Directors Report of Goldwon Textiles Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 22nd Annual Report on the business and operations of the company and the accounts for the financial year ended March 31, 2015

FINANCIAL RESULTS:

Particulars 2014-15 2013-14

Total Revenue - -

Profit/(Loss) before Interest & Depreciation (119,400) (3483081)

Less: Interest and Depreciation

Profit/(Loss)Afler Depreciation & Tax (119,400) (3483081)

Profit/(Loss) before Tax (119,400) (3483081)

Less: Tax -

Net (Loss) (119,400) (3483081)

Deficit Carried to Balance Sheet (119,400) (3483081)

Review of Operations and State of Company's affairs

During the period under review, the Company have made a Net Turnover of Rs. NIL and posted a Loss of Rs.l 19,400/- compared to previous year loss of Rs. 3,483,081/-

Operations Review

As you are aware that the Assets of unit have been auctioned by the both the secured creditors and all the liabilities included secured and unsecured have fully discharged and has no liabilities whatsoever it on the unit. In order to turn the operations of the unit profitably the Directors are in touch with overseas buyers to supply a product mix including Comfort, Travel, Support, Running, and Jogging, walking Knitted Socks by sourcing from Bangladesh and China in addition to local markets. The Company is also examining to export Coolmax, a specialized cotton and Lycra and confident of taking forward.

Amount transferred to reserves:

No Amount has been proposed to transfer to Reserves.

Proposed Dividend:

No Dividend has been proposed (recommended) during the current year.

Particulars of Technology ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information required under section 134 of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the report of Board of Directors) rules. 1988 is as follows:

Technology Absorption : N.A

Foreign Exchange earnings : Nil

Foreign Exchange Outgo : Nil

Number of Meetings of the Board held during the financial year ended 31st March 2015. During the period from April 1, 2014 to March 31, 2015, Board Meetings were held on 16.08.2014, 26.10.2014, 02.12.2014, 30.04.2015, 06.08.2015

The Company has not invited/accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 during the Financial Year ended 31st March, 2015.

Issue of Equity Shares with Differential Rights, Sweat Equity, ESOS, etc.

The Company is having only Equity Shares and no any other types of Shares.

Disclosure in respect of voting rights not exercised directly by the employees in respect of company's (share capital & shares to which the scheme debenture) rules relates

No any shares exercised by the employees in the company.

Particulars of Loans, Guarantees or Investments under Section 186

The company does not have any Loans, Guarantees or Investments which are required to be reported under Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Particulars of Contracts or Arrangements with Related Parties Referred to in Sub- Section (1) of Section 188

During the year there are no contracts or arrangements with related parties referred to in Sub Section (1) of section 188 of Companies Act, 2013 which are required to be reported in the director's report under section 188 of Companies Act, 2013.

Details of Directors or Key Managerial Personnel who were appointed or have resigned during the Year

During the year no Directors or Key Managerial Personnel have been appointed or have resigned.

Directors Responsibility Statement under Section 134 of the Companies Act, 2013 Pursuant to the requirement under Section 134 of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms:

1) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures:

2) 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 slate of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

3) That the Directors had 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;

4) 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.

Explanations or Comments:

No any observations

Name of the Companies which have become ceased to be 2014:

Not Applicable.

Details in respect of adequacy of Internal Financial Controls:

The Company is having the adequate Internal Financial Controls

Separate section containing a report on performance and subsidiaries, associates & JVs included in the Consolidated FS of the Co:

Not Applicable.

Disclosures under sexual harassment of women at work place (Prevention, Prohibition and Redressal Act, 2013)

NIL.

Statutory Auditors:

M/s C. Ramachandram & Co. Chartered Accountants FRN: 002864S. Hyderabad was appointed for five years up to 27th Annual General Meeting subject to ratification by the members for re-appointment at the Annual General Meeting.

The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.

Auditors Report

M/s. C. Ramachandram & Co. Chartered Accountants (ICAI Regn. No.002864S) have issued Auditors Report for the Financial Year ended 31st March, 2015 and there are no qualifications in Auditors' Report.

The names of companies which have become or ceased to be Company's Subsidiaries, joint ventures or associate companies during the year

During the Financial Year, no company is ceased as Company's Subsidiary, joint venture or associate company.

Material Changes and Commitments

The company does not have any operations.

Energy Conservation:

Not Applicable

Development and Implementation of Risk Management:

Not Applicable

Change in the nature of business

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

Details of Significant Orders Passed by the regulators, courts, and tribunal:

No any orders passed by any courts.

Acknowledgement

Your Directors also thank the Shareholders, Suppliers, Service Providers, Consultants and other Stakeholders for the confidence reposed in your Company and their continued patronage.

BY THE ORDER OF THE BOARD For Goldwon Textiles Limited

For and on behalf of the board

Place: Hyderabad S.S.R.KISHEN Date: 17.08.2015 Chairman and Managing Director DIN:01061990

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Mar 31, 2014

Dear Members,

The Directors are pleased to present the 21st Annual Report together with the audited Balance Sheet, Statement of Profit and Loss and Auditors'' Report for the year ended 31st March 2014.

FINANCIAL RESULTS:

PARTICULARS 2013-2014 2012-2013 Rs.In Lakhs Rs.In Lakhs

Other Income NIL NIL (Interest on Term Loan Written back)

Total Expenditure 34.83 1.2

Gross Profit before interest and (34.83) (1.2)

Depreciation

Depreciation NIL NIL

Net Loss (34.83) (1.2)

Financial Review

As there was no business done during the year, there was no income from the operations. Operations Review

As you are kindly aware that our unit has been established for the production of Knitted Socks with an annual installed capacity of 5.00 Lakh Decca pairs per annum with a product mix including Comfort, Travel, Support, Running. Jogging, walking or simply trotting to meet the needs of people with lifestyle-related afflictions. The Knitted Socks Products are manufactured with Korean State-of-Art Technology to meet the worldwide requirement. The Machinery employed is imported from renowned Manufacturers of Korea. The net-worth was eroded and consequently it was declared a sick industrial company by the Hon''ble Board for Industrial and Financial Reconstruction (for short ''BIFR'') u/s 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 20.02.2001 in Reference Case No222/2000. The unit is not operational since May 2002 for want of Working Capital support.

Revival Efforts

Your Directors succeeded in concluding Private Treaty under SARFCEI Act as provided under Rule 6(1) (d) and 8(5) (d) of the Security Interest (Enforcement) Rule 2002 Pursuant of the completion of the transaction envisaged under reached Memorandum of Agreement (MOA) with both the Debt Assignment holders on 06.12.2013.

IARC being the one of Debt Assignment holders had issued a No Due Certificate and released the Company as well Original Guarantors from all the liabilities on 24.03.2014 and filed Memorandum of Satisfaction of Mortgage under Sec 140 of the Company Act 1956 and filed prescribed Form 17 on 27.03.2014 with the ROC, Hyderabad.

Similarly. ASREC (India) Ltd , the other the one of Debt Assignment holder had issued a letter on 26.03.2014 discharging the Company as well Guarantors from the all the liabilities and filed Memorandum of Satisfaction of Mortgage under Sec 140 of the Company Act 1956 and filed prescribed Form 17 on 26.03.2014 with the ROC, Hyderabad.

Your Directors are extremely grateful to all the Stakeholders for their continued support during this difficult period of the journey. Now your company is fully on path of the recovery and better prosperity.

Future Prospects

The demand for the socks has been increasing gradually for the last few decades particularly in India and other developing countries. The largest consumer of socks is the Europeans and Western countries who have been using this item as part of their dresses for a very long period. The European and Western countries have been producing socks, from where these items used to be imported into India and other countries. The socks industry has a very bright future as its demand both in India and abroad has increased substantially. In fact, the Hosiery Knitwear Sector is zooming with the new EXIM Policy and increase in demand from US markets. The Vision Statement has projected an increase in the size of the industry from USD 36 billion in 2002 to USD 100 billion by 2016. In view of this, the Company is confident of serving new markets with higher profitability on its revival.

Appointment of Independent Director:

In view of the sudden demise of Shri. G. Amar Singh Rathod, on 10.12.2103 Smt. Deepti Gupta has been appointed as an Independent Director on 21.01.2014.

Public Deposits

Your Company has not accepted deposits from the public during the year under review and there are no outstanding deposits as on 31st March 2014

Personnel

There are no employees drawing remuneration as provided in section 217 (2A) of the Companies Act, 1956 whose particulars forming part of this report is to be annexed.

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Audit Committee

The Audit committee consists of two independent Directors viz., Sri. Amar Singh Rathod till his demise. Smt. Deepti Gupta appointed in his place and Sri. Neelam Sri Ramulu. The Audit committee met four times during the year and recommended the accounts for approval by the Board.

Directors'' Responsibility Statement

The Directors confirm:

I) That in the preparation of the accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed along with proper explanation relating to material departure:

2) 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 of the loss of the company for the year under review.

3) 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March 2014 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01 and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance

The report on Corporate Governance is enclosed as an Annexure to this report.

Acknowledgements

Your Directors wish to place on record the appreciation for the valuable support and guidance rendered by Sri. Amar Singh Rathod as an Independent Director and cooperation extended by IARC and ASREC(India) Ltd and other Central and State Government Agencies. Your directors also wish to place on record their sincere appreciation to the shareholders for their continued confidence, patronage and support to the management of the Company.

For and on behalf of the board

Place: Hyderabad S.S.R.KISHEN Date: 14.08.2014 Chairman and Managing Director

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Mar 31, 2012

Dear Members,

The Directors are pleased to present the 19th Annual Report together with the audited Balance Sheet, Profit and Loss Account and Auditors Report for the year ended 31st March 2012.

FINANCIAL RESULTS

Rs. In Lakhs

2011-2012 2010-11

Other Income NIL NIL

(Interest on Term Loan Written back)

Total Expenditure 0.61 0.27

Gross Profit before interest And depreciation (0.61) (0.27)

Depreciation NIL NIL

Net Loss (0.61) (0.27)

Financial Review

As there was no new business done during the year, there was no income from the operations.

Operations Review

As you are kindly aware that the Knitted Socks meet the basic necessities of all ages and the income strata is Knitted Socks. Socio-economic changes and fashion awareness amongst the masses have brought in a sea change in the living styles in India. The use of socks by the armed forces fighting in high altitude and in adverse climatic conditions has now been finding its ways among executives and school children. Wearing of any kind of shoes without socks is termed as incomplete. Our unit has been established for the production of Knitted Socks with an annual installed capacity of 5.00 lakh Decca pairs per annum with a product mix including Comfort, Travel, Support, Running, Jogging, walking or simply trotting to meet the needs of people with lifestyle-related afflictions. The Knitted Socks Products are manufactured with Korean State-of-Art Technology to meet the worldwide requirement. The Machinery employed is imported from renowned Manufacturers of Korea. The net-worth was eroded and consequently it was declared a sick industrial company by the Honble Board for Industrial and Financial Reconstruction (for short BIFR) u/s 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 20.02.2001 in Reference Case No222/2000. In the said proceedings, SBH was originally appointed as the Operating Agency (OA) u/s 17(3) of SICA. However, the Honble Board after having satisfied that the OA had acted with a biased attitude appointed BOB on 4.3.2003 as the OA u/s.17 (3) of the Act to review and formulate the revised DRS of the Company. The unit is not operational since May 2002 for want of Working Capital support.

Revival Efforts

Your Directors succeeded in identifying a potential Investor for infusion of funds to revive the unit with buy back arrangement of the entire production. The Company is having two Secured creditors being Bank of Baroda and State Bank of Hyderabad The Company had also reached a compromised OTS with Bank of Baroda on 03.09.2007 towards full & final settlement of dues and had arranged down payment of Rs.30 Lakhs on 09.06.2008. The Company had also reached a compromised OTS with Assignment holders of State Bank of Hyderabad and issues related to the Charged Documents are yet to be settled. The investors as they are keen to revive the unit and have called on both IARC and ASREC along with the MD of the Company and requested to sort out the issues related to the Charged Documents. They were also appraised on the present political agitated situation on Telangana and the proposal of One Time Settlement is under the consideration by them. Meanwhile IARC had invoked the SARFACEI Act and the Honble AAIFR had passed orders that are arbitrary, illegal and contrary to the provisions of the SICA as amended by the SARFAESI Act. Aggrieved by these illegal acts, the Company had filed a Writ Petition before the Honble AP High Court to set aside the same and restore the reference to the BIFR and the same was stayed.

Future Prospects

The demand for the socks has been increasing gradually for the last few decades particularly in India and other developing countries. The largest consumer of socks is the Europeans and Western countries who have been using this item as part of their dresses for a very long period. The European and Western countries have been producing socks, from where these items used to be imported into India and other countries. The socks industry has a very bright future as its demand both in India and abroad has increased substantially. In fact, the Hosiery Knitwear Sector is zooming with the new EXIM Policy and increase in demand from US markets. The Vision Statement has projected an increase in the size of the industry from USD 36 billion in 2002 to USD 100 billion by 2012 and that exports will reach a level of at least USD 50 billion by 2010. The increases in exports and the size of the industry are projected to boost employment opportunities in the industry and provide 12 million additional jobs. In view of this the Company is confident of serving new markets with higher profitability on its revival

Public Deposits:

Your Company has not accepted deposits from the public during the year under review and there are no outstanding deposits as on 31st March 2012.

Personnel:

There are no employees drawing remuneration as provided in section 217 (2A) of the Companies Act, 1956 whose particulars forming part of this report is to be annexed.

Directors:

Sri. S. Rahmatullah had resigned in August 2012 due to personal reasons and in his place Shri Neelam Sri Ramulu is appointed by resolution of the directors at the Board Meeting held on today i.e. 14thAugust.2012. Shri Neelam Sri Ramulu is an Electrical Engineer with more than 30 years experience in the Industrial Engineering and possesses relevant expertise and experience;. The said resignation of Sri S Rahmatullah and the appointment of Shri Neelam Sri Ramulu are being notified to the ROC, Hyderabad. The Board of Directors are acknowledging and expressing their appreciation for Sri S Rahmatullahs contributions during his tenure on the Company's Board of Directors while welcoming Shri Neelam Sri Ramulu as an Independent Director in his place.

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Audit Committee

The Audit committee consists of two independent Directors viz., Sri. AMAR SINGH RATHOD, Sri. And S. Rahmatullah. The Audit committee met four times during the year and recommended the accounts for approval by the Board.

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:

1) That in the preparation of the accounts for the financial year ended 31st March, 2012 the applicable accounting standards have been followed along with proper explanation relating to material departure;

2) 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 of the loss of the company for the year under review.

3) 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March 2012 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01 and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange:

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance:

The report on Corporate Governance is enclosed as an Annexure to this report.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and cooperation extended by State Bank of Hyderabad, Bank of Baroda and other Central and State Government Agencies. Your directors also wish to place on record their sincere appreciation to the shareholders for their continued confidence, patronage and support to the management of the Company.

For and on behalf of the board

Place: Hyderabad S.S.R.KISHEN

Date: 14.08.2012 Chairman and Managing Director

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Mar 31, 2011

Dear Members,

The Directors are pleased to present the 18th Annual Report together with the audited Balance Sheet, Profit and Loss Account and Auditors? Report for the year ended 31st March 2011.

FINANCIAL RESULTS

Rs. In Lakhs

2010-2011 2009-10

Other Income NIL NIL (Interest on Term Loan Written back)

Total Expenditure 0.27 0.25

Gross Profit before interest and depreciation (0.27) (0.25)

Depreciation NIL NIL

Net Loss (0.27) (0.25)

Financial Review

As there was no new business done during the year, there was no income from the operations.

Operations Review

As you are kindly aware that the Knitted Socks meet the basic necessities of all ages and the income strata is Knitted Socks. Socio-economic changes and fashion awareness amongst the masses have brought in a sea change in the living styles in India. The use of socks by the armed forces fighting in high altitude and in adverse climatic conditions has now been finding its ways among executives and school children. Wearing of any kind of shoes without socks is termed as incomplete. Our unit has been established for the production of Knitted Socks with an annual installed capacity of 5.00 lakh Decca pairs per annum with a product mix including Comfort, Travel, Support, Running, Jogging, walking or simply trotting to meet the needs of people with lifestyle-related afflictions. The Knitted Socks Products are manufactured with Korean State-of-Art Technology to meet the worldwide requirement. The Machinery employed is imported from renowned Manufacturers of Korea. The net-worth was eroded and consequently it was declared a sick industrial company by the Hon?ble Board for Industrial and Financial Reconstruction (for short „BIFR?) u/s 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 20.02.2001 in Reference Case No222/2000. In the said proceedings, SBH was originally appointed as the Operating Agency (OA) u/s 17(3) of SICA. However, the Hon?ble Board after having satisfied that the OA had acted with a biased attitude appointed BOB on 4.3.2003 as the OA u/s. 17 (3) of the Act to review and formulate the revised DRS of the Company. The unit is not operational since May 2002 for want of Working Capital support.

Revival Efforts

Your Directors succeeded in identifying a potential Investor for infusion of funds to revive the unit with buy back arrangement of the entire production. The Company is having two Secured creditors being Bank of Baroda and State Bank of Hyderabad. The Company had also reached a compromised OTS with Bank of Baroda on 03.09.2007 towards full & final settlement of dues and had arranged down payment of Rs.30 Lakhs on 09.06.2008. The Company had also reached a compromised OTS with Assignment holders of State Bank of Hyderabad. The investors as they are keen to revive the unit and have called on both IARC and ASREC along with the MD of the Company and requested to sort out the issues related to the Charged Documents. They were appraised on the present political agitated situation on Telengana and no new investment is taking place in this sector as no body is willing to lock-up funds and wait for protracted legal battle and are fully confident to resolve the pending issues and shortly revive the operations. Pending finalization of issue of charged documents no interest was provided on principal outstanding loans for the year under review.

Future Prospects

The demand for the socks has been increasing gradually for the last few decades particularly in India and other developing countries. The largest consumer of socks is the Europeans and Western countries who have been using this item as part of their dresses for a very long period. The European and Western countries have been producing socks, from where these items used to be imported into India and other countries. The socks industry has a very bright future as its demand both in India and abroad has increased substantially. In fact, the Hosiery Knitwear Sector is zooming with the new EXIM Policy and increase in demand from US markets. The Vision Statement has projected an increase in the size of the industry from USD 36 billion in 2002 to USD 85 billion by 2010 and that exports will reach a level of at least USD 40 billion by 2010. The increases in exports and the size of the industry are projected to boost employment opportunities in the industry and provide 12 million additional jobs. In view of this the Company is confident of serving new markets with higher profitability on its revival

Public Deposits:

Your Company has not accepted deposits from the public during the year under review and there are no outstanding deposits as on 31st March 2011.

Personnel:

There are no employees drawing remuneration as provided in section 217 (2A) of the Companies Act, 1956 whose particulars forming part of this report is to be annexed.

Directors:

Sri. S. Rahmatullah who retires by rotation at the ensuing Annual general Meeting and being eligible, offer himself for re-appointment

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Audit Committee

The Audit committee consists of two independent Directors viz., Sri. S. RAHMATULLA and Sri. AMAR SINGH RATHOD and Sri. S.S.R. Kishen. The Audit committee met four times during the year and recommended the accounts for approval by the Board.

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:

1) That in the preparation of the accounts for the financial year ended 31st March, 2011 the applicable accounting standards have been followed along with proper explanation relating to material departure;

2) 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 of the loss of the company for the year under review.

3) 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March 2011 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01 and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange:

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance:

The report on Corporate Governance is enclosed as an Annexure to this report.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and cooperation extended by State Bank of Hyderabad, Bank of Baroda and other Central and State Government Agencies. Your directors also wish to place on record their sincere appreciation to the shareholders for their continued confidence, patronage and support to the management of the Company.

For and on behalf of the board

HYDERABAD S.S.R.KISHEN

Date: 17th Aug 11 Chairman and Managing Director

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Mar 31, 2010

The Directors are pleased to present the 17th Annual Report together with the audited Balance Sheet, Profit and Loss Account and Auditors Report for the year ended 31st March 2010.

FINANCIAL RESULTS

Rs. In Lakhs

2009-10 2008-09

Other Income NIL NIL (Interest on Term Loan Written back)

Total Expenditure 0.25 0.32 Gross Profit before interest

And depreciation (0.25) (0.32)

Depreciation NIL NIL

Net Loss (0.25) (0.32)

Financial Review As there was no new business done during the year, there was no income from the operations.

Operations Review

As you are aware that the unit has been established for the production of Knitted Socks with an annual installed capacity of 5.00 lakh Decca pairs per annum with a product mix including Comfort, Travel, Support, Running, Jogging, walking or simply trotting to meet the needs of people with lifestyle-related afflictions. The Knitted Socks Products are manufactured with Korean State-of-Art Technology to meet the worldwide requirement. The Machinery employed is imported from renowned Manufacturers of Korea. The net-worth was eroded and consequently it was declared a sick industrial company by the Honble Board for Industrial and Financial Reconstruction (for short ‘BIFR) u/s 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 20.02.2001 in Reference Case No222/2000. In the said proceedings, SBH was originally appointed as the Operating Agency (OA) u/s 17(3) of SICA. However, the Honble Board after having satisfied that the OA had acted with a biased attitude appointed BOB on 4.3.2003 as the OA u/s.17 (3) of the Act to review and formulate the revised DRS of the Company. The unit is not operational since May 2002 for want of Working Capital support.

Revival Efforts

During the year under review, succeeded in identifying a potential Investor for infusion of funds to revive the unit with buy back arrangement of the entire production. The Company is having two Secured creditors being Bank of Baroda and State Bank of Hyderabad. On the confirmation of Assignment of Debit by SBH in favour of ASREC (India) Ltd (ASREC), the Company had reached an OTS with Deutsche Bank being the Attorney holder of ASREC (India) Ltd on 02.03.2007 for full & final settlement of dues. The Company had also reached a compromised OTS with Bank of Baroda on 03.09.2007 towards full & final settlement of dues. Thereafter, the State Bank of Hyderabad had confirmed to the Honble BIFR in the hearing held on 02.09.2008 that the security is still with them. While that being so, the Company to show its seriousness had arranged down payment of Rs.30 Lakhs on 09.06.2008 to BOB and was unable to pay the OTS amount to Deutsche Bank as the issue of charged documents between SBH and Deutsche Bank /ARSEC (India) Ltd could not be sorted which was one of the pre-conditions for the strategic investor to invest into the company. The Company had submitted a Comprehensive Revival Scheme on 12.06.2008 to the Honble BIFR and BOB for approval considering OTS reached with both the Secured

Creditors and keeping in view of the cost for recondition, imported spares and need based working capital with the infusion of funds since tied-up with a Strategic Investor to revive the unit. In the mean time Bank of Baroda had made a Portfolio Sale to IARC. The investors as they are keen to revive the unit and have called on both IARC and ASREC along with the MD of the Company on 22.04.2010 and requested to sort out the issues related to the Charged Documents. They were appraised on the present political agitated situation on Telengana and no new investment is taking place in this sector as no body is willing to lock- up funds and wait for protracted legal battle as permission by the BIFR was made available to the secured creditors to pursue its recovery suits. This being considered favorably and with Honble AAIFR and stayed the impugned order of BIFR your Directors are fully confident to resolve the pending issues and shortly revive the operations. Pending finalization of issue of charged documents no interest was provided on principal outstanding loans for the year under review.

Future Prospects

In our revival efforts new three distinct market niches - (1) Outdoor wear; (2) Dress & Casual wear (3) Health wear have been identified where the Company will be able to serve the ever growing diabetes and other patients. In fact, the Hosiery Knitwear Sector is zooming with the new EXIM Policy and increase in demand from US markets. The Vision Statement has projected an increase in the size of the industry from USD 36 billion in 2002 to USD 85 billion by 2010 and that exports will reach a level of at least USD 40 billion by 2010. The increases in exports and the size of the industry are projected to boost employment opportunities in the industry and provide 12 million additional jobs. In view of this the Company is confident of serving new markets with higher profitability on its revival

Public Deposits:

Your Company has not accepted deposits from the public during the year under review and there are no outstanding deposits as on 31st March 2010.

Personnel:

There are no employees drawing remuneration as provided in section 217 (2A) of the Companies Act, 1956 whose particulars forming part of this report is to be annexed.

Directors:

Sri. Amar Singh Rathod who retires by rotation at the ensuing Annual general Meeting and being eligible, offer himself for re-appointment

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Audit Committee

The Audit committee consists of two independent Directors viz., Sri. S. RAHMATULLA and Sri. AMAR SINGH RATHOD and Sri. S.S.R. Kishen. The Audit committee met four times during the year and recommended the accounts for approval by the Board.

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:

1) That in the preparation of the accounts for the financial year ended 31st March, 2010 the applicable accounting standards have been followed along with proper explanation relating to material departure;

2) 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 of the loss of the company for the year under review.

3) 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01 and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange:

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance:

The report on Corporate Governance is enclosed as an Annexure to this report.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and cooperation extended by State Bank of Hyderabad, Bank of Baroda and other Central and State Government Agencies. Your directors also wish to place on record their sincere appreciation to the shareholders for their continued confidence, patronage and support to the management of the Company.

For and on behalf of the board

HYDERABAD S.S.R.KISHEN Date: 17th Aug 10 Chairman and Managing Director

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Mar 31, 2009

The Directors are pleased to present the 16th Annual Report together with the audited Balance Sheet, Profit and Loss Account and Auditors Report for the year ended 31st March 2009.

FINANCIAL RESULTS

Rs. In Lakhs

2008-09 2007-08

Other Income NIL NIL (Interest on Term Loan Written back)

Total Expenditure 0.32 0.01 Gross Profit before interest

And depreciation (0.32) (0.01)

Depreciation NIL NIL

Net Profit (0.01) (0.01)

Financial Review

As there was no new business done during the year, there was no income from the operations.

Operations Review

As you are aware that the Company was established a fully integrated 100% Export Oriented Unit for Manufacturing and export of Knitted Socks in the year 1996 at Sy.No 248 (P) Poppalguda village, Rajendranagar Mandal, Ranga Reddy District, Andhra Pradesh in technical collaboration with M/s Jungwon Corporation, Korea after obtaining change in Land Use from the Government of Andhra Pradesh for Ac 1.02 Guntas. The Company had commenced its commercial production on 01.07.1996 after executing Security Bond with Customs & Central Excise department. The Company had availed Foreign Currency Loan (FCL) from State Bank of India. State Bank of Hyderabad (SBH) and Bank of Baroda (BOB) are Secured Creditors of the Company. The said FCL was secured by Deferred Payment Guarantee given by SBH and counter Guarantee by BOB and Joint Deed of Hypothecation by the company.

The net-worth was eroded and consequently it was declared a sick industrial company by the Honble Board for Industrial and Financial Reconstruction (for short BIFR) u/s 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 20.02.2001 in Reference Case No222/2000. In the said proceedings, SBH was originally appointed as the Operating Agency (OA) u/s 17(3) of SICA. However, the Honble Board after having satisfied that the OA had acted with a biased attitude appointed DOB on 4.3.2003 as the OA u/s.17 (3) of the Act to review and formulate the revised DRS of the Company. The Honble BIFR declared the Company as a sick unit in 2000-01 under Case No.222/2000. The unit is not operational since May 2002.

Revival Efforts

In the revival efforts the Board of Directors of your Company have been exploring new opportunities with Strategic Partnership arrangements and have succeeded in identifying a potential Investor for infusion of funds to revive the unit and buy back the production of the unit. On the confirmation of Assignment of Debit by SBH in favour of ASREC (India) Ltd (ASREC), the Company had reached an OTS with Deutsche Bank being the Attorney holder of ASREC (India) Ltd on 02.03.2007 for full & final settlement of dues. The Company had also reached a compromised OTS with Bank of Baroda on 03.09.2007 towards full & final settlement of dues. Thereafter, the State Bank of Hyderabad had confirmed to the Honble BIFR in the hearing held on 02.09.2008 that the security is still with them. While that being so, the Company to show its seriousness had arranged down payment of Rs.30 Lakhs on 09.06.2008 to BOB and was unable to pay the OTS amount to Deutsche Bank as the issue of charged documents between SBH and Deutsche Bank /ARSEC (India) Ltd could not be sorted which was one of the pre-conditions for the strategic investor to invest into the company. The Company had submitted a Comprehensive Revival Scheme on 12.06.2008 to the Honble BIFR and BOB for approval considering OTS reached with both the Secured Creditors and keeping in view of the cost for recondition, imported spares and need based working capital with the infusion of funds since tied-up with a Strategic Investor to revive the unit.

Pending fmalization of issue of charged documents between SBH and Deutsche Bank /ARSEC (India) Ltd no interest was provided on principal outstanding loans for the year under review. BOB being the Operating is in the process of sorting-out the pending issues with SBH and Deutsche Bank /ARSEC (India) Ltd and once the OTS amounts and other dues are paid, the Net-Worth of the Company would become positive.

Future Prospects

In our revival efforts new three distinct market niches - (1) Outdoor wear; (2) Dress & Casual wear (3) Health wear have been identified where the Company will be able to serve the ever growing diabetes and other patients. In fact, the Hosiery Knitwear Sector is zooming with the new EXIM Policy and increase in demand from US markets. The Vision Statement has projected an increase in the size of the industry from USD 36 billion in 2002 to USD 85 billion by 2010 and that exports will reach a level of at least USD 40 billion by 2010. The increases in exports and the size of the industry are projected to boost employment opportunities in the industry and provide

Or

12 million additional jobs. In view of this the Company is confident of serving new markets with higher profitability on its revival

Public Deposits:

Your Company has not accepted deposits from the public during the year under review and there are no outstanding deposits as on 31st March, 2009.

Personnel:

There are no employees drawing a remuneration as provided in section 217 (2A) of the Companies Act, 1956 whose particulars forming part of this report is to be annexed.

Directors:

Sri. S Rehamtulla who retires by rotation at the ensuing Annual general Meeting and being eligible, offer himself for re-appointment

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

Audit Committee

The Audit committee consists of two independent Directors viz., Sri. S. RAHMATULLA and Sri. AMAR SINGH RATHOD and Sri. S.S.R. Kishen. The Audit committee met four times during the year and recommended the accounts for approval by the Board.

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:

1) That in the preparation of the accounts for the financial year ended 31st March, 2009 the applicable accounting standards have been followed along with proper explanation relating to material departure;

2) 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 of the profit or loss of the company for the year under review.

3) 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March 2009 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01 and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange:

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance:

The report on Corporate Governance is enclosed as an Annexure to this report.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and cooperation extended by State Bank of Hyderabad, Bank of Baroda and other Central and State Government Agencies. Your directors also wish to place on record their sincere appreciation to the shareholders for their continued confidence, patronage and support to the management of the Company.

For and on behalf of the board

HYDERABAD S.S.R.KISHEN

Date: 17th Aug 09 Chairman and Managing Director