Notes EASTERN SILK INDUSTRIES LTD.

Transcription

1 Notes BOARD OF DIRECTORS S. S. Shah Chairman & Managing Director Sundeep Shah Executive Director Megha Shah Additional Director G. D. Harnaka H. S. Gopalka R. S. Rungta CHIEF FINANCIAL OFFICER U.S. Gutgutia COMPANY SECRETARY Deepak Agarwal REGIERED OFFICE 19, R. N. Mukherjee Road Kolkata FACTORIES Unit 1 411, Telugarahalli Road, Anekal, Bangalore Unit 2 Kammansandra Agrahara Kasaba Hobli, Anekal, Bangalore Unit 3 11A, 2nd Cross Indurial Area, Nanjangud, Karnataka Unit 4 Falta Special Economic Zone, 24 Parganas (Sou), We Bengal AUDITORS B. K. Shroff & Co. Chartered Accountants 23A, Netaji Subhas Road Kolkata BANKERS Allahabad Bank State Bank of India State Bank of Mysore The Federal Bank Ltd. Union Bank of India REGIRARS & SHARE TRANSFER AGENTS ABS Consultant Pvt. Ltd. 99, Stephen House, 6 Floor 4, B.B.D. Bag (Ea) Kolkata Phone : , absconsultant@vsnl.net 54 A N N U A L R E P O R T

2 NOTICE The SixtyNin Annual General Meeting of Eaern Silk Induries Ltd.(CIN. L17226WB1946PLC013554) will be held on Wednesday, rd e 23 September, 2015 at 11:00 A.M. at Kala Kunj, 48, Shakespeare Sarani, Kolkata , to transact e following business: ORDINARY BUSINESS : 1. To receive, consider and adopt e Statement of Profit & Loss for e year ended 31 March, 2015 and e Balance Sheet as at at date togeer wi e report of e Directors and Auditors ereon. 2. To consider and if ought fit, to pass, wi or wiout modification(s), e following Resolution as an Ordinary Resolution; RESOLVED at pursuant to e provisions of Section 139 and all oer applicable provisions, if any, of e Companies Act, 2013 and e Rules framed ereunder, as amended from time to time, e Company hereby ratifies e appointment of M/s B. K Shroff & Co, Chartered Accountants (Firm Regiration No E), as Auditors of e Company to hold office from e conclusion of is Annual General Meeting till e conclusion of e Seventie Annual General Meeting of e Company on such remuneration as may be determined by e Board of Directors of e Company. SPECIAL BUSINESS : 3. To consider and if ought fit, to pass wi or wiout modification, e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to e provisions of Section 196, 197 & 203 of e Companies Act, 2013 read wi Schedule V of e said Act (including any amendment, modification, variation or reenactment ereof) and subject to approval of e Central Government, if any, e approval of e Company be and is hereby accorded to e reappointment of Sri Sundeep Shah (DIN ) as e Whole Time Director of e Company for a period of ree years effective from 1 September, 2015 to 31 Augu, 2018 on e terms and conditions including remuneration as set out in e Explanatory Statement annexed to e Notice convening is meeting. RESOLVED FURTHER THAT e Board of Directors of e Company be and is hereby auorized to do all such acts, ings and deeds as may be necessary, proper and expedient to give effect to e above resolution. 4. To consider and if ought fit, to pass wi or wiout modification, e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to e provisions of Section 196, 197 & 203 of e Companies Act, 2013 read wi Schedule V of e said Act (including any amendment, modification, variation or reenactment ereof), and subject to approval of e Central Government, if any, Ms. Megha Shah (DIN ) who was appointed as an Additional Director pursuant to e provisions of Section 161(1) of e Companies Act, 2013 and e Articles of Association of e Company and who holds office up to e date of is Annual General Meeting, e approval of e Company be and is hereby accorded to her appointment as e Whole Time Director designated as e Executive Director of e Company for a period of ree years effective from 1 September 2015 to 31 Augu 2018 on e terms and conditions including remuneration as set out in e Explanatory Statement annexed to e Notice convening is meeting. RESOLVED FURTHER THAT e Board of Directors of e Company be and is hereby auorized to do all such acts, ings and deeds as may be necessary to give effect to e above resolution. 5. To appoint a Director in place of Sri G.D.Harnaka (DIN ), who retires by rotation and being eligible offers himself for reappointment and if ought fit, to pass wi or wiout modification, e following Resolution as a Special Resolution, being his age is in excess of 70 years. RESOLVED THAT Sri G.D.Harnaka (DIN ), be and is hereby appointed as an Independent Director for tenure of ree (3) years in pursuant to e provisions of sections 149(4), 149(6) and 152 of e Companies Act To adopt new regulations of e Articles of Association of e Company, pursuant to e provisions of Section 14 and oer applicable provisions, if any, of e Companies Act, 2013, (including any amendment ereto or reenactment ereof), and if ought fit, to pass wi or wiout modification, e following Resolution as a special Resolution. RESOLVED THAT pursuant to e provisions of Section 14 and oer applicable provisions, if any, of e Companies Act, 2013, (including any amendment ereto or reenactment ereof), e Articles of Association of e Company be and are hereby altered by replacing all e exiing regulations wi e new regulations and e said regulations be and is hereby adopted as new regulations of e Articles of Association of e Company. FURTHER RESOLVED THAT for e purpose of giving effect to is resolution, Sri Sundeep Shah (DIN ), Executive Director of e Company be and is hereby auorized, on behalf of e Company, to do all acts, deeds, matters and ings as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns for e purpose of giving effect to e aforesaid Resolution along wi filing of necessary Eforms wi e Regirar of Companies, We Bengal. RegieredOffice: 19, R. N. Mukherjee Road By Order of e Board Kolkata DEEPAK AGARWAL Dated : The 30 May, SECRETARY CIN: L17226WB1946PLC esilk@giascl01.vsnl.co.in 2 A N N U A L R E P O R T A N N U A L R E P O R T

3 (ix) (x) (xi) Ca your vote by selecting appropriate option and click on Submit and also Confirm when prompted. Upon confirmation, e message Vote ca successfully will be displayed. Once you have voted on e resolution, you will not be allowed to modify your vote. (xii) Initutional shareholders (i.e. oer an individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of e relevant Board Resolution/ Auority letter etc. togeer wi atteed specimen signature of e duly auorized signatory(ies) who are auorized to vote, to e Scrutinizer rough to esil.scrutinizer@gmail.com wi a copy marked to evoting@nsdl.co.in. B.. B. In case a Member receives physical copy of e Notice of AGM [for members whose IDs are not regiered VI. VII. VIII. IX. wi e Company/Depository Participant(s) or requeing physical copy] : (i) (ii) Initial password is provided as below/at e bottom of e Attendance Slip for e AGM: EVEN (Remote evoting Event Number) USER ID PASSWORD/PIN Please follow all eps from Sl. No. (ii) to Sl. No. (xii) above, to ca vote. In case of any queries, you may refer e Frequently Asked Queions (FAQs) for Members and remote evoting user manual for Members available at e downloads section of or call on toll free no.: If you are already regiered wi NSDL for remote evoting en you can use your exiing user ID and password/pin for caing your vote. You can also update your mobile number and id in e user profile details of e folio which may be used for sending future communication(s). The voting rights of members shall be in proportion to eir shares of e paid up equity share capital of e Company as on e cutoff date of 16 September, X. Any person, who acquires shares of e Company and become member of e Company after dispatch of e XI. XII. XIII. XIV. XV. XVI. notice and holding shares as of e cutoff date i.e. 16 September, 2015, may obtain e login ID and password by sending a reque at evoting@nsdl.co.in or RTA at absconsultant@vsnl.net. However, if you are already regiered wi NSDL for remote evoting en you can use your exiing user ID and password for caing your vote. If you forgot your password, you can reset your password by using Forgot User Details/Password option available on or contact NSDL at e following toll free no.: A member may participate in e AGM even after exercising his right to vote rough remote evoting but shall not be allowed to vote again at e AGM. A person, whose name is recorded in e regier of members or in e regier of beneficial owners maintained by e depositories as on e cutoff date only shall be entitled to avail e facility of remote evoting as well as voting at e AGM rough ballot paper. Mr. Atish Kumar Shaw, Practicing Chartered Accountant (Membership No ) has been appointed as e Scrutinizer for providing facility to e members of e Company to scrutinize e voting and remote evoting process in a fair and transparent manner. The Chairman shall, at e AGM, at e end of discussion on e resolutions on which voting is to be held, allow voting wi e assiance of scrutinizer, by use of Ballot Paper for all ose members who are present at e AGM but have not ca eir votes by availing e remote evoting facility. The Scrutinizer shall after e conclusion of voting at e general meeting, will fir count e votes ca at e meeting and ereafter unblock e votes ca rough remote evoting in e presence of at lea two witnesses not in e employment of e Company and shall make, not later an ree days of e conclusion of e AGM, a consolidated scrutinizer's report of e total votes ca in favour or again, if any, to e Chairman or a person auorized by him in writing, who shall countersign e same and declare e result of e voting forwi. The Results declared alongwi e report of e Scrutinizer shall be placed on e website of e Company and on e website of NSDL immediately after e declaration of result by e Chairman or a person auorized by him in writing. The results shall also be immediately forwarded to e NSE Limited, Mumbai. 4. Explanatory Statement pursuant to Section 102 of e Companies Act, 2013, in respect of Special Business set out in e Notice is annexed hereto. 5. Additional information pursuant to Clause 49 of e Liing Agreement wi Stock Exchange regarding e Directors who are proposed to be reappointed at e Annual General Meeting are provided in e Annexure to is Notice. 6. Pursuant to e provisions of Section 123, 124 of e Companies Act, 2013, dividends which remain unpaid or unclaimed for a period of seven years will be transferred to e Inveor Education and Protection Fund of e Central Government. Members, who have not encashed eir dividend warrants pertaining to e year , , may approach e Company's Regirars and Share Transfer Agents for obtaining duplicate dividend warrants. 7. Pursuant to subdivision of each Equity share of 10/ into five Equity shares of 2/ each, members holding shares in physical form, were requeed to surrender old share certificates to obtain new share certificates in lieu ereof. Those members, who have not surrendered eir old share certificates to e Company's Regirars and Share Transfer Agents, are requeed to do so at e earlie. 8. The Miniry of Corporate Affairs (vide circular nos. 17/2011 and 18/2011 dated April 21 and April 29, 2011 respectively), has undertaken a 'Green Initiative in Corporate Governance' and allowed companies to share documents wi its shareholders rough an electronic mode. Members are requeed to support is green initiative by regiering/updating eir addresses, in respect of shares held in dematerialized form wi eir respective Depository Participants and in respect of shares held in physical form wi e Company's Regirars and Share Transfer Agents. Item No. 3 Explanatory Statement under Section 102 of e Companies Act, Sri Sundeep Shah was reappointed as e Executive Director of e Company for a period of ree (3) years wi effect from 1 September, 2012 on e terms and conditions and remuneration as approved by e Members at e Annual General Meeting held on 26 September, As such, e present term of office of Sri Sundeep Shah shall expire on 31 Augu, Sri Sundeep Shah has been associated wi e Company since pa ree decades and possesses immense experience of overseas business. Keeping in view e contribution made by Sri Sundeep Shah for e grow of e Company, e Board of Directors of e Company and Nomination and Remuneration Committee have recommended e appointment of Sri Sundeep Shah as e Executive Director for a period of ree years effective from 1 September, 2015 on e following terms and conditions: 1. Salary : 1,25,000/ per mon 2. Perquisites : Sri Sundeep Shah will be entitled to e perquisites / benefits of residential accommodation or house rent allowance in lieu ereof; Gas, Electricity, Water, Furnishings; Medical expenses reimbursement for self and family; leave travel concession, club fees and personal accident insurance in accordance wi e rules of e Company subject to limit of an amount equal to e annual salary. In e event of loss or inadequacy of profits of e Company in any financial year, Sri Sundeep Shah will be entitled to such remuneration by way of salary, perquisites and allowance as specified above, subject to e approval of e Central Government if any pursuant to Schedule V of e Companies Act, Provisions for e use of e Company's car for official and personal use and telephone at residence shall not be included in e computation of e perquisites for e purpose of calculating e said ceiling. The Company's contribution to provident fund, gratuity payable as per rules of e Company and encashment of e leave at e end of e tenure shall not be included in e computation of e limits for e remuneration and perquisites as aforesaid. The above may be treated as an abract of e terms of appointment and Memorandum of concern or intere, pursuant to Section 190 of e Companies Act, Sri Sundeep Shah, e Whole Time Director of e Company, Sri S.S. Shah and Ms. Megha Shah being a relative of Sri Sundeep Shah may be deemed to be intereed in e resolution. Item No. 4 Ms. Megha Shah was appointed as e Additional Director of e Company w.e.f in compliances wi e provisions of e Companies Act, 2013 and amendments made in Clause 49 of e Liing Agreement, as one woman director is to be appointed in e Board. Ms. Megha Shah has been providing her valuable contribution to e Company in designing fabrics in specific orders from e cuomer and at present where e market is at its all time low, her inclusion in e management of e Company will rengen e Board. Looking forward to boo e grow of e Company while keeping in mind e cuomer's specifications, e Board of Directors of e Company and Nomination and Remuneration Committee have recommended e appointment of Ms. Megha Shah as e Executive Director for a period of ree years effective from 1 September, 2015 on e following terms and conditions: 4 A N N U A L R E P O R T A N N U A L R E P O R T

4 1. Salary : 50,000/ per mon 2. Perquisites : Ms. Megha Shah will be entitled to e perquisites / benefits of residential accommodation or house rent allowance in lieu ereof; Gas, Electricity, Water, Furnishings; Medical expenses reimbursement for self and family; leave travel concession, club fees and personal accident insurance in accordance wi e rules of e Company subject to limit of an amount equal to e annual salary. In e event of loss or inadequacy of profits of e Company in any financial year, Ms. Megha Shah will be entitled to such remuneration by way of salary, perquisites and allowance as specified above, subject to e approval of e Central Government if any pursuant to Schedule V of e Companies Act, Provisions for e use of e Company's car for official and personal use and telephone at residence shall not be included in e computation of e perquisites for e purpose of calculating e said ceiling. The Company's contribution to provident fund, gratuity payable as per rules of e Company and encashment of e leave at e end of e tenure shall not be included in e computation of e limits for e remuneration and perquisites as aforesaid. The above may be treated as an abract of e terms of appointment and Memorandum of concern or intere, pursuant to Section 190 of e Companies Act, Ms. Megha Shah, Director of e Company, Sri S.S. Shah and Sri Sundeep Shah being a relative of Ms. Megha Shah may be deemed to be intereed in e resolution. Item No. 5 Your Directors recommend e resolution set out at Item No.5 of e Notice for approval of e Members, as Sri G.D Harnaka has completed 70 years of age and hence e Special Resolution. Item No. 6 The Exiing regulations of e Articles of Association are replaced by e new set of regulations and e same be adopted as new set of Articles of Association. The modification in e Articles of Association is carried out to give effect to e provisions of e Companies Act, Consent of e shareholders by passing a Special Resolution is required in is regard. New set of regulations of e Articles of Association shall be made available at e reque of e shareholders. Annexure to Notice dated 30 May, 2015 Details of Director seeking ReAppointment at e forcoming Annual General Meeting (Pursuant to Clause 49 of e Liing Agreement) Name of e Director Age Date of Appointment on e Board Qualification Experience Directorship held in oer Public Companies Memberships / Chairmanships of Committees of Public Companies Shareholding of NonExecutive Directors Shri G. D. Harnaaka 77 years B. Com Wide experience in textile & textile goods business. Nil DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting eir sixtynin Annual Report togeer wi e Audited Accounts of your Company for e year ended 31 March, FINANCIAL RESULTS ( in Lacs) Profit/(Loss) before depreciation / Exceptional items and taxation (3,411.77) (11,771.01) Less : Depreciation 2, , Profit/(Loss) before taxation (5,434.85) (13,338.53) Add /( Less) : Exceptional Items 1, (306.21) (3,688.24) (13,644.74) Add/ (Less) : Provision for Earlier Year Taxation. (3,688.24) (13,644.74) Add/ (Less) : Deferred Tax Liability. Profit/(Loss) after tax (3,688.24) (13,644.74) Add: Balance brought forward from previous year (18,337.52) (4,692.78) Add: Transferred from Depreciation Adjuments (Less): Depreciation on Revalued Assets (817.64) Which e Directors have decided to carry forward to e next year (22,767.46) (18,337.52) PERFORMANCE REVIEW Highlights of performance during e financial year are: Total Revenue from Operation of e Company is.6, lacs as again.7, lacs in e previous year. Operating Profit / ((Loss) is.(3,411.77) lacs as again.(11,771.01) lacs in e previous year. Profit / (Loss) before taxation is.(5,434.85) lacs as again.(13,338.53) lacs in e previous year. Profit / (Loss) after Tax is.(3,688.24) lacs as again of.(13,644.74) lacs in e previous year. The performance of e Company for e year has not been very encouraging as e markets did not support and e offtake of e company's products also slowed down resulting in sluggish sales. The Company is a referred company under e Sick Indurial Companies (Special Provision) Act, 1985 (SICA) and e process of regiering e same in e Board for Indurial and Financial Reconruction (BIFR) is under way. The notices in respect of e same have already been issued to all e akeholders. The company's main ay i.e. Silk Textiles have undergone sea change in terms of tapering of demand on a yeartoyear basis. As compared to e previous year e sale of silk products have come down by more an 15% 18%. The resultant gap created is filled by lowend products fetching a very meager realization. Your company in spite of all e hardships and difficulties in e market has been diligently introducing new designs and new blends and also exploring new markets. FUTURE OUTLOOK To bring down e co of production, your company will have to increase e scale of operation which requires infusion of machineries and technology. But unfortunately, considering financial condition of e company it may not be possible to undertake is exercise. However, e management is doing its be by ploughing back e small surplus created from weaving capacity and wherever reengineering is required, e same is being done. Wiin e limited scope under rericted market condition, your management is very positively responding to matching situation in e global market. DIVIDEND In view of e accumulated losses e Board of Directors does not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares. 6 A N N U A L R E P O R T A N N U A L R E P O R T

5 PUBLIC DEPOSIT SCHEME During e year, your Company has not accepted any deposits. There are no outanding deposits as on date. DIRECTORS AND KEY MANAGERIAL PERSONNEL Sri G.D. Harnaka, Director of e Company retires from e office by rotation and is eligible for reappointment in accordance wi e provisions of e Act and Articles of Association of e Company. The members approved e reappointment of Sri S.S. Shah, Managing Director for a period of 3 years effective from 1 September, 2014 to 31 Augu, 2017, during e year under review. Members also approved e reappointment of Sri. H.S. Gopalka and Sri R.S. Rungta, NonExecutive Directors for a period of 3 years. Requisite declarations from all e Independent Directors of e Company confirming at ey met e criteria of Independence as prescribed bo under e Act and Clause 49 of e Liing Agreement wi e NSE, Mumbai has been received. Necessary policies and e criteria for e performance evaluation of Directors as Individual, Board and Committees are devised by e Company. Evaluation of Board and Committees are being done under be practices prevalent in e Indury. The Company ensures conitution of e Board of Directors wi an appropriate composition, size, diversified expertise and experience and commitment to discharge eir responsibilities and duties effectively. Nomination & Remuneration Committee formulated by e Company's Board in accordance wi e provisions of Section 178 of e Companies Act, 2013 and Clause 49 of e Liing Agreement evaluates e each individual wheer ey met e specified criteria and provides valuable contribution to e Company. At e time of appointment/reappointment of Independent Director, Nomination & Remuneration Committee assess e independence of e directors as referred in Section 149(6) of e Companies Act, 2013 and Clause 49(II)(B) of e Liing Agreement and reassess e same when any new intere or relationships are disclosed by em. The Independent Directors shall abide by e Code of Independent Directors as specified in Schedule IV to e Companies Act, Nomination & Remuneration Committee ensures at all e requisite and applicable provisions of e Companies Act, 2013 rules and regulations made ereunder and Clause 49 of e Liing Agreement as amended from time to time are complied wi. DIRECTORS' RESPONSIBILITY ATEMENT Your Directors ate at: i) in e preparation of e annual accounts for e year ended March 31, 2015, e applicable accounting andards read wi requirements set out under Schedule III to e Act, have been followed and ere are no material departures from e same; ii) at e Directors have selected such accounting policies and applied em consiently and made judgments and eimates at are reasonable and prudent so as to give a true and fair view of e ate of affairs of e Company at e end of e financial year and of e loss of e Company for e year under review. iii) at e Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance wi e provisions of e Act for safeguarding e assets of e Company and for preventing and detecting fraud and oer irregularities. iv) at e Directors have prepared e accounts for e financial year ended 31 March, 2015 on a going concern basis. v) e Directors have laid down internal financial controls to be followed by e Company and at such internal financial controls are adequate and are operating effectively; and vi) e Directors have devised proper syems to ensure compliance wi e provisions of all applicable laws and at such syems are adequate and operating effectively. CORPORATE GOVERNANCE The Company is committed to maintain e highe andards of corporate governance and adhere to e corporate governance requirements set out by SEBI. The report on Corporate Governance as ipulated under e Liing Agreement forms an integral part of is Report. The requisite certificate from e Auditors of e Company confirming compliance wi e conditions of corporate governance is attached to e report on Corporate Governance. A separate section on Corporate Governance and Management Discussion and Analysis togeer wi e Auditors' Certificate confirming e compliance of conditions on Corporate Governance as per Clause 49 of e Liing Agreement wi e Stock Exchange form part of e Annual Report as Annexure II. CORPORATE SOCIAL RESPONSIBILITY The Company has formulated e Corporate Social Responsibility Committee (CSRC) in consultation wi e Board during e year pursuant to introduction of Section 135 under e Companies Act, Sri Sundeep Shah, Sri H. S. Gopalka and Sri G.D Harnaka are e members of e CSRC. Since e Company has been incurring cash losses in e la ree preceding financial years, e Board does not recommend any amount to be spent on e CSR activities. However e Board ensures at once e Company will art earning profits, ey shall after taking into account e recommendations of e CSRC, approve e Corporate Social Responsibility Policy of e Company and shall disclose contents of such policy in its report and will also place e same on e Company's website. BANK LOANS The One Time Settlement proposal given by e management to e banks for e outanding dues to em, have been in e process of negotiation bilaterally wi e Company. Two banks namely ICICI Bank and State Bank of Hyderabad have settled on One Time Settlement basis. Your management has paid e entire amount of e money to em. Negotiation wi e oer banks on a bilateral basis is going on. RISK MANAGEMENT The Company has been addressing various risks impacting e Company and e policy of e Company. During e year, your Directors made sure at all e risks at e organization faces such as rategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and oer risks have been identified and assessed and ere is an adequate risk management infraructure in place capable of addressing ose risks. The Company manages, monitors and reports on e principal risks and uncertainties at can impact its rategic long term objectives. The risk management process is reviewed periodically in order to keep it aligned wi e emerging risks across e globe. Various programmes involve risk identification, assessment and risk mitigation planning for rategic, operational, financial and compliance related risks across various levels of e organization. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls wi reference to financial atements. During e year, such controls were teed and no reportable material weaknesses in e design or operation were observed. DISCLOSURE OF PARTICULARS Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under e Companies (Accounts) Rules, 2014 is annexed as Annexure I : AUDITORS Messrs B.K. Shroff & Company, Chartered Accountants, holds office till e conclusion of e ensuing Annual General Meeting and are eligible for reappointment. They have confirmed eir eligibility to e effect at eir reappointment, if made, would be wiin e prescribed limits under e Act and at ey are not disqualified for reappointment. The remarks of e Auditors regarding losses of e company, intere on debt outanding, reference to BIFR, provision for bad and doubtful debts, recognition of Net Deferred Assets have been duly explained in Note No. 33(b), 35, 36(a) and 37 to e accounts respectively. CO AUDITORS Pursuant to e Companies (Co Records And Audit) Rules, 2014 notified w.e.f 30 June, 2014 Textile Indury has been exempt from maintaining e co records and for conducting e audit of such records. However Your Company is continuing its association wi M/s. N. Radhakrishnan & Co., a firm of Co Auditors, for assiing and directing e Company wi regard to allocation of direct and indirect cos to e various products and suggeing various measures lowering e co wiout compromising wi e quality. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by e Company during e financial year wi related parties were in e ordinary course of business and on an arm's leng basis. During e year, e Company had not entered into any contract / arrangement / transaction wi related parties which could be considered material in accordance wi e policy of e Company on materiality of related party transactions. Your Directors draw attention of e members to Note 41 to e financial atement which sets out related party disclosures. SECRETARIAL AUDITOR The Board has appointed Ms. Garima Gupta, Practicing Company Secretary, to conduct Secretarial Audit for e financial year The Secretarial Audit Report for e financial year ended March 31, 2015 is annexed herewi marked as Annexure III to is Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 8 A N N U A L R E P O R T A N N U A L R E P O R T

6 EXTRACT OF ANNUAL RETURN Extract of Annual Return of e Company is annexed herewi as Annexure IV to is Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Your Directors appreciate e significant contribution made by e employees to e operations of your Company during e period. In terms of provisions of Section 197(12) of e Act read wi Rules 5(1), 5(2) and 5(3) of e Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a atement showing e names and oer particulars and disclosures of e employees drawing remuneration in excess of e limits set out in e said rules are provided in e Annual Report. Having regard to e provisions of e fir proviso to Section 136(1) of e Act and as advised, e Annual Report excluding e aforesaid information is being sent to e members of e Company. The said information is available for inspection at e regiered office of e Company during working hours and any member intereed in obtaining such information may write to e Company Secretary and e same will be furnished on reque. VIGIL MECHANISM/ WHILE BLOWER POLICY In pursuance to e provisions of section 177(9) & (10) of e Companies Act, 2013, e Company has formulated a vigil mechanism (while blower policy) for its directors and employees of e Company for reporting genuine concerns about uneical practices and suspected or actual fraud or violation of e code of conduct of e Company as prescribed under e Companies Act, 2013 and Clause 49 of e Liing Agreement. This vigil mechanism shall provide a channel to e employees and Directors to report to e management concerns about uneical behaviour, and also provide for adequate safeguards again victimization of persons who use e mechanism and also make provision for direct access to e chairperson of e Audit Committee in appropriate or exceptional cases. The Policy is available on e website of e Company. GENERAL Your Directors ate at no disclosure or reporting is required in respect of e following items as ere were no transactions on ese items during e period under review: 1. Details relating to deposits covered under Chapter V of e Act. 2. Issue of equity shares wi differential rights as to dividend, voting or oerwise. 3. Issue of shares (including sweat equity shares) to employees of e Company under any scheme save and except ESOS referred to in is Report. 4. Neier e Managing Director nor e Wholetime Directors of e Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by e Regulators or Courts or Tribunals which impact e going concern atus and Company's operations in future. Your Directors furer ate at during e year under review, ere were no cases filed pursuant to e Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, ACKNOWLEDGEMENT Your Directors wish to convey eir appreciation for e cooperation and assiance received from e government, financial initutions, bankers and akeholders of your Company. The Board wishes to place on record its deep appreciation for e integrity and hard work of its employees at all levels to meet challenging markets. Regiered Office: By Order of e Board 19 R. N. Mukherjee Road S. S. SHAH Kolkata Chairman & Managing Director Dated: The 30 May, ANNEXURE TO DIRECTORS' REPORT Annexure I Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under e Companies (Accounts) Rules, 2014 are as follows: CONSERVATION OF ENERGY : The Company is engaged in e continuous review of energy cos, reduction in energy generation co rough improved operational and maintenance practices. (A) Power and Fuel Consumption : Quantity Kgs. 1,14,580 9,63,750 Total Amount 5,35,449 35,72,123 Co/Unit (B) Consumption per unit of products: Fabrics Mts. 5,08, ,47, Electricity Briquettes Fire Wood Diesel TECHNOLOGY ABSORPTION FORM B Research & Development 1. Specific areas in which R&D carried out R&D activities are carried out for development of by e Company new products. 2. Benefits derived as a result of above R&D Improvement in quality and cuomer satisfaction 3. Future plan of action Development of new varieties of products. 4. Expenditure on R & D Capital Nil Recurring lakhs R&D Expenditure 1.53% as a percentage of turnover 10 A N N U A L R E P O R T A N N U A L R E P O R T FORM A 1. Electricity Current Year Previous Year (a) Purchased Units 23,91,630 26,80,730 (b) 2. (a) Briquettes (b) Total Amount 1,65,59, ,73,91,706 Rate/Unit Own Generation rough Diesel Generator Units 1,84,728 1,86,388 Total Amount 30,95,297 34,13,006 Co/Unit Quantity Kgs 10,48,896 4,71,099 Total Amount 61,29,384 25,26,839 Co/Unit Fire Wood

7 Technology Absorption, Adaptation & Innovation 1. Efforts in brief, made towards technology Absorption, adaptation and innovation Late softwares are used for better design development 2. Benefits derived as a result of e above Improved products 3. Details of imported technology Not Applicable. FOREIGN EXCHANGE EARNINGS & OUTGO (a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for product and services and export plans. (b) (i) Overseas Travelling (ii) Commission to Agents (iii) Consultation Fees (iv) Oers Kolkata Dated : The 30 May, 2015 Annexure II REPORT ON CORPORATE GOVERNANCE COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE: Participating in e international trade fairs to showcase e Company's new developments and also invite e different Company s selling agents as well as cuomers to provides a platform of interaction in order to procure orders for e Company's products as well as scout for new cuomers. Travelling expenses in respect of such activities are also expensive. Travelling by e sales personnel also brings in orders for e Company's products. The information on foreign exchange earnings and outgo is contained in Note No. 45 & 46 of Notes on Financial Statements. The Company lays emphasis on good corporate practices which will enable e management to conduct e affairs of e Company in a transparent manner and culminate in optimum use of its resources for achieving highe andards of corporate governance. Pursuant to Clause 49 of e Liing Agreement wi e Stock Exchange, a Report on Corporate Governance for e year is given below. BOARD OF DIRECTORS By Order of e Board S. S. SHAH Chairman & Managing Director The Board comprises of five members two Executive Directors and ree NonExecutive Independent Directors. The composition of e Board of Directors and also e number of e Board of Directors or Board Committees of which he is a member / Chairperson are as under. Name of e Director Category No. of oer Directorship No. of Membership of oer Board Committee No. of Board Committee for which Chairperson Shri S.S. Shah Promoter, Executive Nil During e year under review, Board Meetings were held on 28 May, 2014, 27 of June, 2014, 14 Augu, 2014, 14 November, 2014 and 13 February, The attendance of e Directors for e Board Meeting and e la Annual General Meeting (AGM) was as follows : Name of e Director Meeting Attended Wheer attended e la AGM Shri S.S. Shah 5 Yes Shri Sundeep Shah 5 Yes Shri G.D. Harnaka 2 No Shri H.S. Gopalka 5 Yes Shri R.S. Rungta 5 Yes Pursuant to e provisions of e Companies Act, 2013 and Clause 49 of e Liing Agreement, e Board has carried out e annual performance evaluation of its own performance, e Directors individually as well as e evaluation of e working of its Board Committees. BOARD COMMITTEES Audit Committee I. Conitution The Audit Committee of e Company was conituted to exercise powers and discharge functions as ipulated in Section 177 of e Companies Act, 2013, Clause 49 of e Liing Agreement wi Stock Exchange and oer relevant atutory / regulatory provisions. II. Composition The Audit Committee of e Company comprises ree Directors of which two are nonexecutive independent Directors namely Shri H.S. Gopalka and Shri R.S. Rungta and one Executive Director namely Shri Sundeep Shah. All ese directors have knowledge of corporate finance, accounts and company law. The Chairman of e Committee is Shri H.S. Gopalka. The Company Secretary acts as e Secretary of e Committee. Besides e Committee members, Financial Officer and partners / representatives of e firm of Statutory Auditors and Internal Auditors are permanent invitees at e meetings of e Committee. III. Meetings and Attendance During e financial year ended 31 March, 2015, four Audit Committee meetings were held on 27 May, 2014, 13 Augu, 2014, 13 November, 2014 and 12 February, 2015 which were attended by all e members of e Committee. Nomination & Remuneration Committee (Formerly known as Remuneration Committee ) I. Conitution The Nomination & Remuneration Committee of e Company is formed to recommend remuneration packages for WholeTime Directors. Such recommendations are based on e overall financial performance and profitability of e Company and on evaluation of e personal contribution of e individual directors. II. Composition The Members of e Nomination & Remuneration Committee are Shri H.S. Gopalka, Shri R.S. Rungta and Shri G.D. Harnaka. Shri R.S. Rungta acts as e Chairman of e Committee. III. Meeting and Attendance During e financial year ended 31 March, 2015 no Nomination & Remuneration Committee Meeting was held. The details of e remuneration to e directors for e year ended 31 March, 2015 are presented in e extract of Annual Return of e Company, which is annexed herewi as Annexure IV to is Report. Shri Sundeep Shah Shri G.D. Harnaka Shri H.S. Gopalka Shri R.S. Rungta Promoter, Executive NonExecutive, Independent NonExecutive, Independent NonExecutive, Independent Nil Nil Nil 1 Nil SHAREHOLDERS COMMITTEE: Share Transfer Committee I. Conitution Share Transfer Committee was conituted to deal wi various matters relating to transfer and transmission of shares, issue of duplicate share certificates and approving e split and consolidation reques and oer matters relating to transfer and regiration of shares. 12 A N N U A L R E P O R T A N N U A L R E P O R T

8 II. III. Composition The members of e Committee are Shri S. S. Shah, Shri Sundeep Shah and Shri Deepak Agarwal. Shri S. S. Shah acts as e Chairman of e Committee. Meeting & Attendance During e financial year ended 31 March, 2015, Seven Share Transfer Committee meetings were held. No sitting fee was paid to any member of e Share Transfer Committee. Inveors' Grievance Committee I. Conitution Inveors' Grievance Committee was formed to oversee e redressal of shareholders' and inveors' grievances in relation to transfer of shares, nonreceipt of annual report, nonreceipt of dividend etc. II. III. Composition The Committee comprises of two nonexecutive independent directors namely Shri H. S. Gopalka and Shri R. S. Rungta and one Executive Director namely Shri Sundeep Shah. Shri R.S. Rungta is e Chairman of e Committee. Meeting & Attendance During e financial year ended 31 March, 2015, four Inveors' Grievance Committee meetings were held. GENERAL BODY MEETING i) General Meetings: The la ree Annual General Meeting of e Company were held as under: Date Time Venue 26 September, :00 A.M September, 2013 June, :00 A.M. 11:00 A.M. Kala Kunj 48 Shakespeare Sarani Kolkata DO DO ii) Special Resolutions: Special resolutions were passed during e year at e AGM held as on 25 June, 2014 for e reappointment of Shri. S.S Shah, Shri, H.S. Gopalka and Shri R.S. Rungta. iii) Ballot Voting : Ballot Voting was conducted during e year at e AGM held as on 25 June, 2014 to get in line wi e evoting provisions newly introduced under e Companies Act, DISCLOSURES a) The Company has not entered into any transaction of a material nature wi e promoters, directors or management, or eir relatives at may have potential conflict wi e intere of e Company at large. b) A qualified practicing Company Secretary carries out a secretarial audit to reconcile e total admitted capital wi National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd. (CDSL) and e total issued and lied capital. The secretarial audit report confirms at e total issued/paid up capital is in agreement wi e total number of shares in physical form and e total number of dematerialized shares held wi NSDL and CDSL. c) Chairman and Managing Director and Executive (Finance) have furnished e requisite certificates to e Board of Directors pursuant to Clause 49 of e Liing Agreement. MEANS OF COMMUNICATION The financial results of e Company are published in English and Regional newspapers in India. The results are also displayed on e Company's website. Press releases are also made by e Company from time to time to facilitate better communication wi e shareholders and inveors. GENERAL SHAREHOLDERS INFORMATION I) Sixty Nin Annual General Meeting Venue : Kala Kunj, 48 Shakespeare Sarani, Kolkata Date : 23rd September, 2015 Time : 11:00 A.M. ii) Financial Calendar Fir quarter results By mid of Augu Second quarter results By mid November Third quarter results By mid of February Four quarter results By end May iii) Book Closure rd The date of book closure is from 17 September, 2015 to 23 September, 2015 (bo days inclusive). iv) Liing on Stock Exchange NAME OF OCK EXCHANGE National Stock Exchange of India Ltd. OCK CODE EASILK Liing fee for e year has been paid to National Stock Exchange of India Ltd. v) Stock Market Data The Company's high and low prices recorded on National Stock Exchange of India Ltd. during e financial year are given below: MONTH HIGH () LOW () APRIL MAY JUNE JULY AUGU SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH vi) Share Holding (as on 31 March, 2015) The shareholding diribution as at 31 March, 2015 is as follows: No. of Shares Number of % To Total No. of % To total Share Holders Holders Shares held Holding Upto , ,77, , ,85, , ,26, ,55, ,73, ,69, ,74, & above ,25,89, TOTAL 21, ,89,52, A N N U A L R E P O R T A N N U A L R E P O R T

9 The shareholding pattern as at 31 March, 2015 is as follows: vii) viii) ix) Category No. Shares % age of Holding Promoters including NRI Promoters 4,04,88, Financial Initutions, Banks, Mutual Fund Etc. 43,09, Non Resident Indians / OCBs / FIIs 15,26, Private Corporate Bodies 86,17, Indian Public 2,40,11, TOTAL 7,89,52, Dematerialisation of Shares As directed by Securities Exchange Board of India (SEBI) Equity shares of e Company are being traded in compulsory dematerialised form by all e inveors. The Company has entered into an agreement wi bo depositories viz., National Security Depository Ltd. (NSDL)and Central Depository Services (India) Ltd. (CDSL) enabling e inveors to hold shares of e Company in electronic form. The ISIN of Eaern Silk for transactions of shares in depository mode is INE 962CO1027. As on e dematerialised shares were 7,65,66,447 which represents 96.97% of e total subscribed capital. The equity shares of e Company are regularly traded on e National Stock Exchange. Share Transfer Syem Share transfers in physical form are regiered by e Regirar and Share Transfer Agents and are returned to e respective transferees wiin a period ranging from fifteen days to one mon provided e documents lodged wi e Regirar/Company are clear in all respects. Regirar and Share Transfer Agents The Company's Share Transfer Agents are ABS Consultant Pvt. Ltd., 99, Stephen House, 6 Floor, 4 BBD Bag (Ea), Kolkata for effecting transfer/transmission etc. in physical and demat form. x) Plant Location Unit 1 : 411, Telugarahalli Road Anekal, Bangalore Unit 2 : Kammansandra Agrahara Kasaba Hobli Anekal, Bangalore Unit 3 : 11A, 2nd Cross Indurial Area, Nanjangud, Karnataka Unit 4 : Falta Special Economic Zone 24 Parganas (Sou), We Bengal xi) Address for Correspondence Eaern Silk Induries Ltd. (CIN: L17226WB1946PLC013554) 19, R. N. Mukherjee Road Kolkata Phone : (3 Lines) Fax : esilk@giascl01.vsnl.co.in Website : CODE OF PROFESSIONAL CONDUCT The Company had formulated a Code of Conduct for all Board Members and Senior Managerial Personnel and e same was adopted by e Board in its meeting held on 27 January, The Code is also available on e website of e Company. Annexure III SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2015 [Pursuant to section 204(1) of e Companies Act, 2013 and Rule 9 of e Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members Eaern Silk Induries Limited 19 R.N. Muhkerjee Road Kolkata I have conducted e secretarial audit of e compliance of applicable atutory provisions and e adherence to good corporate practices by Eaern Silk Induries Limited (hereinafter called e Company). Secretarial Audit was conducted in a manner at provided me a reasonable basis for evaluating e corporate conducts/atutory compliances and expressing my opinion ereon. Based on my verification of e Company's books, papers, minute books, forms and returns filed and oer records maintained by e Company and also e information provided by e Company, its officers, agents and auorized representatives during e conduct of secretarial audit, I hereby report at in my opinion, e Company has, during e audit period covering e financial year ended on 31 March, 2015 ('Audit Period') complied wi e atutory provisions lied hereunder and also at e Company has proper Boardprocesses and compliancemechanism in place to e extent, in e manner and subject to e reporting made hereinafter: I have examined e books, papers, minute books, forms and returns filed and oer records maintained by e Company for e financial year ended on 31 March, 2015 according to e provisions of: (i) (ii) (iii) (iv) (v) a. b. c. d. e. f. g. h. (i) The Companies Act, 2013 (e Act) and e rules made ereunder; (ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and e rules made ereunder; (iii) The Depositories Act, 1996 and e Regulations and Byelaws framed ereunder; (iv) Foreign Exchange Management Act, 1999 and e rules and regulations made ereunder. (v) The following Regulations and Guidelines prescribed under e Securities and Exchange Board of India Act, 1992 ('SEBI Act'): (a) The Securities and Exchange Board of India (Subantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to e Company during e Audit Period); (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,2014 notified on 28 October, 2014 (Not applicable to e Company during e Audit Period); (e) The Securities and Exchange Board of India (Issue and Liing of Debt Securities) Regulations, 2008 (Not applicable to e Company during e Audit Period). (f) The Securities and Exchange Board of India (Regirars to an Issue and Share Transfer Agents) Regulations, 1993 regarding e Companies Act and dealing wi client; (g) The Securities and Exchange Board of India (Deliing of Equity Shares) Regulations, 2009 (Not applicable to e Company during e Audit Period); and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to e Company during e Audit Period). I have also examined compliance wi e applicable clauses of e following: (i) Secretarial Standards issued by The Initute of Company Secretaries of India (Not notified hence not applicable to e Company during e audit period). 16 A N N U A L R E P O R T A N N U A L R E P O R T