.31 crores during the year under review compared to the exports of Rs.24 crores in the previous year despite of high volatility in the international market spreading over the year under review. The long spells of recessionary trend prevailing in global synthetic textile markets coupled with cheaper export from South East Asian countries has put extreme pressure on the prices and reduced the margins on exports to a large extent and it would still take sometime to improve. Your Company is putting in all the efforts to search for new international markets to increase its export further.

4. RESTRUCTURING OF DEBTS AND SANCTION OF REVIVAL SCHEME BY HON'BILFE BIFR

The Company is making continues efforts for settlement of dues of the secured lenders and is glad to report that 97.35 % of the lenders have approved the settlement / restructuring of their dues. This has resulted into write back of principal and interest during the year under review also and the same has been included in the exceptional items shown under financial results. The Company is making continuous efforts for restructuring / sanction of settlement with remaining lenders. The Company has also filed a Draft Revival Scheme with the Hon'ble BIFR with copy to Operating Agency and all concerning parties pursuant to direction of Hon'ble BIFR on 5th April,2011 while declaring the Company as " Sick" on the basis of fresh reference filed based on audited accounts for the year ended 31st March, 2010. The Operating Agency is now examining the Scheme for necessary action and circulation.

5. PUBLIC FIXED DEPOSITS

In view of the petition filed by the Company, the Hon'ble Company Law Board had passed an order on 23.1.2002 that the "The repayment of fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of SJCA." However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Hon'ble CLB for this purpose.

6. DIRECTORS

Shri H.L. Sharma is liable to retire by rotation and being eligible, offers himself for reappointment. During the year under review the SUUTI has withdrawn the nomination of Shri Punit Saxena as director of the Company and nominated Shri D.T. Gokhe in his place. Shri S.N. Sharma has been appointed as an Additional Director and Board has also appointed him as a Whole Time Director of the Company. The Board welcome Shri D.T. Gokhe and Shri S.N. Sharma and places on record its appreciation for the valuable contribution given by Shri Punit Saxena during his tenure as Director of the Company.

7. AUDITORS

M/s. T.R. Chadha & Co., Chartered Accountants, Mumbai retire at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment as Auditors of the Company for the year 2011-12. The observations made by the Auditors are self explanatory and have been dealt within notes vide Schedule 15 forming part of accounts and hence need no further clarifications.

8. INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES

Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year. There is no employee getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards read with notes on accounts have been followed along with proper explanation relating to 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 at the end of the financial year and of the profit or loss of the Company of the year under review;

(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 for detecting fraud and other irregularities;

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

10. PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE OUTGO

The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as required in accordance with Section 217 (l)(e) of the Companies Act, 1956 read with Rule 2 (A), 2 (B) and 2 (C) of the Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

11. CONSTITUTION OF AUDIT COMMIITTEE

The Board of Directors have constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in section 292A of the Companies Act, 1956. The present Audit Committee consists of member directors as under:-

Shri R. Raniwala, Chairman

Shri R. Venugopal

Shri H. L. Sharma

12. ACKNOWLEDGEMENTS

Yours Directors would like to express their appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government authorities, Employees, Customers and Shareholders during the year under review. Your Directors also appreciate the dedication and efforts of executives, staff and workers of the Company.

ON BEHALF OF THE BOARD

Place : Mumbai (KAMAL RANKA) Date : 17th June, 2011 Chairman & Managing Director

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Mar 31, 2010

The Directors present Annual Report and Audited Statement of Accounts for the year ended 31st March, 2010.

1. FINANCIAL RESULTS

(Rs. in crores)

2009-10 2008-09

Net Profit / (Loss) before Tax (20.84) (25.77)

Fringe Benefit Tax - 0.09

Net Profit / (Loss ) for the year (20.84) (25.86)

Exceptional Items 272.44 1.33

Balance brought forward from last year (740.24) (715.71)

Transferred from Debenture Redemption Reserve 16.12 -

Balance carried to Balance Sheet (472.52) (740.24)

2. OPERATIONS

The year under review was volatile for the Polyester Industry due to weak domestic textile market, over supply of Polyester Yarn compared to the over all demand, unprecedented increase in oil prices leading to abnormal hike in the prices of raw material viz.PTA & MEG which are based on crude oil prices, which had gone from USD 47 to USD 85 per barrel internationally.! High input cost like power continued to put pressure on the production cost. Unfortunately there was no relief in the budget for adjustment / refund of CENVAT. Because of this there has been accumulation of CENVAT to the extent of about Rs.29 crores as on 31/3/2010. This has created pressure on the cash flow of the Company and resulted into acute shortage of working capital. During the year under review the turnover was Rs.541 crores which is marginally lower against turnover of Rs.557 crores during the previous year despite adverse market situations and global recession. Net loss has been reduced from Rs.25.77 crores to Rs.20.84 crores during the year under review. The Company may be able to improve the profitability in view of cost cutting measures and improving efficiency in manufacturing areas. The Company has implemented debottlenecking programme to increase the production capacity of polymer which is now about 86400 TPA. In absence of profits your Directors are unable to declare any divided for the year under review.

3. EXPORTS

Textile exports have been hit due to recessionary trend prevailing in the global synthetic textile market. However the Company has been able to achieve the exports of about Rs.24 crores during the year under review as against exports of Rs.23 crores in the previous year. The Company is making all efforts to explore the new markets and improve its market position in the globe.

4. FUTURE PROSPECTS

The potential of Indian textile sector continues to be high indicating strong demand in favour of India. Global and Domestic Polyester Industry is optimistic for growth due to price competitiveness of Polyester vis-a-vis other substitutes like cotton, silk and woolen yarns and shifting of manufacturing base to low cost countries like India and China. PFY will grow with an expected CAGR of 8% over 2008-09 to 2013-14. Higher allocation of funds by Govt, of India in the budget for TUFS will help in expansion and modernization initiatives. An extensive skill development programme in textile and garment sector in association with the textile ministry to train 30 Lac persons over 5 years will meet the rising demand of skilled manpower in the textile industry. However the pressure on margins is expected to continue due to continuous rise in oil prices. Your Directors continue to remain optimistic on future outlook of Polyester Industry in India.

5. RESTRUCTURING OF DEBTS AND SANCTION OF REVIVAL SCHEME BY BIFR

The Company has been able to settle with 95.2% of secured lenders leading to reduction in interest cost, write back of principal / interest which have been included in the exceptional items shown in the financial results during the year under review. The Company has also filed a Draft Revival Scheme with the Honble BIFR with copy to Operating Agency and all concerning parties. The Scheme has been examined by IFCI as Operating Agency. The Honble BIFR is now examining the Scheme for circulation and necessary action to sanction the same. IFCI in consent with the Company sold the closed units viz. Yarn & Suitings divisions of the Company under section 13(4) of Sarfaesi. Sale proceeds of the same have been utilized for payment of the dues of the secured creditors. All secured creditors of closed units stand settled.

6. PUBLIC FIXED DEPOSITS

In view of the petition filed by the Company, the Honble Company Law Board had passed an order on 21/12/2001 that the "The repayment of fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of "SICA". However payments on compassionate grounds are being made as per the decision of the committee formed by Honble CLB for this purpose.

7. DIRECTORS

Shri R. Raniwala is liable to retire by rotation and being eligible, offers himself for reappointment. During the year under review, Shri P.D. Rathi has resigned from the directorship of the company. IFCI Ltd. has withdrawn the nomination of Shri R. Parthasarathy as director of the Company and nominated Smt. Rashmi Sachdev in his place and subsequently has withdrawn her nomination also from directorship of the Company. LIC has withdrawn nomination of Shri R. Venugopal and nominated Shri Amit Yadav in his place as Director of the Company. Shri R. Venugopal has been subsequently appointed as an Independent Director of the Company and the Board recommends his appointment as Director liable to retire by rotation. The Board welcomes Shri Amit Yadav and places on record its appreciation for the valuable contribution given by Shri P.D. Rathi, Shri R. Parthasarathy and Smt. Rashmi Sachdev during their tenure as Directors of the Company.

8. AUDITORS

M/s. T.R. Chadha & Co., Chartered Accountants, Mumbai retire at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment as Auditors of the Company for the year 2010-11. The observations made by the Auditors are self explanatory and have been dealt within notes vide Schedule 15 forming part of accounts and hence need no further clarifications.

9. INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES

Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year. There is no employee getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended.

10. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards read with notes on accounts have been followed along with proper explanation relating to 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 at the end of the financial year and of the profit or loss of the Company for the year under review;

(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 Directors have prepared the annual accounts on a going concern basis.

11. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as required in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 (A), 2 (B) and 2 (C) of the Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

12. CONSTITUTION OF AUDIT COMMIITTEE

The Board of Directors have constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in section 292 A of the Companies Act, 1956. The present Audit Committee consists of member directors as under:-

Shri R. Raniwala, Chairman

Shri R. Venugopal

Shri H. L. Sharma

13. ACKNOWLEDGEMENTS

The Board places on record its sincere thanks and gratitude for the assistance and continued co-operation that the Company has been receiving from Financial Institutions, banks, workers, employees, Central as well as State Government. Your Directors also appreciate the dedication and efforts of executives, staff and workers of the Company.

ON BEHALF OF THE BOARD

Place : Mumbai (KAMAL RANKA)

Date : June 18, 2010 Chairman & Managing Director