Directors Report of Khatau Makanji Spinning & Weaving Company Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present the One Hundred Thirty Ninth Annual Report and Audited Statement of Accounts of your Company for the year ended 31st March, 2014.

FINANCIAL RESULTS:

For the Year ended For the Year ended 31-03-2014 31-03-2013 Amt(Rs) Amt(Rs)

Profit (Loss) for the period before interest, 56,37,708 96,24,456

depreciation and taxation

Less: Interest - -

Depreciation 17,00,924 18,87,947

Taxation - -

Profit / (Loss) after interest, 39,36,784 77,36,509

depreciation and taxation

Deficit brought forward from the previous year (224,44,02,095) (225,21,38,604)

Total deficit carried to Balance Sheet (224,04,65,311) (224,44,02,095)

DIVIDENDS

The Directors do not recommend any dividend in order to reduce the deficit and strengthen the Balance Sheet of the Company.

OPERATIONAL REVIEW

The Company is in the business of textiles

BIFR

The Company is under BIFR (Board for Industrial & Financial Reconstruction) under Case No. 135 / 1989. The BIFR has sanctioned a Rehabilitation Scheme for the Company (SS-07) vide their Order dated 22 - 02 - 2007. This Rehabilitation Scheme is under implementation.

DIRECTORS

Ms. Aparna Sunit Khatau and Ms. Reena Sunit Khatau retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The information as required to be disclosed under Clause 49 of the listing agreement in case of re-appointment of directors is provided in the Notice of the ensuing Annual General Meeting.

DEPOSITS

The company has not accepted any fresh deposits during the year.

PARTICULARS OF EMPLOYEES

There were no employees covered under Section 217 (2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, during the year under review.

LISTING

a. The Company has obtained Listing Approval from BSE in respect of preferencial allotment of

17,49,000 equity shares to the promoters of the Company as per Clause 11 (h)(iv) of the scheme.

b. The Company has paid listing fees upto 31st March, 2014.

c The application made by the Company to obtain trading permission of the shares is pending

before BSE.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) that in preparation of the annual accounts for the year ended 31-03-2014 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 judgements 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 period and of the profit of the Company for the period under report.

iii) 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, 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 period ended 31 -03-2014 on a ''going concern basis''.

COMPLIANCE CERTIFICATE

Compliance Certificate obtained under Section 383A of the Companies Act, 1956 read with Companies (Issue of Compliance Certificate) Rules, 2001 from M/s. P P Shah & Co., Practising Company Secretaries is annexed herewith.

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

In accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo, is not annexed to this Board Report since the rehabilitation scheme is in progress.

AUDITORS''REPORT

As regards the observations, reservations or qualifications of the Auditors in the Auditors'' Report, the relevant notes on the Accounts are self-explanatory.

AUDITORS

Messrs. SorabS. Engineers Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received Certificate from them to the effect that their re-appointment, if made , would be within the limits prescribed under section 141 (3) (g) of the Companies Act, 2013. The Board of Directors proposes their re-appointment at the ensuring Annual General Meeting of the Company.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to all the Company''s employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors would also like to thank the shareholders for their continuous support given by them to the Company and their confidence in its management.

For & on behalf of the Board of Directors THE KHATAU MAKANJI SPG & WVG CO. LIMITED

Smt. Panna Sunit Khatau Chairperson

Date : 28th April, 2014 Place: Mumbai

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Mar 31, 2013

The Directors are pleased to present their 138th Annual Report together with the statement of Accounts of your Company for the year ended 31 st March, 2013.

FINANCIAL RESULTS:

For the Year ended For the Year ended 31-03-2013 31-03-2012 Amt (f) Amt (?)

Profit (Loss) for the period before interest, 96,24,456 61,58,581 depreciation and taxation

Less: Interest

Depreciation 18,87,947 20,79,834

Taxation

Profit/(Loss) after interest, 77,36,509 40,78,747 depreciation and taxation

Deficit brought forward from the previous year (225,21,604) (62,17,351)

Total deficit carried to Balance Sheet (44,02,095) (21,38,604)

DIVIDENDS

The Directors do not recommend any dividend in order to reduce the deficit and strengthen the Balance Sheet of the Company.

OPERATIONAL REVIEW

The Company is in the business of textiles.

BIFR

The Company is under BIFR (Board for Industrial & Financial Reconstruction) under Case No. 135 / 1989. The BIFR has sanctioned a Rehabilitation Scheme for the company (SS-07) vide their Order dated 22-2-2007. This Rehabilitation Scheme is under implementation.

DIRECTORS

Smt. Panna S. Khatau and Mr. Keshavdatt Bhardwaj, retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

DEPOSITS

The company has not accepted any fresh deposits during the year.

PARTICULARS OF EMPLOYEES

There were no employees covered under Section 217 (2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, during the year under review.

LISTING

a. The Company has paid listing fees.

c. The application made by the Company to obtain trading permission of the shares is pending before BSE.

COMPLIANCE CERTIFICATE

Compliance Certificate obtained under Section 383Aof the Companies Act, 1956 read with Companies (Issue of Compliance Certificate) Rules, 2001 from M/s. P. P. Shah & Co., Practising Company Secretaries is annexed herewith.

AUDITORS'' REPORT

As regards the observations, reservations or qualifications of the Auditors in the Auditors'' Report, the relevant notes on the Accounts are self-explanatory.

AUDITORS

The Company''s Auditors - Messrs. Sorab S. Engineer & Co., Chartered Accountants, hold office up to the conclusion of the ensuing Annual General Meeting. The Company has received communication from them to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956. The Board proposes their re - appointment at the ensuing Annual General Meeting of the Company.

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

In accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo, is not annexed to this Board Report since the rehabilitation scheme is in progress.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

(i) that in preparation of the annual accounts for the year ended 31.03.2013, 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 judgements 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 period and of the profit of the Company for the period under report.

(iii) 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, 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 period ended 31.03.2013 on a ''going concern basis''.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to all the Company''s employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors would also like to thank the shareholders for their continuous support given by them to the Company and their confidence in its management.

For & on behalf of the Board of Directors

THE KHATAU MAKANJI SPINNING AND WEAVING COMPANY LIMITED

Panna S. Khatau

Chairperson

Place: Mumbai

Date :29th May, 2013

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Mar 31, 2012

The Directors are pleased to present their 137th Annual Report together with the statement of Accounts of your Company for the year ended 31st March, 2012.

FINANCIAL RESULTS : For the Year ended For the Year ended 31-03-2012 31-03-2011 Rupees Rupees

Profit (Loss) for the period before interest, 61,58,581 65,79,738 depreciation and taxation

Less: Interest - -

Depreciation 20,79,834 23,06,732

Taxation - -

Profit/(Loss) after interest, 40,78,747 42,73,006 depreciation and taxation

Deficit brought forward from the previous year (225,62,17,351) (226,04,90,357)

Total deficit carried to Balance Sheet (225,21,38,604) (225,62,17,351) DIVIDENDS

The Directors do not recommend any dividend in order to reduce the deficit and strengthen the Balance Sheet of the Company.

OPERATIONAL REVIEW

The Company is in the business of textiles.

BIFR

The Company is under BIFR (Board for Industrial & Financial Reconstruction) under CaseNo.135 / 1989. The BIFR has sanctioned a Rehabilitation Scheme for the company (SS-07) vide their Order dated 22,2,2007. This Rehabilitation Scheme is under implementation.

DIRECTORS

Ms. Neesha S. Khatau and Mr. B. S. Desai, retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

DEPOSITS

The company has not accepted any fresh deposits during the year.

PARTICULARS OF EMPLOYEES

There were no employees covered under Section 217 (2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, during the year under review.

LISTING

a. The Company has obtained Listing Approval from BSE in respect of preferential allotment of 17,49,000 equity shares to the promoters of the Company as per Clause 11 (h)(iv) of the scheme.

b. The Company has paid listing fees.

c. The application made by the Company to obtain trading permission of the shares is pending before BSE.

COMPLIANCE CERTIFICATE

Compliance Certificate obtained under Section 383Aof the Companies Act, 1956 read with Companies (Issue of Compliance Certificate) Rules, 2001 from M/s. P P Shah & Co., Practising Company Secretaries is annexed herewith.

AUDITORS' REPORT

As regards the observations, reservations or qualifications of the Auditors in the Auditors' Report, the relevant notes on the Accounts are self-explanatory.

AUDITORS

The Company's auditors Messrs Sorab S. Engineer & Co., Chartered Accountants, hold office up to the conclusion of the ensuing Annual general meeting. The Company has received communication from them to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956. The Board proposes their re-appointment at the ensuing Annual General Meeting of the Company.

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

In accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo, is not annexed to this Board Report since the rehabilitation scheme is in progress.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(i) that in preparation of the annual accounts for the year ended 31.03.2012 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 period and of the profit of the Company for the period under report.

(iii) 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, 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 period ended 31.03.2012 on a ‘going concern basis'.

ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to all the Company's employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank the shareholders for their continuous support given by them to the Company and their confidence in its management.

By Order of the Board of Directors

Panna S. Khatau

Mumbai, 25th June, 2012 Chairperson

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Mar 31, 2010

The Directors are pleased to present their 135th Annual Report together with the Audited Accounts of your Company for the year ended 31st March. 2010.

FINANCIAL RESULTS:

For 1the Year ended For the Period ended

31-03-2010 31-03-2009

Rupees Rupees

Gross Profit (Loss) for the period 87,10,890 5,15,23.494

Less: Interest

Depreciation 2.76,333 29,04,134

Taxation

Profit / (Loss) 61,34,557 4,86,19.360

Add : Income/ (Expenses) of Earlier years 5,64,09,271 -

Provision for taxation no longer required - 15,59.210

Surplus/ Deficit for the period (5,02,74,714) 5,01,78,570

Deficit brought forward from the previous year (221,02,15,643) (226,03,94.213)

Total deficit carried to Balance Sheet (226,04,90,357) (221,02,15,643)



DIVIDENDS

The Directors do not recommend any dividend in order to reduce the deficit and strengthen the Balance Sheet of the Company.

OPERATIONAL REVIEW

The Company is into trading operations in textiles i.e. Sarees. dress material. Cambrics, Dhoties etc.

IMPLEMENTATION OF THE SCHEME OF REHABILITATION

The Company is implementing the rehabilitation scheme under BIFR order. The Company has completed the following as per the rehabilitation scheme:

1. Issue of 17,49,000 Equity Shares to the promoters and listing of the same with BSE.

2. The face value and paid up value of Ihe shares has been reduced from Rs.100/- to Rs. 10/- and the same has been approved by BSE.

3. Revival of Trading /Manufacturing Operations at Mahad.

4. Settlement of dues of secured lenders including workers have been completed.

5. Settlement of statutory bodies have been completed.

6. Unsecured Creditors have been paid and discharged in accordance with the sanctioned scheme.

7. The company has paid and discharged dues of all the debentureholders as per the sanctioned scheme.

8. Fixed Deposit holders are being paid and discharged as per the sanctioned scheme.

DIRECTORS

Mr. B.S.Desai and Ms. Neesha Khatau, retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

Mr.Mahandra Vinchhi resigned from the Board of Directors of the company w.e.f. 21st September.2009.

DEPOSITS

The company has not accepted any fresh deposits during the year.

PARTICULARS OF EMPLOYEES

No employee is in receipt of remuneration of Rs.2,00.000/- or more per month or Rs.24,00.000/-or more per annum during the period under review. Hence, the details of remuneration paid to employees and other details as required by section 217 (2A) of the Companies Act, 1956 read with the Companies {Particulars of Employees) Rules, 1975, as amended , are not given.

LISTING

a. The Company has paid all the arrears of listing fees and current listing fee.

b.BSE has asked for certain fresh compliances and the Company has furnished all details and is awaiting for BSE clearance for lifting of suspension of trading of shares.

c. BSE vide its letter dated 18.10.2007 approved the reduction of value of share from Rs. 100 each to Rs.10 each.

d. BSE vide its letter dt.26.5.2010 informed the Company that listing of 17,49,000 shares allotted to Promoters as per Honble BIFR Order is being considered.

AUDITORS REPORT

As regards the observations, reservations or qualifications of the Auditors in the Auditors Report, the relevant notes on the Accounts are self-explanatory.

AUDITORS

The Companys auditors Messrs Sorab S. Engineer & Co., Chartered Accountants, hold office up to the conclusion of the ensuing Annual general meeting. The Company has received communication from them to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956. They are proposed to be appointed as the Auditors of the Company to hold office until the conclusion of next Annual General Meeting.

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

In accordance with the provisions of section 217{l)(e) of the Companies Act. 1956. the required information relating to Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo, is not annexed to this Board Report since there is no manufacturing operation of the Company during the year.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement u/s.217(2AA} of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed:-

(i) that in preparation of the annual accounts for the year ended 31.03.2010 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 judgements 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 period and the profit of the Company for the period under report.

(iii) 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, 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 period ended 31.03.2010 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors are grateful to all the shareholders and deposit-holders for their continued support during the Companys critical phase and all employees at various levels for their sincere work and devotion.

By Order of the Board of Directors

sd/-

Mumbai (Smt.Panna S Khatau)

Date : 12.07.2010 Chairperson