SKNL Annual Report 2006 2007

ANNUAL REPORT 2006-2007
BOARD OF DIRECTORS
Dr. A. C. Shah – Chairman

Nitin S. Kasliwal – Vice Chairman & Managing Director
Anil Channa – Deputy Managing Director
A. K. Choudhary – Director (Nominee of IFCI)
M. H. Kulkarni – Director (Nominee of IDBI)
Vijay Kalantri – Director
Jyoti N. Kasliwal – Director
Martin Henry – Director CONTENTS
Dara D. Avari – Director
Col. S. K. Raje – Director
Govind Mirchandani – Executive Director Notice…………………………………........ 2

COMPANY SECRETARY Key Financials at a Glance……………..... 8
L. N. Somani
Directors’ Report………………………..... 10
BANKERS
Bank of India Management Discussion & Analysis….... 16
Export-Import Bank of India
The Jammu & Kashmir Bank Ltd. Auditors’ Report………………………...... 19
State Bank of Indore
Industrial Development Bank of India Ltd. Balance Sheet…………………………....... 24
The Federal Bank Ltd.
Indian Bank Profit and Loss Account………………..... 25

AUDITORS Schedules to Accounts………………….... 26
Messrs Haribhakti & Co.
Significant Accounting Policies………..... 34
SOLICITORS
Messrs Little & Co. Notes forming part of Accounts……….... 36

REGISTRAR & TRANSFER AGENTS Cash Flow Statement…………………...... 46
Bigshare Services Pvt. Ltd.
E – 2, Ansa Industrial Estate, Report on Corporate Governance………. 48
Sakivihar Road, Sakinaka,
Andheri (East), Mumbai - 400 072
REGISTERED OFFICE
“Avadh” Avadhesh Parisar,
Shree Ram Mills Premises,
G. K. Marg, Worli,
Mumbai - 400 018
website : www.skumars.net
MAJOR PLANTS
Menswear and Home Worsted Fabrics Spinning and Weaving

Textiles Complex :- Complex :- Complex :-
3B Industrial Area No. 2, Thandavapura, Chamunda Standard Mills,
Agra Bombay Road, Nanjangud Taluka, Balgarh,
Dewas, (M.P.) Mysore Dist., Karnataka. Dewas, (M.P.)
1
NOTICE
NOTICE is hereby given that the 17th Annual General Meeting of the members of S. KUMARS NATIONWIDE LIMITED
will be held on Tuesday, 17th July 2007 at 4.00 p.m. at Walchand Hirachand Hall, Indian Merchants’ Chamber, Indian
Merchants’ Chamber Marg, Churchgate, Mumbai 400 020 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the audited Balance Sheet as at 31st March 2007 and the audited Profit & Loss
Account for the year ended as on that date together with the reports of the Auditors and Directors thereon.
2. To appoint a Director in place of Col. S. K. Raje, who retires by rotation and being eligible, offers himself for
reappointment.
3. To appoint a Director in place of Shri Govind Mirchandani, who retires by rotation and being eligible, offers
himself for reappointment.
4. To appoint Auditors and to fix their remuneration.
SPECIAL BUSINESS:
5. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary
Resolution:
“RESOLVED THAT pursuant to Section 228 and all other applicable provisions, if any, of the Companies Act,
1956, M/s. M. Mehta & Co., Chartered Accountants, 11/5, South Tukoganj, Indore 452 001, be and they are hereby
appointed as Branch Auditors of the Company to hold office from the conclusion of this 17th Annual General
Meeting until the conclusion of the next Annual General Meeting of the Company at a remuneration to be fixed by
the Board of Directors of the Company for auditing the books of accounts of Weaving and Fabric Divisions of
Amana unit at the Company’s works at Dewas.”
Resolution:
1956 Shri Anil Channa be and is hereby appointed as a Director of the Company, liable to retire by rotation.”
Resolution:
1956 Shri Vijay G. Kalantri be and is hereby appointed as a Director of the Company, liable to retire by rotation.”
Resolution:
1956 Smt. Jyoti N. Kasliwal be and is hereby appointed as a Director of the Company, liable to retire by rotation.”
9. To consider and, if thought fit, to pass with or without modification(s) the following Resolution as a Special
Resolution:
“RESOLVED THAT pursuant to Section 198, 269, 309, 311 and all other applicable provisions, if any, of the
Companies Act, 1956, the consent of the Company, be and is hereby accorded for reappointment of Shri Nitin S.
Kasliwal, as Vice Chairman and Managing Director of the Company with effect from 1st April 2007 for 5 years on
the terms and conditions mentioned hereunder:
Period: 1-4-2007 upto 31-3-2012
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Remuneration
Salary: Rs.130,00,000/- per annum. The annual increment may be decided by the Remuneration Committee and/or
Board of Directors in its absolute discretion.
Perquisites and Allowances: In addition to salary, he shall also be entitled to perquisites and allowances subject to
5% ceiling of net profit as per Section 309, 311 and all other sections/provisions of the Companies Act as under:
(1) Leave Travel Expenses / Allowances: Once in a year for self and family subject to a ceiling of one month’s
basic salary.
(2) Medical Expenses: Reimbursement of actual medical expenses for self and family.
(3) Club Fees: Reimbursement of club membership fees and annual charges.
The following perquisites / allowances shall not be included in the computation of the limits for the
perquisites and allowances:
(4) Leave Encashment: One month leave or encashment of the same for every 11 months’ service.
(5) Provident Fund as per Companies rules.

(6) Gratuity: Payable as per the rules of the Company.
(7) Car: Company’s Car will be provided with driver.
(8) Telephone: Telephones/Mobile phones/Any other telecommunication facilities at his residence will be
provided at Company’s cost.
(9) Entertainment, Travelling and all other expenses: Reimbursement of entertainment, travelling and all other
expenses incurred for the business of the Company.
Minimum Remuneration: In the event of loss or inadequacy of profits in any financial year during the currency of
tenure of the managerial personnel the remuneration including the perquisites as aforesaid shall not exceed the
limits specified in schedule XIII of the Companies Act, 1956.
10. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special
Resolution:
“RESOLVED THAT pursuant to Section 198, 269, 309, 311 and all other applicable provisions, if any, of the
Companies Act, 1956, the consent of the Company, be and is hereby accorded for appointment of Shri Anil
Channa, as a Deputy Managing Director of the Company with effect from 12th January 2007 for 3 years on the
remuneration and terms and conditions mentioned in the Explanatory Statement.
Period: 12-01-2007 upto 11-01-2010
Remuneration
Salary:
Rs.25 lacs per annum and perquisites. The annual increment may be decided by the Remuneration Committee
and/or Board of Directors in its absolute discretion.
Minimum Remuneration: In the event of loss or inadequacy of profits in any financial year during the currency of
tenure of the managerial personnel the remuneration including the perquisites shall not exceed the limits specified
in Schedule XIII of the Companies Act, 1956.
3
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take such
steps as may be necessary, to give effect to this resolution.”
11. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special
Resolution:
“RESOLVED THAT pursuant to Section 31 and all other applicable provisions, if any, of the Companies Act, 1956
interpretation of “S. Kumars” in Article 2 of the Articles of Association be and is hereby altered by replacing the
same with the following wherever it appears in the Articles of Association of the Company.”
“S. Kumars” shall mean Anjani Finvest Private Limited and shall include its duly authorised nominees.”
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take such
steps as may be necessary, to give effect to this resolution.”
By Order of the Board

For S. KUMARS NATIONWIDE LTD.
L.N.SOMANI
Place: Mumbai COMPANY SECRETARY
Date: 10th May, 2007
NOTES:
1. A member entitled to attend and vote is entitled to appoint a proxy/ proxies to attend and vote instead of himself
/ herself and a proxy need not be a member of the Company. Proxy forms should be deposited at the Registered
Office of the Company not less than 48 hours before the time fixed for the meeting.
2. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 relating to the special business
to be transacted at the meeting is annexed hereto.
3. The Register of Members and Share Transfer Books of the Company will remain closed from 12.07.2007 to
17.07.2007 both the days inclusive.
4. Pursuant to Section 205A of the Companies Act, 1956 the unclaimed dividend upto the financial year ended 30th
September, 1999 has been transferred to Investor Education & Protection Fund (IEPF) established under section
205C of the Companies Act, 1956.
5. As per the SEBI Notification dated 16th February, 2000, the Equity Shares of the Company have been compulsorily
demateralized and sale/ purchase of the same is required to take place in dematerialized form only. Members are
advised to get their shares dematerialized through NSDL or CDSL. They have allotted Number INE 772A01016. In
their interest, members are requested to please return the physical certificates through their DP.
6. Members desiring any information as regards the Accounts are requested to write to the Company at least 5 days
before the date of the meeting to enable the management to keep the information ready.
7. Re-appointment of Directors: At the ensuing Annual General Meeting, Col. S. K. Raje and Shri Govind
Mirchandani retire by rotation and being eligible, offer themselves for re-appointment. The term of office of Shri
Nitin S. Kasliwal expired on 31st March 2007 and the Special Resolution for reappointment of Shri Nitin S.
Kasliwal as a Vice Chairman and Managing Director is proposed for the approval of members. Shri Anil Channa
has been designated by the Board as Deputy Managing Director and the Special Resolution is proposed for the
4
approval of members of the Company. Pursuant to Clause 49 (VI) (A) of the Listing Agreement relating to the
Code of Corporate Governance, the particulars of the aforesaid Directors are given hereunder:
Details of Directors Seeking Appointment/ Re-appointment at the Annual General Meeting

Particulars Col. S. K. Raje Shri Govind Shri Nitin S. Shri Anil Channa Shri Vijay G. Kalantri Smt. Jyoti N.
Mirchandani Kasliwal Kasliwal
Date of Birth 3rd August 1935 31st October 1950 22nd November 1960 01st September 05th January 1949 26th December 1960
1948
Date of 31st January 2005 31st January 2005 24th February 2005 30th December 3rd February 2007 3rd February 2007
Appointment 2006
Qualifications M.A. B. Tech, B.Sc., B. Tech, G. C. D., B. A. (Economics)
(IIT,Mumbai), MBA(European MBA Textile Diploma
MBA (IIM, University,
Calcutta) Switzerland)
Expertise in specific Administration & Expertise in Expertise in Textile Expertise in Diversified Expertise Expertise in Textile,
functional area Textiles Textile Industry Industry Textile Industry in Business & Publicity and
Administration Marketing
Directorships S. Kumars Online Brandhouse S. Kumar Nil Balaji Infra Projects Ltd. Brandhouse Retails
held in other Limited Retails Limited Enterprises Balaji Infrastructure & Limited
Public Companies Landmarc Leisure (Synfabs) Ltd. Dev. Co. Ltd.
(excluding foreign Corporation Brandhouse Retails Anyuser Telecom
Companies) Limited Limited (India) Ltd.
Shree Ram Urban Dighi Port Limited
Infrastructure Ltd.
Hindustan Housing
Reid & Taylor Finance & Development
(India) Ltd. Corporation Ltd.
S.Kumars Life Sovereign Diamond Ltd
Assurance Corpn.
VIP Industries Ltd.
Ltd.
Vindhyachal Hydro
Power Ltd.
Gannun Pressure
Vessels Co. Ltd.
Man Industries (India)
Ltd.
Shree Ram Urban
Infrastructure Ltd.
SAB Industries Ltd.
Zicom Electronic
Security Systems Ltd.
Balaji Shipping &
Logistics Ltd.
Memberships / N.A N.A N.A N.A Man Industries (India) N.A.
Chairmanships of Ltd.
committees of other VIP Industries Ltd.
public companies
Zicom Electronic
(includes only Audit
Security Systems Ltd.
and Shareholders /
Investors Grievance
Committee)
Number of shares NIL NIL 11,32,453 NIL NIL 11,14,660
held in the company

For S. KUMARS NATIONWIDE LTD.
L.N.SOMANI
Place : Mumbai COMPANY SECRETARY
Date : 10th May 2007
5
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.
Item No.5
The Companies Act, 1956 provides that the Accounts of the Branch/ Division of the Company can be audited by Branch
Auditors appointed in accordance with Section 228 of the Companies Act, 1956. It is further emphasized that if the
Accounts of the Branches are to be audited by the Statutory Auditors then no resolution is required.
The Company proposes to get the accounts of its Weaving and Fabric Divisions of Amana unit at Dewas in Madhya
Pradesh audited by a person other than its Statutory Auditors. As such this resolution is required.
The Board recommends the resolution.
None of the Directors is, in any way, concerned or interested in the above resolution.
Item No.6
Shri Anil Channa was appointed as an additional director pursuant to Section 260 of the Companies Act, 1956 in the
Board Meeting held on 30th December 2006. He holds office upto the date of the Annual General Meeting. He was
appointed as a Deputy Managing Director w.e.f. 12th January 2007.
The Company has received notice under Section 257 of the Companies Act, 1956 with the requisite deposit proposing the
appointment of Shri Anil Channa as a Director.
Shri Anil Channa is 58 years of age. He is qualified B. Tech and MBA He is having around 35 years of experience. The
Company shall be benefited from his experience.
The members are requested to consider the resolution and approve the same.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Shri Anil
Channa himself.
Item No.7
Shri Vijay G. Kalantri was appointed as an additional director pursuant to Section 260 of the Companies Act, 1956 in the
Board Meeting held on 3rd February 2007. He holds office upto the date of the Annual General Meeting.
appointment of Shri Vijay G. Kalantri as a Director.
Shri Vijay G. Kalantri is 56 years of age. He is qualified G.C.D. & has completed Textile Diploma. He is having around 36
years of experience. The Company shall be benefited from his experience.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Shri Vijay
G. Kalantri himself.
Item No.8
Smt. Jyoti N. Kasliwal was appointed as an additional director pursuant to Section 260 of the Companies Act, 1956 in the
Board Meeting held on 3rd February 2007. She holds office upto the date of the Annual General Meeting.
appointment of Smt. Jyoti N. Kasliwal as a Director.
Smt. Jyoti N. Kasliwal is 46 years of age and is BA (Economics) by qualification and having several years of experience
in textiles, publicity and marketing.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Smt. Jyoti
N Kasliwal herself and Shri Nitin S Kasliwal as her relative.
6
Item No.9
The term of office of Shri Nitin S. Kasliwal as a Managing Director expired on 31st March 2007. The Board at its meeting
held on 10th May 2007 approved the reappointment of Shri Nitin S. Kasliwal as a Vice Chairman and Managing Director
for a term of 5 years commencing from 1st April 2007 on the terms and conditions and remuneration as recommended
by the Remuneration Committee and as mentioned in the Resolution. The remuneration is in accordance with the
Companies Act 1956, and also after taking into consideration the present market standards.
Shri Nitin S. Kasliwal is B. Sc. and MBA (European University, Switzerland) and possesses several years of experience
in textile industry.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Shri Nitin
S Kasliwal himself and Smt. Jyoti N Kasliwal as his relative.
Item No.10
Shri Anil Channa was appointed as an additional director pursuant to Section 260 of the Companies Act, 1956 in the
Board Meeting held on 30th December 2006. He was designated as Deputy Managing Director w.e.f. 12th January 2007.
Shri Anil Channa is 58 years of age. He is qualified B. Tech and MBA. He is having around 35 years of experience. The
Company shall be benefited from his experience.
The remuneration and other terms and conditions are mentioned in the Resolution. The remuneration is in accordance
with the Companies Act 1956, and also after taking into consideration the present market standards.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Shri Anil
Channa himself.
Item No.11
Interpretation of “S. Kumars” in existing Article 2 of Articles of Association reads as follows:
“S. Kumars” shall mean S. Kumar Enterprises (Synfabs) Limited and shall include its duly authorised nominees.”
Due to the reorganisation of business amongst the family members of the promoters of the Company, the Board has
decided to alter the interpretation of S. Kumars by replacing S. Kumar Enterprises (Synfabs) Limited with Anjani
Finvest Private Limited in this Article and wherever it appears.
“S. Kumars” shall mean Anjani Finvest Private Limited and shall include its duly authorised nominees.”
The Memorandum & Articles of Association of the Company shall be open for inspection during office hours at the
registered office of the Company.
None of the Directors of the Company is in any way concerned or interested in the proposed resolution except Shri Nitin
S. Kasliwal and Smt. Jyoti N. Kasliwal being directors of M/s Anjani Finvest Private Limited.

For S.KUMARS NATIONWIDE LTD.
L.N.SOMANI
Place : Mumbai COMPANY SECRETARY
7
KEY FINANCIALS AT A GLANCE
PROFIT AND LOSS ACCOUNT
(Rs in Crores)
Particulars 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
(Six
months)
INCOME
Sales and Services charges 807.05 620.85 615.16 344.53 889.73 1,229.54
Other Income 6.20 5.03 6.92 4.30 6.08 9.90
Increase/(Decrease) in Stock 10.24 60.05 25.82 (8.75) 17.90 86.45
Total 823.49 685.93 647.90 340.08 913.71 1,325.89
EXPENDITURE
Raw Material Consumed/Purchased 612.54 521.21 487.05 254.14 640.71 886.84
Manufacturing Expenses 58.97 46.19 43.12 20.02 43.84 49.10
Payment to & for Employees 18.08 18.63 20.76 8.23 22.22 30.16
Administrative Expenses 21.50 18.00 16.32 8.98 18.23 30.13
Selling & Distribution Expenses 40.72 38.16 36.94 14.81 36.17 79.85
Miscellaneous Expenditure Written off 6.84 5.95 3.75 1.87 11.35 10.53
Interest 131.53 113.50 1.87 2.01 45.07 60.92
Depreciation 48.88 58.79 58.60 20.89 40.92 43.87
Total 939.06 820.43 668.41 330.95 858.51 1191.40
PROFIT/ ( LOSS) (115.57) (134.50) (20.51) 9.13 55.20 134.49
PRIOR PERIOD ADJUSTMENT (2.58) (0.92) (0.63) 0.02 0.06 0.37
PROVISION FOR TAXATION WRITTEN
BACK/ (PROVISION FOR TAXATION) 4.31 0.04 2.00 (10.51) (11.34)
REVERSAL OF DEFFERRED TAX ASSETS 6.43 - - (5.90) - -
FIXED ASSETS CAPITALISED IN EARLIER
YEARS WRITTEN OFF - - - (205.56) - -
EXTRAORDINARY INCOME/(LOSS) - - - - 55.03 (16.05)
AMOUNT AVAILABLE
FOR APPROPRIATION (107.41) (135.38) (19.14) (202.32) 99.78 107.47
APPROPRIATION
Capital Redemption Reserve - - - - - 2.00
BALANCE AFTER APPROPRIATION (107.41) (135.38) (19.14) (202.32) 99.78 105.47
BALANCE BROUGHT FROM PREVIOUS
YEAR 60.82 (46.59) (181.97) (201.11) (403.43) (303.65)
BALANCE CARRIED OVER TO BALANCE
SHEET (46.59) (181.97) (201.11) (403.43) (303.65) (198.18)
8
KEY FINANCIALS AT A GLANCE
BALANCE SHEET
(Rs. in Crores)
Particulars 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
(Six
months)
SOURCES OF FUNDS
Shareholders’ Funds
Equity Capital 154.67 154.67 154.67 154.67 154.67 192.70
Preference Share Capital 36.16 36.16 35.73 35.73 85.25 169.01
Amount to be converted into Preference - - 115.52 115.52 66.01 -
Shares
Share Application Money (Equity) - - 20.00 20.00 122.84 20.00
Reserves & Surplus 255.93 253.17 250.55 197.54 195.48 421.92
Total 446.76 444.00 576.47 523.46 624.25 803.63
Loan Funds
Secured Loans 728.13 864.13 830.40 850.46 978.71 871.06
Unsecured Loans 206.91 256.31 285.49 309.14 90.56 321.90
Total 935.04 1120.44 1115.89 1159.60 1069.27 1192.96
TOTAL LIABILITIES 1381.80 1564.44 1692.36 1683.06 1693.52 1996.59
APPLICATION OF FUNDS
Fixed Assets
Gross Block 856.51 859.72 865.25 610.41 613.82 638.81
Less: Depreciation 173.76 235.21 296.20 268.05 310.89 355.58
Net Block 682.75 624.51 569.05 342.36 302.93 283.23
Add: Capital Work-in Progress 68.56 68.61 69.33 69.45 79.84 295.86
Total Fixed Assets 751.31 693.12 638.38 411.81 382.77 579.09
Investments 6.88 6.89 6.88 6.88 7.88 1.38
Current Assets, Loans & Advances
Inventories 284.03 293.48 320.51 340.69 379.91 503.65
Sundry Debtors 296.93 377.43 375.40 406.88 490.83 608.70
Cash & Bank Balances 15.41 22.41 32.59 8.00 17.71 14.52
Loans & Advances 66.62 67.65 156.39 207.17 231.82 256.98
Total Current Assets 662.99 760.97 884.89 962.74 1120.27 1383.85
Less: Current Liabilities & Provisions
Current Liabilities 158.36 144.58 103.32 104.67 111.42 143.61
Provisions 2.28 2.08 - 1.43 11.83 23.24
Total Current Liabilities 160.64 146.66 103.32 106.10 123.25 166.85
Net Current Assets 502.35 614.31 781.57 856.64 997.02 1217.00
Miscellaneous Expenditure (not written off) 16.43 9.92 6.18 4.30 2.20 0.94
Profit & Loss Account 46.59 181.96 201.11 403.43 303.65 198.18
Defferred Tax Assets 58.24 58.24 58.24 - - -
TOTAL ASSETS 1381.80 1564.44 1692.36 1683.06 1693.52 1996.59
9
DIRECTORS’ REPORT
Your Directors are pleased to present the Seventeenth YEAR IN RETROSPECT
Annual Report and Audited Statement of Accounts for the
year ended 31st March 2007. Your company’s turnaround Your Directors are pleased to report that the company’s
and growth strategy combined with improved market upward trend in sales turnover and profitability has
conditions has yielded better results as can be observed continued consistently in the last three years. This is as a
from the comparative table below: result of major initiatives taken by your company to ensure
turnaround and growth. The prevailing optimistic textile
FINANCIAL HIGHLIGHTS industry scenario helped your company in consolidating
the gains. Through a combination of a revised product
(Rs. in lacs) mix in the consumer textiles segment and robust sales in
2006-2007 2005-2006 the luxury textiles, the management achieved better profit
margins. Your company hopes to wipe out its losses in the
1. Turnover 122954 88973 next two years thanks to the corporate debt restructuring
programme and the rebuilding of our strategics. The
2. Other Income 990 608 company has already entered the profit zone since 2004-
2005. The company is leaving no stone unturned in its
3. Profit from effort to emerge as a branded, retailing and distribution
Operations (PBIDT) 25019 15246 combine. The results evidence strong performance
Less: Interest 6092 4507 through the year.
Depreciation 4388 4092
Mis. Exp. w/off 1053 1135 Your company has spread its wings in every product
category, price segment and consumer level with well-
4. Profit before Tax 13486 5512 known brands like Reid & Taylor for suiting, Carmichael
House for Home Textiles, Belmonte for mid-price fabric
5. Provision for Taxation and fashion apparel, in addition to S. Kumars.
(On operating profit) 1134 518
Consumer Textiles: This division is continuously posting
6. Profit after Tax 12352 4994 a steady growth and can easily be considered as the
number one player in the organized sector with about
7. Extraordinary Items 35% market share. In Uniform segment, especially school
Restructuring gains - 5503 uniforms, S. Kumars enjoys an unparalleled recall and is
Less: tax provision synonymous with value for money.
thereon - 519 4984
Transfer of Assets Luxury Textiles: The company’s facility at Mysore for the
on Demerger (1605) - manufacture of worsted fabrics is at par with the best in
the world and the products are of highest possible quality
8. Amount available for available. The product has captured over 15% of the
appropriation 10747 9978 market share in this segment.

9. Appropriations: Ready to wear (RTW): As more and more Indian
Transfer to Capital Redemption consumers are looking forward to Ready-to-Wear
Reserve 200 - products, your company has planned substantial growth
Surplus / (Deficit) carried in the garments and apparel business. A broad range
to Balance Sheet (19818) (30365) of consumers in the Indian market are targeted: “Reid
& Taylor” brand in the premium segment and a newly
introduced “Belmonte” brand in the mid-price segment.
DIVIDEND Choosing of brand ambassadors has been done very
carefully – Amitabh Bachchan for “Reid & Taylor” and
Owing to the carried forward loss, your Directors are Shahrukh Khan for “Belmonte”.
unable to recommend payment of dividend on equity
capital and preference shares for the year ended 31st Home Textiles: In 2006, the company introduced
March 2007. “Carmichael House” with brand ambassador Sushmita
Sen (leading actress and one-time Miss Universe) for
10
home linen products, bath accessories and furnishing in CAPITAL EXPENDITURE AND GROWTH PLANS
the domestic market. The company expects this division
to grow and offer better profitability by finding support It is necessary for your company to prepare itself to meet
in the domestic middle and high-end segment. the challenges posed by competitiveness post-removal
of quota and demand-led domestic growth and also
The company’s exports which showed a lethargic trend in the wake of sizeable investment that is taking place
in the previous two years rose to Rs.33.03 crs. in 2006-07 currently in the industry. Hence the need to invest in
(previous year Rs.18.75 crs.) owing in no small measure to consolidation and growth plans given the turnaround
the overall growth in global textile trade. The performance already achieved.
would have been better but for capacity constraints and
better margins in the domestic market. However, when The company is taking the following growth initiatives:
we consummate our expansion plans in High Value Fine
Cotton (HVFC), Home Textiles and Garments categories, Consumer Textiles: Create value addition in existing
exports will form substantial percentage of company’s business by introducing premium blended suiting and
total sales in the coming three years. The post-quota consolidating Belmonte brand.
era has opened up the international market for exports
of ready-made garments, shifting significant capacity Luxury Textiles: Expand capacity from 4.8 mn to 8.4 mn
to India. The company has streamlined its exports metres in three phases to cater to expanding domestic
development portfolio on an organized basis and has and international markets.
set up a dedicated garmenting capacity in Bangalore for
exports under its “Total Wardrobe Solutions” business. Ready-to-Wear (TWS): Add manufacturing facility to
Presently the unit manufactures shirts and trousers. Suits complement distribution, brand building capabilities and
will be added later. Apparels add a lot of value to textiles exports – apparel enjoys a growth rate of over 20%.
and as our brand image is good, we should be able to cash
in on the increase in interest in this segment. Home Textiles: Capacity expansion, modernization and
technology upgradation to cater to high demand in the
CURRENT BUSINESS OUTLOOK AND PLANS post quota regime and consolidating brand Carmichael
House – there are only a few players in the organized
The company plans to continue its focus on the domestic segment which gives ample opportunity for growth.
market due to better profitability through strong branding,
distribution and retail. The domestic market is slated for High Value Fine Cotton: Set up capacity to cater to the
growth because of increase in purchasing power and a high margin, low competition category in the international
growing middle class ready to spend on themselves. The markets.
company has entered into a license agreement with U.K.
based Austin Reed group to introduce Stephens Brothers, Capital investment will be substantial. The company is
a formalwear brand in the super premium segment. The aiming at a substantial increase in sales turnover by the
current buoyant trend is expected to continue this year. year 2009-2010 with commensurate increase in operating
margins and profits.
Your company is going on a retail overdrive with plans
to launch multiple apparel, consumer and home textile It will be observed that the company has adopted a
brands over the next two years. Apparels and fabrics are focused growth strategy. Strategic initiatives have been
currently retailed under the Reid & Taylor brand in the taken in key domains like manufacturing, distribution,
premium segment and the flagship S. Kumars brand in brands and human capital. The retailing thrust would
the economy segment. Your company is trying to straddle enhance volumes and improve margins. In manpower,
various price segments in the fabric, apparel and home the management has consciously attracted top-quality
textile markets. talent both Indian and foreign to join the company.
Exclusive international brands introduced by your To finance the abovementioned growth plans, your
company into the retail sector through its subsidiary and company has successfully raised funds by way of Foreign
associate concern Brandhouse Retails Ltd. include Dunhill, Currency Convertible Bonds (FCCBs) of US Dollars
Escada and Stephens Brothers. The aim is to make a Total 50 million. The promoters of the company also infused
Wardrobe Solution available to the customers under one funds to the tune of Rs.122.84 crs. to finance the various
roof. growth plans and also to meet the requirement as per CDR
package. Recourse will also be had to term loans from
11
Banks and FI’s under Textile Upgradation Funds (TUF) PROPOSED ACQUISITION OF US HOME TEXTILES
scheme of the Govt. of India, for which applications have COMPANY
been made and are under process.
Members are aware that approval was obtained at the
PROPOSED DEMERGER OF SUBSIDIARY COMPANY EOGM on 9th November 2006 to invest upto US $ 40
million in a U.S. subsidiary for the purpose of business
Brandhouse Retails Limited (BHRL), a 100% subsidiary acquisitions. Accordingly, a company by the name of
of your company, started functioning from June 2004, Sansar Holdings Inc was incorporated in the State of
primarily for carrying out retail sales of products of Delaware, USA on 13th November 2006. Negotiations for
various brands viz. “Reid & Taylor”, “Carmichael House”, acquiring a Home Textiles designing and distribution
“Belmonte” which are manufactured by your company. company in the U.S. are at an advanced stage.
BHRL also retails men’s fashion accessories and has
tailoring facilities in some of the retail stores. BHRL has SHARE CAPITAL
established exclusive stores for these brands in various
parts of the country. Part of these stores is franchisee Members are aware that your company had successfully
and part company-owned. Plans for opening stores for placed Foreign Currency Convertible Bonds (FCCBs) upto
foreign premium luxury brands like Escada (already 2 US $ 50 million (approx. Rs.223 crs.) in April 2006 at a
shops opened), Dunhill, Stephens Brothers, etc. are in coupon rate of 2% p.a. with large international investors.
the pipeline. BHRL has planned to establish extensive The conversion price was Rs.57 per share. As at 31st March
network of exclusive retail outlets for your company 2007, FCCBs upto US $ 19 million have been converted into
brands in the next three years. equity shares of your company and conversion of further
FCCBs of US $ 11 million is currently under process.
In order to further its business plans, BHRL would need Further, as approved by the members at the EOGM on 9th
requisite funding, primarily equity type funds including November 2006 Qualified Institutional Placements (QIPs)
strategic investment by private equity players. Retail of Rs.179.81 crs. were raised which converted into equity
business has higher valuation multiples than textiles share capital of Rs.23.05 crs. at a price of Rs.78 per share.
manufacturing. Since BHRL is a 100% subsidiary and is The increase in the paid up capital of your company is as
not listed, your company was unable to get any higher a result of conversion of FCCBs, raising of QIPs and issue
valuations normally associated with retail business. A of Redeemable Preference Shares (0.01%) of Rs.100 each
demerger of the retail business from the wholly-owned at par to several lenders against interest and other dues in
subsidiary into a separate company was therefore accordance with CDR package. The promoters have also
suggested and considered by your company’s Board. invested a further sum of Rs.5.43 crs. towards 0% interest
FCDs to be issued.
As an initial step, as advised by our investment bankers
and solicitors, the retail business of BHRL has been
acquired by SKNL at book value at cut-off date 31.12.2006. FAMILY REORGANISATION
The acquisition was done as a precursor to the subsequent
demerger of the retail business into a separate company, Owing to an amicable reorganization in the Kasliwal
in order to facilitate listing of the resulting company. The family during the year, Shri Nitin Kasliwal and his
Swap ratio as determined by two reputed independent immediate family owned companies will now own the
accounting firms is arrived at 5:1, i.e. for every 5 shares majority share (over 70%) of the promoters shareholding
of SKNL, its shareholders will get 1 share of the resulting in your company.
company BHRL.
CORPORATE GOVERNANCE
Necessary approval for the demerger proposal from the
secured lenders of your company has been obtained at To comply with the conditions of Corporate Governance,
the CDR Empowered Group meeting on 7th May 2007. pursuant to Clause 49 of the Listing Agreement with
On receipt of approval / NOC from the relevant Stock the Stock Exchanges, a separate section on Management
Exchanges, the company will approach the High Court for Discussion and Analysis and Corporate Governance
sanctioning the Scheme of Arrangement for the demerger. together with a certificate from the Company’s Auditors
A meeting of the members of the company will be called confirming compliance is included in the Annual Report.
for approving the Scheme. The demerger will take place
from the appointed date, i.e. 1st January 2007, when the
High Court approval is received and filed with the ROC.
12
DIRECTORATE your Directors make the following statement in terms of

Section 217 (2AA) of the Companies Act, 1956:
In accordance with the Companies Act 1956 and the
company’s Articles of Association, Col. S.K. Raje and Shri 1) that in the preparation of the Annual accounts the
Govind Mirchandani retire by rotation and being eligible applicable accounting standards have been followed
offer themselves for reappointment. During the year, along with proper explanations relating to material
Shri Anil Channa, Shri Vijay G. Kalantri and Smt. Jyoti departures, if any;
N. Kasliwal were appointed as Additional Directors to
hold office upto the date of the Annual General Meeting. 2) that such accounting policies have been selected and
Shri Anil Channa was subsequently appointed as Deputy applied consistently, and judgments and estimates
Managing Director w.e.f. 12th January 2007. The Board have been made that are reasonable and prudent
also approved the reappointment of Shri Nitin S. Kasliwal so as to give a true and fair view of the state of
as Vice Chairman and Managing Director for a term of affairs of the company as at 31st March, 2007 and of
five years commencing from 1st April 2007. Members’ the profit and loss account of the company for the
approval to above appointments will be obtained in the year ended on that date;
forthcoming Annual General Meeting of the company.
3) that proper and sufficient care has been taken for
During the year Shri Ambuj A. Kasliwal and Shri the maintenance of adequate accounting records in
Mukul S. Kasliwal who were Non-executive promoter accordance with the provisions of the Companies
Directors resigned from the Board pursuant to business Act, 1956 for safeguarding the assets of the company
reorgnaisation amongst the family members of the and for preventing and detecting fraud and other
promoters. The Board at its meeting held on 30th December irregularities;
2006 placed on record the valuable assistance received by
your company during their tenure as Directors. 4) that the annual accounts have been prepared on a
going concern basis.
IFCI Ltd. vide their letter dated 7th November 2006
nominated Shri A. K. Choudhary, General Manager, IFCI DEPOSITS
Ltd., New Delhi as its Nominee Director on the Board of
our company, vice Shri Sanjeev Ghai. The Board appointed Fixed deposits received from the shareholders and the
Shri A. K. Choudhary as IFCI’s Nominee Director with public stood at Rs. Nil as on 31st March 2007 (previous
effect from 30th December 2006. The resignation of Shri year Rs. Nil). Deposits of Rs.3.37 lacs from 34 depositors
G. A. Nayak, Nominee Director of UTI, because of which fell due for payment before the close of the financial
preoccupation, was accepted by the Board with effect year remained unclaimed by the depositors. There is no
from 14th September 2006. UTI vide their letter dated deposit or interest claimed but remained unpaid. All the
29th September 2006 nominated Ms. Silpita Guha, Vice claimed deposits with interest have been repaid in time.
President, as its Nominee Director vice Shri G. A. Nayak. Members are aware that the fixed deposit schemes have
The Board appointed Ms. Silpita Guha as UTI’s Nominee since been discontinued with effect from 1st April 2001,
Director with effect from 16th October 2006. Subsequently as benefits were not commensurate with administrative
vide letter dated 2nd February 2007, UTI withdrew the costs.
nomination of Ms. Silpita Guha as their Nominee Director
on your Company’s Board purportedly as the company PARTICULARS OF EMPLOYEES
has completed its OTS with UTI. Ms Guha’s resignation
was accepted and taken on record in the Board Meeting Information as per Section 217 (2A) of the Companies Act,
held on 3rd February 2007. The Board placed on record 1956 read with Companies (Particulars of Employees)
the guidance, support and advice given by Shri Sanjeev Rules, 1975, as amended forms part of this Report.
Ghai, Shri G. A. Nayak and Ms. Silpita Guha during However, as per the provisions of Section 219 (1) (iv) of the
their tenure as Directors. Your company looks forward Companies Act, 1956 the Report and Accounts are being
to the guidance and experience of the newly appointed sent to all shareholders of the company excluding the
Directors in achieving its objectives. statement of particulars of employees under Section 217
(2A) of the Companies Act. Any shareholder interested in
obtaining a copy of the said statement may write to the
DIRECTOR’S RESPONSIBILITY STATEMENT Secretary at the Registered Office of the Company.
To the best of their knowledge and belief and according

to the information and explanations obtained by them
13
CONSERVATION OF ENERGY, TECHNOLOGY The Auditors, Haribhakti & Co., Chartered Accountants,
ABSORPTION, FOREIGN EXCHANGE EARNINGS have furnished the required certificate under section
AND OUTGO 224 (1B) of the Companies Act, 1956 and are eligible for
reappointment.
Additional information required under the Companies
(Disclosure of particulars in the Report of the Board of
Directors) Rules, 1988 in respect of Conservation of Energy ACKNOWLEDGEMENT
and Technology Absorption is given in the prescribed
forms A and B, which are given in Annexure ‘A’ to the Your Directors wish to place on record their appreciation
Directors’ Reports. For details in respect of the Foreign for the continued support and cooperation by financial
Exchange Earnings and Outgo, please refer to Note Nos. institutions, banks, government authorities, business
25 to 26 of Schedule ‘P’. associates and other stakeholders. Your Directors
acknowledge particularly the efforts put in by the
CONSOLIDATED FINANCIAL STATEMENT Company’s employees at all levels for their dedicated
service. Yours Directors also thank all shareholders for
As described in the earlier paragraph on “Proposed their confidence and support.
Demerger Of Subsidiary Company”, the Brandhouse
Retails Ltd. (BHRL) will cease to be a subsidiary of
the Company and the demerger will take place w.e.f.
01.01.2007, the appointed date. In view of this, the company
has given effect to the demerger in the books of accounts, On behalf of the Board
awaiting approval of the High Court of Judicature at
Bombay. Since BHRL will cease to be a subsidiary as on
reporting date 31.03.2007, we have been advised, the
accounts of the BHRL need not be consolidated with the
Annual Accounts of the Company. Dr. A. C. Shah
Chairman
AUDITORS Place : Mumbai
In schedule “P” Notes to accounts, point no. 3, explains
the Auditors’ qualification on “Restructured Financial
Costs”.
As provided in the CDR package approved by the
lenders vide letter dated 19th October, 2004, the company
has been allowed by the lenders to convert all financial
charges and interest up to 31.03.2005 as well as the
net present value of the future differential interest on
restructured debts to zero coupon bearing bonds/funded
interest/preference shares. These are repayable to the
lenders during the years 2014 to 2020 resulting in long
term benefits to the company. Such financial charges, in
the opinion of the management, are not costs pertinent
to the period in question and hence not charged to Profit
and Loss Account in the respective years and therefore
have been transferred to “Restructured Financial Costs”
which cumulatively amounts to Rs.119.91 crs (previous
year Rs.125.49 crs). These amounts are shown in Schedule
“F” carried under the head “Loans and Advances” to be
amortised over the restructuring period. The Company
has also taken into account during previous year gains
of Restructuring and One Time Settlement with some of
the lenders amounting to Rs.43.60 crs on mercantile basis
though some of the amounts are yet to be settled.
14
ANNEXURE ‘A’ TO DIRECTOR’S REPORT
FORM A
Form for Disclosure of particulars with respect to conservation of Energy

POWER AND FUEL CONSUMPTION
1 ELECTRICITY Current year Previous year
A) Purchase:
Units in lacs 131.16 80.79

Total Amount Rs. lacs 575.91 344.69
Rate/ Units Rs. 4.39 4.27
B) Own generation
Through Diesel generator
Units (D.G Units) in lacs 228.84 214.26
Unit /Ltr of Diesel Oil 4.12 2.49
Cost /Unit Rs. 4.60 3.62
2 CONSUMPTION PER UNIT OF PRODUCTION
Electricity per meter of fabrics (units) 0.37 0.37

Others (specify) - -
FORM B
Form for Disclosure of particulars with respect to Technology Absorption

RESEARCH & DEVELOPMENT (R&D)
1) Specific areas in which R&D carried out by the Company Product research is carried out on an
ongoing basis.
2) Benefit derived as a result of above R&D Improved product quality.
3) Future plan of action same as above.
4) Expenditure on R&D Not identified separately.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION The Company has absorbed the technology
of manufacturing exclusive worsted suitings.
15
MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure and Developments playing field between the organized and the unorganized
sector, fiscal reforms to boost production, extension of
The Indian economy has not only entered a new phase of Technology Upgradation Fund scheme with enhanced
high growth path, but has also emerged as one of the global funds allocation and creation of Special Economic Zones.
economic superpowers. In a report on India’s consumer
market published on May 3rd, the consultants at McKinsey The Indian apparel industry needs to expand, innovate
have argued that assuming annual growth averages 7.3% and become a big player to achieve the economies of scale.
over two decades – a reasonable bet - India may overtake Strategy should involve value creation by innovation in
Germany as the world’s fifth-biggest consumer market design, installation of latest production procedures and
by 2025. It predicts the middle class will expand from 5 concerted marketing efforts.
crores to 58 crores, leaving only a fifth of Indians in the
bottom household-income bracket. Businesses across It has been the company’s endeavour to be present in all
all industries will see growth. The opportunities will be product categories in the textile segment and bring the
greatest among the more affluent by 2025, consumption best in this segment to the Indian customers.
will be dominated by the middle class to the tune of 59%,
and the rich accounting for 20%. In line with the trend, growth and diversification have
been the two key focus areas at the company this year.
According to a study by CRISIL for CITI (Confederation Today, our company is the only Indian textile major
for Indian Textile Industry), the domestic household to operate in all fiber categories (natural, man-made
market growth will be driven by a rise in penetration and blended), all product categories (fabric, apparel
of organized retail, favorable demographics and rising and home textiles) and offers products catering to all
consumption and income levels. In order to achieve the segments of the Indian society. These continue to be our
desired growth, the production output of the textile company’s inherent strengths, giving us a competitive
industry would need to double by 2012 from the current edge. Moreover, the company has strategically positioned
level. To achieve this target, it calls for an investment to the itself as a strong domestic player. The growing domestic
tune of Rs.194,000 crores during 2007-2012. Consequently, demand has provided the company a large market base
the industry could generate additional employment for and given the opportunity to push and establish its brands.
14 million persons. The domestic market has also permitted the company to
enjoy greater margins as compared to low / poor margins
The very strong growth of the economy has also on exports and has also sheltered the company from any
created conditions for a rapid increase in the domestic adverse effects of dollar depreciation with the rupee.
consumption of textile products with some professional
estimate putting a growth quantum of almost Rs.65000 Business Review: Product-wise Performance
crores in the next three years (2008-10) period.
The company has a strong presence in the textile industry
Opportunities / Threats / Challenges with well-established brands. It aims to be amongst
the top three players in every chosen area of operation.
Even in the post-quota regime, India’s contribution is The company has organized its business into Strategic
quite low to a large international market. Developed Business Units, which are:
markets are looking at India as the alternative to China
for textiles and apparel imports. Consumer Textiles (Blended and Uniform fabrics)
Home Textiles (Total Home Expression)
India, as a country, has some clear advantages in terms
of resources, which makes it compete internationally. The Luxury Textiles (Worsted and Natural fiber
country is the third largest cotton producer and cotton, suitings)
of various staples, is available in abundance. Skilled and Ready-to-Wear (Total Wardrobe Solutions)
cheaper manpower coupled with an established textile
Group Company
industry are other advantages. These factors make India
(Associate company)
and its products competitive.
Brandhouse (International Retail
The Government of India has embarked on a series of Experience)
initiatives that will further boost the performance of the
Indian textile and apparel industry. The government’s
textile-friendly policies include dereservation of a
substantial portion of the industry thereby creating a level
16
A brief review of these SBUs is given hereunder: launched its premium range of ready to wear garments
under the brand “Reid & Taylor”. We are the only garment
Blended and Uniform fabrics company to offer Total Wardrobe Solutions.
The manufacturing facilities are located at Dewas. Some Brandhouse Retails Ltd.
part of the production is outsourced. The workwear
polyester / viscose fabrics are used by industries, hospitals, This entity was established as a result of our company’s
navy, schools and offices. The division also caters to initiative in the Retail Sector. Strong retail presence is
the premium blended fabrics for daily wear under the key for the future. Its core activity is retailing of textiles
‘S.Kumars’ brand. and apparel fashion wear and fashion accessories. The
portfolio includes setting up of exclusive stores for our
The company has a market share of 8% in the Blended company’s brands as well as international brands through
Suiting business and 35% in the Workwear and Uniform licensee / franchisee arrangements. A number of stores
fabrics business of the organized sector. The company are being opened during the year.
has undertaken strengthening of the design department
to introduce more market friendly designs. Growth prospects
The company has also undertaken measures with the Each of the divisions has significant growth potential.
objective of improving the productivity and operational The company has formulated specific growth-oriented
efficiencies. There is a consumer shift towards branded strategies for each SBU in the coming year. The company
fabrics. A new brand BELMONTE for the middle segment is currently implementing establishment of High Value
has been successfully launched. Fine Cotton shirtings project and setting up a new Home
Textiles plant at Jhagadia, near Bharuch in Gujarat State.
Total Home Expression Expansion of capacity in the luxury suitings (worsted
suitings) and focused growth in Ready-to-Wear garments
This division has two manufacturing facilities both located business targetted at a broad range of consumers in
at Dewas, which produce Grey Cotton Sheeting fabric for the Indian market are other initiatives that will ensure
the domestic market. Home textiles like Cotton jacquard substantial growth in sales turnover and profitability
and Damask fabrics used for home furnishings are of the company. Additionally, a strong retail network of
exported. The performance of the unit will be enhanced company – owned exclusive stores, franchisee stores,
by value addition and product mix change. multi-brand outlets (MBOs) and large format stores
spread throughout the country planned by the company’s
The division has planned an entry in the Made Ups associate concern Brandhouse Retails Ltd. will provide
business with its new brand Carmichael House wherein extensive visibility to the various brands of the company.
it uses own fabrics as well as outsourced fabrics, which
are not possible to manufacture in-house. India has a Financial Performance
clear advantage in Made Ups exports to US and Europe
in the post-quota period as Grey fabric (wide width) is The company is implementing its business strategies
abundantly available, as well as processing facilities and to achieve its long term goals. It is also taking several
sewing capabilities. measures for improved operational efficiencies of its
plants and increased productivity per employee. A
Worsted Fabrics substantial portion of the growth plans is being financed
through equity related investments (FCCBs and Promoters
This division has a state-of-the-art manufacturing facility contribution) thereby improving the debt equity ratio as
near Mysore. Capacity utilization was maintained at 90%. well as strengthening the cashflow of the company. In
The division manufactures wool-polyester blended and fact, the incremental earnings arising out of the growth
100% worsted fabrics (fine and superfine varieties) under plans will strengthen servicing of debt.
the “Reid & Taylor” brand. The worsted fabrics already
have a market share of 15% in India. Risks and Concerns
Operating margins continued to remain fairly healthy. The The domestic, regional and global economic environment
thrust on retail outlets will enhance value realization. directly influences the consumption of textile products.
Any economic slowdown can adversely impact demand-
Total Wardrobe Solutions (Ready to Wear) supply dynamics and profitability of all industry players
including our company.
The manufacturing activity is partly outsourced. Ready
to Wear garments include shirts, trousers, casuals, ties for However, with some exception, the company’s
the men’s segment. Suits will be added. The company has operations have historically shown significant resilience
17
to the fluctuations of economic and industry cycles. The Cautionary Statement

company’s diverse product portfolio and broad product
mix basket is an added asset, providing a buffer against Statements made in this report in describing the
market fluctuations. company’s objectives, projections, estimates, expectations
or predictions may be “forward-looking statements”
Adequacy of Internal Control within the meaning of applicable securities laws and
regulations. Forward-looking statements are based on
The Company has a proper and adequate system of certain assumptions and expectations of future events.
internal controls to ensure that all assets are safeguarded The company cannot guarantee that these assumptions
and protected against loss from unauthorized use or and expectations are accurate or will be realized by
disposition, and that transactions are authorized, recorded the company. Actual results could differ materially
and reported correctly. from those expressed in the statement or implied due
to the influence of external and internal factors, which
The internal control systems are supplemented by an are beyond the control of the company. The company
extensive programme of internal audits, reviews by assumes no responsibility to publicly amend, modify or
management and documented guidelines and procedures. revise any forward-looking statements on the basis of any
The internal control systems are designed to ensure that subsequent developments, information or events.
the financial and other records are reliable for preparing
financial statements and other data and for maintaining
accountability of assets.
18
AUDITORS’ REPORT
TO THE MEMBERS OF S. KUMARS NATIONWIDE LIMITED
1. We have audited the attached Balance Sheet of S. (a) We have obtained all the information and
KUMARS NATIONWIDE LIMITED as at March explanations, which to the best of our
31st, 2007, the related Profit and Loss Account for the knowledge and belief were necessary for the
year ended on that date and also the Cash Flow purposes of our audit;
Statement for the year ended on that date annexed
thereto, which we have signed under reference to (b) In our opinion, proper books of accounts, as
this report in which are incorporated the accounts of required by law have been kept by the
Weaving Division at Dewas, Madhya Pradesh, Company, so far as it appears from our
audited by other Auditor, whose report has been examination of those books;
considered by us. These financial statements are
the responsibility of the Company’s Management. (c) The Balance Sheet, Profit and Loss Account and
Our responsibility is to express an opinion on these Cash Flow Statement dealt with by this report
financial statements based on our audit. are in agreement with the books of account;
2. We have conducted our audit in accordance with (d) In our opinion, the Balance Sheet, Profit and
auditing standards generally accepted in India. Loss account and Cash Flow Statement dealt
Those standards require that we plan and perform with by this report comply with the accounting
the audit to obtain reasonable assurance about standard referred to in Section 211 (3C) of the
whether the financial statements are free of material Act, except that the accumulated interest and
misstatement. An audit includes examining, on a financial charges amounting to Rs.107.55 crores
test basis, evidence supporting the amounts and (including Rs.3.40 crores for the current year)
disclosures in the financial statements. An audit and future differential interest on Restructured debts
also includes assessing the accounting principles on NPV basis amounting to Rs.12.36 crores have
used and significant estimates made by been carried forward under the head “Restructured
Management, as well as evaluating the overall Financial Cost” as a part of Loans and Advances
financial statement presentation. We believe that and not charged off to the respective years Profit &
our audit provides a reasonable basis for our Loss Account, which is not in conformity with AS-5
opinion. – “Net Profit or Loss for the period, Prior Period
items and Changes in Accounting Policies”.
3. As required by the Companies (Auditors’ Report)
Order, 2003, as amended by the Companies (e) On the basis of written representations received
(Auditors’ Report) (Amendment) Order 2004 from the directors of the Company as on March
(together the ‘Order’), issued by the Central 31, 2007 and taken on record by the Board of
Government of India in terms of Section 227 (4A) of Directors of the Company and on the basis of
the Companies Act, 1956 (the Act), and on the basis information and explanation given to us, we
of such checks of the books and records as we report that none of the director is disqualified
considered appropriate and the information and as on 31st March 2007 from being appointed as
explanations given to us during the course of the a director in terms of clause (g) of sub-section
audit, we annex hereto a statement on the matters (1) of Section 274 of the Act.
specified in paragraphs 4 and 5 of the said Order.
(f) We invite attention to Note no.12 of Schedule
4. Further to our comments in the Annexure referred “P” regarding treatment of demerger of retail
to in paragraph 1 above, we report that: business of the Company given in the books of
19
accounts and approval of the scheme by the (a) in the case of the Balance Sheet, of the state
High Court is pending. of affairs of the Company as at March 31,
2007;
(g) We further report that pending confirmation from
lenders/completion of process of One Time (b) in the case of the Profit and Loss Account,
Settlement with them, a sum of Rs.43.60 crores was of the Profit for the year ended on that
credited as extraordinary income in the accounts of date; and
the year 2005-06.
(c) in the case of the Cash Flow Statement, of
(h) In our opinion, and to the best of our the cash flows for the year ended on that
information and according to the explanations date.
given to us, the said accounts read with Note
no. 12 of Schedule “P” and the other notes
thereon in Schedule “P”, give the information For Haribhakti & Co.
required by the Act, in the manner so required. Chartered Accountants
(i) In view of our comments in paragraph 2(d) and (g)

above, accumulated losses are understated by
Rs.163.51 crores, borrowings are understated by Manoj Daga
Rs.43.60 crores and Loans and Advances are Place : Mumbai Partner
overstated by Rs.119.91 crores, subject to this, the Date : May 10th 2007. Membership No.048523
said accounts give a true and fair view in
conformity with the accounting principles
generally accepted in India:
20
ANNEXURE TO AUDITORS’ REPORT
(Referred to in paragraph 1 of our report of even date to loan, secured or unsecured, to companies, firms
the members of S. Kumars Nationwide Limited on the or other parties listed in the Register
accounts for the year ended March 31, 2007) maintained under Section 301 of the Act.
1. (a) The Company has generally maintained proper (b) According to the information and explanation
records showing particulars including given to us, the Company has not taken any
quantitative details and situation of its fixed loan, secured or unsecured, from companies,
assets. firms or other parties listed in the Register
maintained under Section 301 of the Act.
(b) As explained to us, fixed assets have been
physically verified by the management during 4. In our opinion and according to the information and
the year in a phased periodical manner, which explanations provided to us, internal control
in our opinion is reasonable, having regard to procedures are commensurate with the size of the
the size of the Company and nature of its Company and the nature of its business for the
assets. No material discrepancies were noticed purchase of inventory, fixed assets and for the sale
on such verification. of goods and services. During the course of our
audit, we have not observed nor have been
(c) The Company has not disposed off substantial informed of any continuing failure to correct major
part of its fixed assets during the year. weaknesses in internal controls.
2. (a) As explained to us, inventories with the 5. (a) In our opinion and according to the information
Company have been physically verified by the and explanations given to us, the particulars of
management at regular intervals during the contracts or arrangements that need to be
year and in respect of inventories lying with entered in the register maintained under section
third parties, we have relied upon written 301 of the Act have been so entered.
representations received from the management.
(b) In our opinion, and according to the
(b) In our opinion and according to the information information and explanations given to us,
and explanations given to us, the procedures the transactions made in pursuance of contracts
of physical verification of inventory followed or arrangements entered in the register
by the management are reasonable and maintained under Section 301 of the Act
adequate in relation to the size of the Company exceeding the value of rupees five lacs in
and the nature of its business. respect of any party during the year have been
made at prices which are reasonable having
(c) On the basis of our examination of records of regard to the prevailing market prices at the
inventory, we are of the opinion that, the relevant time.
Company is maintaining proper records of
inventory. The discrepancies noticed on 6. The Company has not accepted any deposits from
verification between physical stocks and book Public within the meaning of Section 58A, 58 AA
stocks were not material and the same have or any other relevant provisions of the Act or the
been properly dealt with in the books of rules framed there under.
accounts.
7. In our opinion, the internal audit system of the
3. (a) According to the information and explanation Company is commensurate with its size and nature
given to us, the Company has not granted any of its business.
21
8. We have broadly reviewed the books of account 10. Subject to observation made in para 2(i) of the main
maintained by the Company pursuant to the rules report, the Company has accumulated losses at the
made by the Central Government for the end of the financial year which is not more than 50%
maintenance of cost records under Section 209 (1) of its net worth as on 31st March 2007. The
(d) of the Act, in respect of the Company’s product Company has not incurred any cash losses during
to which the said rules are made applicable, and are the current financial year and also during the
of the opinion that prima facie, the prescribed immediately preceding financial year.
accounts and records have been made and
maintained. We have, however, not made a detailed 11. The Company has not defaulted in repayment of
examination of the records with a view to determine dues to banks, financial institutions and debenture
whether they are accurate or complete. holders though there are delays on certain
occasions.
9. (a) According to the records of the Company,
undisputed statutory dues including Provident 12. As explained to us, the Company has not granted
Fund, Investor Education and Protection Fund, any loans or advances on the basis of security by
Employees State Insurance, Income Tax, Sales way of pledge of shares, debentures or any other
Tax, Wealth Tax, Customs Duty, Excise Duty, securities.
Service Tax, Cess and other statutory dues have
been generally regularly deposited with the 13. In our opinion, the company is not a chit fund or
appropriate authorities, except in the following a nidhi /mutual benefit fund/society. Therefore,
cases where it has remained outstanding for the clause 4(xiii) of the Companies (Auditor’s Report)
period more than six months from the date they Order, 2003 is not applicable to the Company.
become payable.
14. The Company has not dealt or traded in shares,
Nature of Dues Amount (Rs) securities or debentures. In respect of investments,
Excise Duty 22,46,378 the Company has maintained proper records and all
Service Tax 21,23,062 the investment are held by the Company in its own
name except to the extent of exemption granted
Income Tax 4,65,70,000
under section 49 of the Act.
(b) According to the information and explanations
15. According to the information and explanations
given to us, there were no dues of Income Tax,
given to us and the representations made by the
Customs Duty, Wealth Tax, Service Tax, Excise
management, the Company has given guarantee for
duty, Sales tax and Cess that have not been
loans taken by others from bank or financial
deposited with on account of any dispute
institutions, the terms & condition whereof are not
except as mentioned below.
prejudicial to the interest of the company.
Nature of Period Amount Forum

16. According to the information and explanation given
Dues (Rs)
to us, in our opinion, the term loans were applied
Service Tax 2005-06 1,09,000 Asst Com-
missioner of for the purpose for which they were obtained.
Excise and
Service Tax 17. Based on the information and explanations given to
Entry Tax 2006-07 46,85,474 Appeal is us, and on an overall examination of financial
pending statements of the company, in our opinion, short
before State term funds have not been utilized for long term
Government purposes.
22
18. During the year, the Company has not made any Company has been noticed or reported during the
preferential allotment of shares to parties and course of our audit.
companies covered in the Register maintained
under Section 301 of the Act.
For Haribhakti & Co.
19. According to the information and explanation given Chartered Accountants
to us, the Company has created charge on its assets
in favour of debenture holders.

20. The company has not raised any money by issue of Manoj Daga
any shares/securities to public during the year. Place : Mumbai Partner
Dated: May 10th 2007 Membership No.048523
21. In our opinion and according to the information and
explanations given to us, no fraud on or by the
23
BALANCE SHEET AS AT 31st MARCH, 2007
(Rs. in lacs)
Schedule Current Year Previous Year
As at 31.03.2007 As at 31.03.2006
SOURCES OF FUNDS
Shareholders’ Funds:
Share Capital A 36,172.01 23,991.55
Amount to be converted into Shares 2,000.00 18,885.36
Reserves & Surplus B 42,191.53 80,363.54 19,548.29 62,425.20

Loan Funds: C
Secured Loans 87,105.92 97,871.20
Unsecured loans 32,189.52 119,295.44 9,055.81 106,927.01

Total 199,658.98 169,352.21

APPLICATION OF FUNDS
Fixed Assets D
Gross Block 63,881.72 61,382.32
Less : Depreciation/Amortisation 35,558.36 31,089.44
Net Block 28,323.36 30,292.88
Add: Capital work-in-progress including 29,586.05 57,909.41 7,984.69 38,277.57
capital advances
Investments E 138.28 788.23

Current Assets, Loans And Advances F
Inventories 50,365.35 37,991.32
Sundry Debtors 60,870.04 49,083.03
Cash and Bank Balances 1,451.56 1,771.33
Loans, Advances and Deposits 25,697.63 23,181.63
Total .. (I) 138,384.58 112,027.31
Less: Current Liabilities & Provisions G
Current Liabilities 14,360.76 11,133.85
Provisions 2,324.14 1,191.72
Total .. (II) 16,684.90 12,325.57

Net Current Assets (I) - (II) 121,699.68 99,701.74
Miscellaneous Expenditure 93.82 219.74
(To the extent not written off or adjusted)
Profit & Loss A/C 19,817.79 30,364.93
Total 199,658.98 169,352.21
Significant Accounting Policies. O
Notes Forming Part of Accounts P
As per our report of even date For and on behalf of the Board
For Haribhakti & Co.,
Chartered Accountants DR. A. C. SHAH Chairman

N. S. KASLIWAL Vice-Chairman and Managing Director
Manoj Daga
Partner L. N. SOMANI Company Secretary
Place : Mumbai J. S. SHETTY CFO and President - Finance

Date : May 10th 2007
24
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2007
(Rs. in lacs)
Schedule Current Year Previous Year
ended on ended on
31.03.2007 31.03.2006
INCOME
Sales and service charges 122,953.98 88,972.66
Other Income H 990.17 607.95
Increase/(decrease) in stock I 8,645.13 1,790.18
Total 132,589.28 91,370.79
EXPENDITURE
Raw materials consumed/ Fabric purchases J 88,683.58 64,071.42
Manufacturing expenses K 4,909.87 4,384.44
Payment to & for employees L 3,016.15 2,221.95
Administrative expenses M 3,013.14 1,822.65
Selling and distribution expenses N 7,984.58 3,616.72
Misc Expenditure and Restructured
Financial Cost written off 1,052.63 1,135.50
Interest and Financial Charges 6,092.39 4,506.61
Depreciation/Amortisation D 4,387.51 4,091.85

Total 119,139.85 85,851.14
Profit/(Loss) before Tax 13,449.43 5,519.65
Prior period (expenses)/income 37.22 5.83
Provision for Tax
Current Tax (1,035.00) (1,037.22)
Wealth Tax (2.58) (1.33)
Fringe Benefit Tax (48.99) (21.05)
Taxation for earlier years (47.82) 8.66
Profit/(Loss) Before Extraordinary items and other Adjustments 12,352.26 4,474.54
Extraordinary Income - 5,503.04
Transfer of Assets on Demerger (1,605.12) -
Profit available for Appropriation 10,747.14 9,977.58
Appropriation:
Transfer to Capital Redemption Reserve 200.00 -
Balance Brought forward from previous year (30,364.93) (40,342.51)
Balance carried over to Balance Sheet (19,817.79) (30,364.93)
Earnings Per Share before Extra ordinary items
- Basic Rs.7.39 Rs.3.23
- Diluted Rs.5.56 Rs.3.06
Earnings Per Share after Extra ordinary items
- Basic Rs.6.43 Rs.6.45
- Diluted Rs.4.84 Rs.6.13
Significant Accounting Policies O
Notes Forming Part of Accounts P

Manoj Daga

25
SCHEDULE FORMING PART OF ACCOUNTS
(Rs. in lacs)
Current Year Previous Year
As at 31.03.2007 As at 31.03.2006
SCHEDULE “A” - SHARE CAPITAL

Authorised Capital
28,00,00,000 Equity shares of Rs.10 each 28,000.00 23,000.00
(Previous Year 23,00,00,000)
1,80,00,000 Preference Shares of Rs 100 each 18,000.00 15,500.00
46,000.00 38,500.00
Issued And Subscribed Capital
19,27,03,316 Equity Shares of Rs.10 each fully paid up 19,270.33 15,467.08
36,15,660 6% Cumulative Redeemable Preference Shares of Rs.100 each 3,615.66 3,615.66
(Previous Year 36,15,660)
(Redeemable by 2013)
1,35,28,518 0.01% Redeemable Preference Shares of Rs.100 each 13,528.52 4,951.31
(Redeemable during 2017-2020)
36,414.51 24,034.05
Paid-Up Capital
19,27,03,316 Equity Shares of Rs.10 each fully paid up 19,270.33 15,467.08
35,73,160 6%Cumulative Redeemable Preference Shares of Rs.100 each
fully paid-up 3,573.16 3,615.66
Less: Repaid 200.00 3,373.16 42.50 3,573.16
1,35,28,518 0.01% Redeemable Preference Shares of Rs.100 each 13,528.52 4,951.31
fully paid-up
Total 36,172.01 23,991.55

SCHEDULE “B” - RESERVES AND SURPLUS
Securities Premium:
Balance as per last Balance Sheet 10,813.05 10,813.05
Add: On account of Qualified Institutional Placement 15,675.71 -
Add: On account of conversion of Foreign Currency
Convertible Bonds 7,040.60 33,529.36 - 10,813.05
Debenture Redemption Reserve 3,375.00 3,375.00
Capital Redemption Reserve:
Balance as per last Balance Sheet 3,726.84 3,726.84
Add: Transfer during the year 200.00 3,926.84 - 3,726.84

Revaluation Reserve: 1,633.40 1,838.54
Less: Transfer to Profit & Loss account representing
depreciation on revalued portion of the assets 274.58 205.14
Less: Revalued Portion of the Assets Sold 18.49 1,340.33 - 1,633.40

Capital Reserve:
Balance as per last Balance Sheet - -
Add: On account of Redemption of Preference Shares 20.00 20.00 -

42,191.53 19,548.29

26
(Rs. in lacs)
As at 31.03.2007 As at 31.03.2006
SCHEDULE “C” - LOAN FUNDS

Secured Loans:
Working Capital Advances from Banks 35,518.44 31,337.21
Non-Convertible debentures - Privately placed
with Financial Institutions / Banks
(Reedemable by 2013) 5,518.50 10,143.28
Rupee Term Loans from Banks and Financial Institutions 26,571.24 33,248.08
Foreign Currency Term Loan 4,304.13 5,583.52
Equipment Finance Loans 392.93 326.69
Working Capital Term Loans from Banks 4,399.47 4,119.81
Zero Coupon Bonds/Funded Interest term loans:
- Working Capital Lenders 4,674.85 4,861.26
- Term Loans Lenders 5,726.36 8,251.35

87,105.92 97,871.20
Unsecured Loans:
Foreign Currency Loan from ANZ Bank, Frankfurt 3,013.31 3,390.22
(Hermes backed - Project Finance)
Zero Coupon Bonds/Funded Interest term loans
- Working Capital Lenders 1,503.90 1,503.90
- Term Loans Lenders 1,805.20 1,513.67
From Banks & Financial Institutions 1,583.01 2,648.02
2% Foreign Currency Convertible Bonds due in 2011 13,457.10 -
Contribution towards Fully Convertible Debentures 10,827.00 -
32,189.52 9,055.81

Notes:

A. Rupee Term Loans, Foreign Currency Term Loan and Non-Convertible Debentures privately placed with
financial institutions/banks etc. are secured by way of an equitable mortgage on immovable properties both
present and future, ranking pari passu among the lenders and by a first charge by way of hypothecation of
all the Company’s movables (save and except book debts) including movable machinery, machinery spares, tools
and accessories, present and future, subject to prior charges created in favour of Company’s Bankers on the stock
of raw materials, goods in process, finished and manufactured goods together with components and spares
towards security for working capital facilities. The Working Capital Advances, Rupee Term Loans and Foreign
Currency Term Loan are also secured by personal guarantees of some of the directors.

B. Equipment Finance Loans are secured by hypothecation of specific equipment / assets.

C. Working Capital Advances from Banks are secured by hypothecation of Company’s stocks and book-debts,
present and future and by a second charge on all the immovable properties of the company including plant and
machinery, machinery spares, tools and accessories and other movables both present and future.

D. Foreign Currency Loan from Export Import Bank of India is secured by unconditional and irrevocable
guarantees from such Banks whose working capital / term liability is replaced by this loan.
27

SCHEDULE “D” - FIXED ASSETS
(Rs.in lacs)
GROSS BLOCK DEPRECIATION NET BLOCK
ITEMS At the Additions Deductions Total At the Depreciation Deductions Total Net Block Net Block
Beginning during during the as at Beginning for the Year during the as at as at Previous
of the Year the Year Year 31.03.2007 of the Year Year 31.03.07 31.03.07 Year
01.04.06 01.04.06 31.03.2006
Land
Freehold Land 776.81 616.15 - 1,392.96 - - - - 1,392.96 776.81
Leasehold Land 392.84 - - 392.84 - - - - 392.84 392.84
Building 4,624.17 5.10 - 4,629.27 1,171.31 148.05 - 1,319.36 3,309.91 3,452.86
Plant & Machinery 53,943.84 1,483.25 258.04 55,169.05 29,222.17 4,359.92 170.29 33,411.80 21,757.25 24,721.68
Office Equipments 136.24 43.45 0.22 179.47 46.67 11.87 - 58.54 120.93 89.56
Computer 275.98 100.43 0.36 376.05 221.67 27.20 0.13 248.74 127.31 54.31
Furniture & Fixtures 606.17 256.35 33.36 829.16 239.28 42.08 5.02 276.34 552.82 366.89
Vehicles 597.03 300.27 33.15 864.15 185.07 64.22 17.72 231.57 632.58 411.96
Intangible Assets
System Development 29.24 19.53 - 48.77 3.26 8.75 - 12.01 36.76 25.98
Sub - Total 61382.32 2824.53 325.13 63881.72 31089.43 4662.09 193.16 35558.36 28323.36 30292.88
Work In Progress 7,984.69 22,344.96 743.60 29,586.05 - - - - 29,586.05 7,984.69
Grand Total 69367.01 25169.49 1068.73 93467.77 31089.43 4662.09 193.16 35558.36 57909.41 38277.57
Previous Year 67,986.17 1,683.21 302.38 69,367.01 26,805.02 4,296.98 12.57 31,089.44 38,277.57 41,181.15
Notes :-
1 Additions/(deductions)during the year includes Rs. 222.74 lacs on account of exchange variations on foreign currency loans. (Previous Year
(Rs.142.22 lacs)
2 Gross Block includes revalued fixed assets carried as on 30th September, 1997. The amounts are as under :-
a) Freehold Land Rs. 695.58 lacs Rs. 695.58 lacs
b) Building Rs. 642.83 lacs Rs. 642.83 lacs
c) Plant & Machinery Rs. 2484.50 lacs Rs. 2484.50 lacs
3 Depreciation charged for the year shown in the Profit & Loss Account is after deducting an amount of Rs.274.58 lacs withdrawn from
Revaluation Reserve (Previous Year Rs. 205.14 lacs)
4 Land at Mysore has been taken by the Company from the Karnataka Industrial Area Development Board ( lessor) for a period of 21 years
with a right to acquire the said land on the expiry of lease period provided the terms and conditions stipulated in the agreement are
complied with. In that event the lessor shall fix the price. Under these circumstances premium paid has not been amortized
28
(Rs. in lacs)
As at 31.03.2007 As at 31.03.2006
SCHEDULE “E” - INVESTMENTS

Long Term ( Non trade)
(fully paid up unless otherwise stated and at cost)
Quoted Investments:

Nil Equity shares of Landmarc Leisure Corporation Ltd. - 150.00
face value of Rs.10 each
(Previous year 15,00,000)

Nil Equity shares in Entegra Infrastructure Ltd. - 425.00

Nil Equity shares in Unitex Designs Ltd. - 75.00

Unquoted Investments:

National Savings Certificates and Indira Vikas Patra/ Others 0.50 0.45
1,481 Equity shares in Hindon River Mills Ltd 1.48 1.48
50,000 Equity shares of GBP 1.00 each in Reid & Taylor Ltd (U.K.) 36.30 36.30
10,00,000 Equity Shares of Rs.10 each in Brandhouse Retails Ltd 100.00 100.00
138.28 788.23

Note: Market value of quoted investments Rs. Nil ( Previous Year Rs.553 lacs)
Total unquoted investment Rs.138.28 lacs ( Previous Year Rs.138.23 lacs)
29

(Rs. in lacs)
As at 31.03.2007 As at 31.03.2006

SCHEDULE “F” - CURRENT ASSETS, LOANS & ADVANCES
Inventories
(as taken, valued and certified by the Management)
Raw materials 14,416.14 10,765.37
Semifinished fabrics 12,600.46 10,176.64
Finished fabrics, Garments and made ups 23,046.81 16,825.50
Stores, fuel and packing materials 259.46 188.85
Colours and chemicals 42.48 34.96
Total 50,365.35 37,991.32

Sundry Debtors
(Unsecured and considered good,unless otherwise stated)
Over six months considered good 11,941.51 12,458.14
Considered Doubtful 271.14 281.96
Outstanding for the period upto six months
Considered Good * 48,928.53 36,624.89
Sub Total 61,141.18 49,364.99
Less :Provision for Doubtful Debts 271.14 281.96
* Debtors due from companies in which some of the Directors are
interested Rs.1240.21 lacs
(Previous year Rs.662.32 lacs)
(Refer Note no.14 Schedule ‘P’)
Total 60,870.04 49,083.03

Cash and Bank Balances
Cash on hand 549.29 968.43
Balances with Banks:
In Current accounts 465.90 326.58
In Fixed Deposits 436.37 476.32

Total 1,451.56 1,771.33

Loans, Advances and Deposits
(Unsecured & Considered good except otherwise specified)
Advances recoverable in cash or kind for
value to be received * 12,945.74 10,132.45
Restructured Financial Cost /Prepaid Interest on NPV Basis** 11,991.13 12,549.42
CVDuty Deposit/ Modvat Receivable 252.24 268.33
Advance tax and Tax deducted at source 131.02 62.49
Deposits 397.12 188.56
Sub Total 25,717.25 23,201.25
Less : Provision for Doubtful Advances 19.62 19.62

Total 25,697.63 23,181.63

* Advances due from companies in which some of
the Directors are interested Rs.1047.62 lacs (Previous year
Rs.554.47)(Refer Note no.14 Schedule ‘P’)
** Please refer to Note No. 3 of Schedule ‘P’

Total of Current Assets 138,384.58 112,027.31

30

(Rs. in lacs)
As at 31.03.2007 As at 31.03.2006
SCHEDULE “G” - CURRENT LIABILITIES & PROVISIONS
(A) Current Liabilities:

On trade account:
Acceptances and Creditors for goods and expenses 13,230.24 10,003.02
Advances Received 385.24 194.34
Deposits received from dealers 166.57 160.18
Unclaimed Fixed Deposits 3.37 3.47
Other liabilities 575.34 14,360.76 772.84 11,133.85

(B) Provisions:
For Taxation 2,083.17 1,045.60
For Fringe Benefit Tax 106.33 9.76
For Gratuity 89.35 100.19
For Leave Encashment 45.29 2,324.14 36.17 1,191.72
16, 684.90 12,325.57

ended on ended on
31.03.2007 31.03.2006
SCHEDULE “ H” - OTHER INCOME

Balances written back 176.17 135.50
Export Benefits 84.04 114.03
Exchange Rate Fluctuation 0.04 10.58
Interest - Gross* 82.22 66.26
Lease rentals - 9.16
Miscellaneous Income 201.06 272.42
Profit on Sale of Assets 2.51 -
Profit on Sale of Investments 444.13 -
990.17 607.95
*(TDS on Interest Rs.15.15 lacs - Previous Year Rs.10.61 lacs)

SCHEDULE “ I” - INCREASE /(DECREASE) IN STOCK
Closing stock of :
Semi-finished Fabrics 12,600.46 10,176.64
Finished fabrics, Garments and made ups 23,046.81 35,647.27 16,825.50 27,002.14
Opening stock of :
Semi-finished Fabrics 10,176.64 6,711.65
Finished fabrics, Garments and made ups 16,825.50 27,002.14 18,500.31 25,211.96

Increase/(decrease) in stock 8,645.13 1,790.18

31

(Rs. in lacs)
ended on ended on
31.03.2007 31.03.2006
SCHEDULE “ J” - RAW MATERIALS CONSUMED/FABRIC PURCHASES

Opening stock 10,765.37 8,653.94
Add : Purchases 92,334.35 66,182.85
Less: Closing stock 14,416.14 88,683.58 10,765.37 64,071.42

88,683.58 64,071.42

SCHEDULE “K” - MANUFACTURING EXPENSES

Conversion charges 1,358.18 1,803.45
Excise duty 22.78 22.47
Freight and octroi 264.64 155.78
Water Power & fuel 1,995.97 1,502.89
Stores and Spares 586.75 435.23
Entry tax 30.16 64.70
Other materials/expenses 582.78 329.78
Insurance 68.61 70.14
4,909.87 4,384.44

SCHEDULE “L” - PAYMENTS TO & FOR EMPLOYEES
Salaries, Wages, Bonus & Allowances 2,648.50 1,959.99

Contributions to Provident Fund and other Funds 232.23 146.25
Contributions to Gratuity fund 61.35 73.21
Medical expenses reimbursed 46.12 27.89
Staff welfare expenses 27.95 14.61
3,016.15 2,221.95

32

(Rs. in lacs)
ended on ended on
31.03.2007 31.03.2006
SCHEDULE “M” - ADMINISTRATIVE EXPENSES
Rent, Rates & Taxes 210.75 40.26

Repairs and maintenance
- to buildings 20.55 16.51
- to machinery 23.03 17.20
- to others 94.53 138.11 46.76 80.47
Travelling expenses 326.64 419.42
Electricity charges 8.27 14.92
Vehicles maintenance 96.61 103.07
Directors’ Remuneration 163.55 54.98
Remuneration to Auditors
- Audit fees 17.12 11.24
- Tax Audit fees 2.86 1.76
- In other capacity 11.16 31.14 7.28 20.28
Bank charges & Upfront fees 547.67 237.13
Gifts and presents 1.97 15.99
Conveyance expenses 59.46 61.02
Legal & Professional charges 625.14 259.19
Listing fees 6.43 2.72
Facilities fees 72.50 103.35
Printing and stationery 112.72 54.01
Telephone expenses 74.63 59.54
Donation and Charity 27.01 0.81
Postage and telegrams 46.37 32.86
Sales tax 12.34 39.99
License and registration fees 63.12 93.74
Sundry balances written off 11.89 10.72
Loss on sale of assets 8.45 2.51
Service Tax 37.26 -
Exchange rate fluctuation 91.49 -
Loss on sale of Investments 49.43 -
Other miscellaneous expenses 190.19 115.67
3,013.14 1,822.65

SCHEDULE “N” - SELLING AND DISTRIBUTION EXPENSES
Dealers incentives 1,115.91 856.30

Discounts, Rebates and allowances 348.76 247.22
Publicity, Market survey & research 4,379.07 1,177.24
Commission and brokerage 608.60 421.64
Conference/Business promotion expenses 1,014.95 429.00
Bad Debts 3.98 41.49
Royalty 170.04 171.90
Other selling expenses 343.27 271.93
7,984.58 3,616.72

33
SCHEDULE ‘O’ SIGNIFICANT ACCOUNTING POLICIES FOR THE YEAR ENDED 31st MARCH, 2007
(A) Accounting Concepts:
The Company follows mercantile system of accounting and as such it recognises income and expenditure on
accrual basis. However, payments of Leave Travel Allowances and reimbursement of medical expenses to the
staff, being not material, are accounted on cash basis. The claims against the company are accounted on
acceptance basis. The accounts are prepared on historical cost basis, as a going concern and are consistent with
generally accepted accounting principles comply with the Accounting Standards issued by Institute of
Chartered Accountants of India, to the extent applicable.
(B) Fixed Assets:
(i) Fixed Assets are stated at their original costs net of Cenvat. Cost includes interest, financial charges,
freight, taxes and other incidental expenses incurred for acquisition and installation of the assets. Assets
revalued are stated at values determined by the valuers.
(ii) Assets include assets given on lease. In respect of assets taken on lease rentals are charged to revenue on
accrual basis.
(iii) Difference arising due to translation of period end balances of foreign currency loans is shown as addition
/deduction to the assets.
(iv) Impairment of assets:

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying
amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the
net selling price and the value in use determined by the present value of estimated future cash flow.
(C) Depreciation:
(i) Depreciation is provided on the straight-line method at the rates and in the manner specified in Schedule -
XIV to the Companies Act, 1956.
(ii) Depreciation on assets whose actual cost does not exceed Rs.5,000/- is provided at 100% of the cost as
specified in Schedule - XIV to the Companies Act, 1956.
(iii) Depreciation on assets covered by revaluation is provided on their respective revalued amount in the
manner stated in para (i) hereinabove. The difference between depreciation on assets based on revaluation
and that on original cost is adjusted from Revaluation Reserve.
(D) Capital Work-In-Progress:
Projects under commissioning and other capital work-in-progress are carried at cost, comprising direct cost,
related incidental expenses, interest and other financing costs payable on funds specifically borrowed to the
extent they relate to the period till assets are put to use.
(E) Inventories:
(i) Raw materials, packing materials, stores and spares, coal and fuel are valued at cost on First In First Out
basis.

(ii) Finished goods are valued at lower of cost or realisable value.

(iii) Work-in-process is valued at cost.

(iv) Stock-in-transit is valued at cost.
34
(F) Sales:
Sales are inclusive of conversion charges, overdue charges and excise duty and are net of shortage and trade
discounts.
(G) Miscellaneous And Deferred Revenue Expenditure:
(i) The expenditure incurred till 31-03-2003 on advertising and marketing of the new product is being written
off in five equal installments commencing from year of such expenditure having been incurred.
(ii) Expenditure incurred till 31-03-2003 on acquisition of technical know how is being written off equally over
a period of seven years.
(iii) Expenditure on the above incurred during the current period has been written off fully during the period.
(H) Foreign Exchange Transactions:
(i) Foreign Exchange transactions are recorded at the rates prevailing on the dates of transactions.
(ii) Foreign currency assets / liabilities (other than covered by forward contract which are stated at contracted
rates) in respect of fixed assets have been restated at the exchange rate prevailing at the period end and
increase / decrease arising out of it, are adjusted to the cost of fixed asset and those relating to other items
are adjusted in the Profit & Loss Account. Exchange difference in respect of forward exchange contract
(other than for acquisition of fixed assets) is recognised as income or expenditure over the life of contract.
(I) Retirement Benefits:
(i) Provision for liability in respect of future payment of gratuity payable to the eligible employees is made
on the basis of actuarial valuation.
(ii) Liability in respect of Leave Encashment benefit is provided on the basis of actuarial valuation.
(J) Research & Development:
Revenue expenditure on research and development is accounted for under appropriate revenue accounts.
(K) Investments:
Investment in Shares being in the nature of long-term investments is carried at cost of acquisition. Shares held
in foreign company are stated at cost incurred, in the year of investment. Diminution in the value of investment
is provided for, if of permanent nature.
(L) Contingent Liability:
Financial effects of contingent liabilities are disclosed in the accounts based on information available upto the
date on which the financial statements are approved and which have material effect on the position stated in the
Balance Sheet.
35
SCHEDULE “P” - NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2007
1. Contingent Liabilities:
(Rs. in lacs)
Particulars Current Previous
Year Year
a) In respect of custom duty availed under EPCG Scheme (Covered by bank 1,333.59 1,304.99
guarantee)
b) Guarantees extended by the banks based on the Company’s counter guarantees 349.55 150.59
c) Corporate Guarantee extended by the Company 47,844.13 55,330.91
d) Income Tax, Sales Tax, Service Tax and Entry Tax demand – disputed in appeal 133.05 74.11
e) Demand Order of Central Excise Authorities disputed by the Company 1.62 Nil
f) Disputed matters in respect of ESIC Nil 0.40
g) Labour matter pending in court 385.14 397.79
h) Civil matter pending in court 2.56 5.78
i) Writ petition filed before Hon’ble High Court, Indore against the order of Industrial 6.95 2.97
Court
j) Matter in respect of Gratuity pending before controlling authorities 1.34 1.13
k) Interest liability towards One Time Settlement with CDR lenders Nil 557.42
l) Arrears of Dividend on Preference Shares (From April 2000 onwards) 2,454.35 2,370.89
2. (a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net
of advance), as certified by the management Rs.3,491.89 lacs (Previous Year Rs.203.22 lacs) and
amount of capital commitment (net of advance) on account of investment in Sansar Holdings Inc. is
Rs.607.74 lacs (equivalent to US $ 14.00 lacs)
(b) As per Accounting Standard –19 “Leases”, the total of future minimum lease payment commitments
under operating lease agreements for a period of 2 to 9 years to use offices, warehouses and guest
house, are as under:
(Rs. in lacs)
Period As at 31-03-2007 As at 31-03-2006
i) not later than one year 124.20 60.00
ii) later than one year but not later than five years 479.05 121.57
iii) later than five years 170.72 31.74

The above amounts are exclusive of taxes and duties. During the year, the Company has charged
Rs.69.40 lacs (Previous Year Rs.54.57 lacs) as rent in respect of the above leases.
3. The secured lenders of the Company had approved a revised debt restructuring package by super majority,
under Corporate Debt Restructuring mechanism, formulated by RBI. The terms and conditions of the
restructuring package had been communicated to the Company vide CDR Cell’s letter dated 19th October
2004. As per the CDR package, the Company has been allowed by the lenders to convert all financial charges
and interest up to 31st March 2005 and net present value of the future deferential interest on restructured
debts to Zero Coupon - bonds / funded interest term loan / preference shares, which are repayable to the
lenders during the year 2014 to 2020 resulting in long term benefits to the Company. Such financial charges
have been transferred to “Restructured Financial Costs”, which cumulatively amount to net of amortisation,
Rs.11,991 lacs (Previous Year Rs.12,549 lacs) as shown in Schedule F are carried under the head “Loans and
Advances” and hence not charged to Profit and Loss Account.
36
SCHEDULE “P” - (Contd..)
4. Investment held in the shares of companies under the same management being of long term nature is stated at
cost of acquisition and no adjustment in respect of appreciation / depreciation of such investments has been
made in the accounts.
5. In the opinion of the management the current assets and loans and advances have a value on realisation in the
ordinary course of business atleast equal to the amount at which they are stated.
6. Balances of debtors, creditors, loans and advances including capital advances are subject to confirmation and
reconciliation, if any.
7. The Company has issued Foreign Currency Convertible Bonds in April, 2006, amounting to US $ 50 million
(Rs.22,335 lacs) due April 2011. The bonds bear interest at the rate of 2% per annum and are convertible
into fully paid equity shares at initial conversion price of Rs.57/- per share upto March 2011. Out of the above,
US $ 19 million have been converted into 1,49,79,997 equity shares of Rs.10/- each at a price of Rs.57/- per
share (including premium of Rs.47/- per equity share) upto 31st March 2007.
8. The Company has placed with Qualified Institutional Buyers 2,30,52,519 equity shares of Rs.10/- each at a
price of Rs.78/- per share (including premium of Rs.68/- per equity share) aggregating Rs.17,981 lacs in
November, 2006.
9. During the year, the Company has redeemed Preference Shares of face value Rs 200 lacs and a transfer of the
same amount has been made to Capital Redemption Reserve.
10. At the Extra Ordinary General Meeting dated 26th March, 2007, the Company has resolved to issue on
preferential basis upto 1,31,22,400 Fully Convertible Debentures (FCDs) of Rs.82.50 each aggregating
Rs.1,08,25,98,000/- to Anjani Finvest Private Limited, an entity belonging to the promoter group. Each FCD is
compulsorily convertible into one equity share of Rs.10/- each at a price of Rs.82.50 per share (including
premium of Rs.72.50 per equity share). The Company has already received the full amount of the FCDs but
allotment is yet to be made.
11. The retail business of Brandhouse Retails Ltd. including stock, debtors and other current assets net of current
liabilities has been purchased at Rs.1,295 lacs as on 1st January, 2007 by the Company.
12. Demerger of Retail Business:
(i) At the Board Meeting held on 3rd February, 2007 a Scheme of Arrangement between S. Kumars
Nationwide Limited (Demerged Company) and Brandhouse Retails Limited (Resulting Company)
and their respective shareholders for demerger of the Retail Business of the Demerged Company to
the Resulting Company with effect from 1st January, 2007 was approved, for filing with the High
Court of Judicature at Bombay.
(ii) The swap ratio of one fully paid up equity share of the resulting Company namely Brandhouse Retails
Limited (BHRL) for every five equity shares held by equity shareholders of the Demerged Company
namely S. Kumars Nationwide Limited (SKNL) under the said Scheme was arrived as per the reports
of the two independent valuers. As a result of this, BHRL will cease to be a subsidiary of the Company
w. e. f. 1st January, 2007.
In view of the above, the Company has given effect to the demerger in the books of accounts awaiting approval
of the High Court of Judicature at Bombay.
37
13. Payment against supplies from SSI and ancillary undertakings are made in accordance with the agreed credit
terms and to the extent ascertained from available information. Name of such units having outstanding for
more than 30 days are:
(Rs. in lacs)
Name of Vendor Current Year Previous Year
Shanti Packaging Nil 1.02
Economic Packaging Nil 9.37
Industrial Components Co. Nil 1.12
Shri Balaji Packaging Nil 0.67
K. T. Plastic Industries 1.28 1.28
Abhishekh Plastic Industries Nil 2.07
Pooja Pack Nil 1.04
Shri Shakti Packaging 1.30 Nil
Wel Weave Fabrics 50.01 Nil
Sanaa Syntex Pvt. Ltd. 18.22 Nil
14. Debtors and advances due from firms and companies in which some of the Directors are/were interested:
(Rs. in lacs)
Name of the Company Current Year Previous Year
(A) Debtors:
Landmarc Leisure Corp. Ltd. 1.87 2.09
Brandhouse Retails Ltd. 705.41 83.53
Reid & Taylor Ltd. U.K. 514.90 563.61
Manors Textiles Ltd. 12.90 6.43
Shree Maheshwar Hydel Power Corp. Ltd. 3.03 4.65
S. Kumars Online Ltd. 2.10 Nil
S.Kumars Limited Nil 2.01
Total 1,240.21 662.32
(B) Advances:
S. Kumars Ltd. 432.53 386.64
Landmarc Leisure Corp Ltd. 0.02 3.20
Shree Maheshwar Hydel Power Corp. Ltd. 1.62 4.04
Shree Ram Urban Infrastructure Ltd. 148.81 148.81
S. Kumars Online Ltd. 11.81 11.78
S. Kumars Enterprises (Synfabs) Ltd. 452.83 Nil
Total 1,047.62 554.47
Grand Total 2,287.83 1,223.38
15. Managerial remuneration comprises of:

(Without gratuity and leave encashment contribution)
(Rs. in lacs)
Particulars Managing Director Other Directors

Current Year Previous Year Current Year Previous Year
a) Salary 63.93 1.20 68.26 35.80
b) Contribution to Provident Fund 7.67 0.14 7.54 3.82
c) Other Perquisites 14.26 9.56 8.77 2.46
Total 85.86 10.90 *84.57 42.08
*Out of the above Rs.8.78 lacs (Previous Year – Nil) has been debited to capital work-in-progress.
38
16. The Company has computed its Deferred Tax Asset/Liability in accordance with AS-22 “Accounting for
Taxes on Income” which works out Deferred Tax Asset of Rs.3,219.04 lacs as on 31-03-2007. However as a
matter of prudence, the Company has not recognised any Deferred Tax Asset for the year under consideration.
(Rs. in lacs)
Particulars As at 01.04.2006 Increase/(Decrease As at 31.03.2007
during the year
Deferred Tax Assets
Unabsorbed Depreciation and Losses 8,160.76 (5,469.11) 2,691.65
Deferred Tax Liability
Depreciation Difference (468.56) 995.95 527.39
Net Deferred Tax Assets/(Liability) 7,692.20 4,473.16 3,219.04
17. In view of the brought forward unabsorbed losses and depreciation, the Management is of the opinion that there
is no tax liability anticipated. However, considering the provisions of Section 115 JB of the Income Tax Act, 1961
the Company has made the provision of Rs.1,035 lacs towards the same.
18. The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments and
home textiles. Considering the overall nature, the management is of the opinion that the entire operation of the
Company fall under one segment i.e. Textiles and as such there are no separate reportable segments for the
purpose of disclosures as required under AS-17 Segment Reporting.
19. The Company has, for acquisition of a Home textile designing and distribution company in USA remitted
Rs.268.62 lacs (equivalent to USD 6.00 lacs) to Sansar Holdings Inc against proposed investment of USD 20
lacs. The amount remitted is shown under Schedule “F” as Loans and Advances, pending completion of
formalities. The balance amount has been shown as Capital Commitment (Schedule P note no. 2(a)).
20. Based on the internal estimates and assessments and expert technical valuation, the management is of the
opinion that there is no impairment in relation to its assets and hence no provision is considered necessary.
21. Related parties Disclosures required under Accounting Standard - 18.

(a) Related parties:
Brandhouse Retails Ltd.
S. Kumars Ltd. (*)
Shree Maheshwar Hydel Power Corporation Ltd. (*)
Entegra Infrastructures Ltd. (*)
Dhvani Terefabs Exports Pvt. Ltd.
S. Kumars Online Ltd. (*)
Manors Textiles Ltd. (*)
S. Kumars Textiles Ltd.
Landmarc Leisure Corporation Ltd. (*)
S. Kumars Enterprises (Synfabs) Ltd.
Shree Ram Urban Infrastructure Ltd. (formerly Shree Ram Mills Ltd.).
Reid & Taylor Ltd., U.K.
Anjani Finvest Pvt Ltd.
Ingenious Finance & Investment Pvt Ltd.
Verve Properties & Investment Pvt Ltd.
(*) Relationship existed upto December 2006
(b) Key Management Personnel:

Shri N. S. Kasliwal – Vice Chairman & Managing Director
Shri Anil Channa – Executive Director (w.e.f. 01-01-2007)
Shri Govind Mirchandani – Executive Director
39
(c) Details of Transactions:-

(Rs. in lacs)
Particulars Current Year Previous Year
Purchases
Goods
Brandhouse Retails Ltd 0.60 -
Dhvani Terefabs Exports Pvt. Ltd. 38.72 -
Reid & Taylor Ltd., U.K. 494.75 232.29
Others 1.75 -
Total 535.81 232.29
Services
S. Kumars Ltd. 0.55 393.64
Shree Ram Mills Ltd. 27.17 86.87
Others 5.89 0.07
Total 65.21 717.50
Sales
Goods
Brandhouse Retails Ltd 1,747.58 -
Others 0.37 2.12
Total 2,014.12 499.64
Services
Others 14.48 -
Investment
Brandhouse Retails Ltd. - 100.00
Outstanding as at Year end
Debtors 1,240.21 662.32
Creditors 269.49 179.72
Advances Receivable 1,047.83 554.47
Managerial Remuneration 169.56 51.03

( Related party relationships are as identified by the management and have been relied upon by the auditor).
40
22. Quantitative Information for the year ended 31st March 2007
a) Licensed capacity: Not applicable

b) Installed capacity: i) Spinning: 51,524 Spindles (Previous Year 51,524 Spindles)
ii) Weaving: 266.59 lacs mtrs (Previous Year 266.59 Lacs mtrs.) p.a.
(As certified by the Management, being a technical matter)
iii) Processing & Finishing: 75 lacs mtrs. p.a. (Worsted Fabrics)
(Previous Year 75 lacs mtrs. p.a.)
iv) Apparels: 11.4 lacs nos. p.a. (Ready-to-wear Garments)
(Previous Year - Nil)
( Figures in lacs)
Quantity Amount (Rs.) Quantity Amount (Rs.)

PRODUCTION FOR SALE
Fabrics Mtrs 973.08 801.50
Yarn Kgs 19.32 5.84
Ready Made Garments Pcs 33.56 17.17
OPENING STOCK
Semi-finished Mtrs 128.83 10,176.64 81.75 6,711.65
Finished-Fabrics Mtrs 217.31 16,693.46 246.69 18,451.01
Readymade Garments Pcs 0.45 132.04 0.19 49.30
Total 27,002.14 25,211.96
SALES
Fabrics Mtrs 933.06 1,07,792.98 830.88 84,935.26
Yarn Kgs 19.32 2108.76 5.84 897.94
Ready Made Garments Pcs 27.34 12,523.94 16.91 3,001.84
Conversion charges 528.30 137.62
Total 1,22,953.98 88,972.66
CLOSING STOCK
Semi-finished fabrics Mtrs 164.59 12,600.46 128.83 10,176.64

Finished Mtrs 257.33 20,731.68 217.31 16,693.46
Ready Made Garments Pcs 6.67 2,315.13 0.45 132.04
Total 35,647.27 27,002.14
CONSUMPTION
Fibre Kgs 39.27 4,592.72 24.36 3,554.89
Yarn Kgs 3.56 909.55 21.89 3,065.10
Grey / Fabrics / Garments Mtrs/Pcs 1,072.18 83,181.31 759.17 57,451.43
Total 88,683.58 64,071.42
Notes: 1. Consumption figures stated above are inclusive of fabric and garments purchases.
2. Production includes Fabrics produced by outside converters.
41
23. Value of Raw Materials, Spares and Components Consumed:

(Rs. in lacs)
% Amount % Amount
Raw Material/Fabric Purchases
Indigenous 99.43 88,174.79 99.32 63,635.71
Imported 0.57 508.79 0.68 435.71
Total 100.00 88,683.58 100.00 64,071.42
24. Value of Imports:

(Rs. in lacs)
i) Raw material* 806.42 435.71
ii) Stores & Spares* 156.86 98.66
iii) Finished Fabrics* 2,161.85 242.89
iv) Computer Software* Nil 7.91
v) Advance for Capital Goods 138.74 Nil
vi) Advances Recoverable 268.62 Nil
*On CIF value basis
25. Expenditure in foreign currency:

(Rs. in lacs)
Foreign Travelling 136.06 194.79
Interest 163.43 43.74
Repayment of Loan 564.20 Nil
Professional Fees 687.89 74.16
Others 1.69 1.17
Sales Promotion Expenses 109.59 111.11
Royalty 321.16 674.76
26. Earnings in foreign currency:

(Rs. in lacs)
F.O.B. Value of Exports 3,303.88 1,875.04
42
27. (a) Computation of Earning Per Share:
Basic Current Year Previous Year

Net Profit after tax before extraordinary items and tax thereon
(Rs. in lacs) 12,352.26 4,993.00
Net Profit after tax after extraordinary items and tax thereon
(Rs. in lacs) 10,747.14 9,977.58
Weighted average number of Equity Shares of Rs.10 each
outstanding during the period (No. in lacs) 1,672.41 1,546.70
Basic Earnings per Share (Rs.) 7.39 3.22
Basic Earnings per Share After extraordinary items (Rs.) 6.43 6.45
Diluted Current Year Previous Year

Net Profit after tax before extraordinary items and tax thereon
(Rs. in lacs) 12,352.26 4,993.00
Net Profit after tax after extraordinary items and tax thereon
(Rs. in lacs) 10,747.14 9,977.58
Weighted average number of Equity Shares of Rs.10 each
outstanding during the period (No. in lacs) 2,220.09 1,627.10
Diluted Earnings per Share (Rs.) 5.56 3.06
Basic Earnings per Share After extraordinary items (Rs.) 4.84 6.13
(b) As per the terms of CDR package, dividend on Cumulative Preference Shares is payable during the
year 2009 to 2014 and hence the same has not been considered for calculation of EPS.
EPS - diluted is calculated on the basis of equity share capital of Rs.22,519 lacs, taking into account the
following, in addition to the paid share capital, as per Accounting Standard 20.
(i) 80,42,860 equity shares of the Company against share application money of Rs.2,000 lacs, pending
for allotment
(ii) Amount of Rs.10,827 lacs received by the Company towards FCDs and the resultant 1,31,22,400
equity shares upon its conversion have been considered.
(iii) FCCBs which are not yet converted in to equity shares amounting to US $ 31 Million, which
would result in the 2,44,41,056 nos. of equity shares on conversion as per the issue terms and
conditions have been considered.
43
28. Capital work-in-progress includes expenditure incurred during the construction of High Value Fine Cotton and
Home Textiles as under:
(Rs.in lacs)
Particulars Amount Amount
Opening Balance as on 01.04.2006 175.25
Add: Incurred during the year:
Employment Costs 46.56
Travelling Expenses 71.14
Legal & Professional Charges 90.05
Miscellaneous Expenses 26.35
Interest and Finance Charges 392.24
Total incurred during the year 626.34
Less: Capitalized during the year -
Amount Carried forward as on 31.03.2007 801.59
29. Particulars of Derivative Instruments.

a. No derivative instruments are acquired for hedging purposes
b. No derivative instruments are acquired for speculation purposes
c. Foreign Currency exposures that are not hedged by derivative instruments or otherwise are
(EURO) € 51.68 lacs (Rs.3,002.22 lacs).
30. Previous year’s figures have been regrouped / rearranged wherever considered necessary to make them
comparable with current year’s figure.
44

31. Information pursuant to the provision of the part IV of schedule to the Companies Act, 1956:-
BALANCE SHEET ABSTRACT & COMPANY’S GENERAL BUSINESS PROFILE
I. Registration details
Registration No. 0 0 5 8 3 6 1 State Code 1 1

Balance Sheet 3 1 0 3 2 0 0 7

II. Capital raised during the year (Amount in Rs. Thousands)

Public issue N I L Rights Issue N I L

Bonus issue N I L Private Placement 1 2 3 8 0 4 6

III. Position of Mobilisation and Deployment of Funds (Amount in Rs.Thousands)

Total Liabilities 1 9 9 6 5 8 9 8 Total Assets 1 9 9 6 5 8 9 8

Sources of Funds Application of Funds

Paid-up Capital 3 8 1 7 2 0 1 Net Fixed Assets 5 7 9 0 9 4 1

Reserves & Surplus 4 2 1 9 1 5 3 Investments 1 3 8 2 8

Secured Loans 8 7 1 0 5 9 2 Net Current Assets 1 2 1 6 9 9 6 8

Unsecured Loans 3 2 1 8 9 5 2 Misc. Expenditure 9 3 8 2

Deferred Tax Assets N I L

Accumulated Losses 1 9 8 1 7 7 9

IV. Performance of Company (Amount in Rs. Thousands)

Turnover & Other Income 1 2 3 9 4 4 1 5 Total Expenditure 1 1 2 1 6 2 0 1

Profit / Loss Before Tax 1 1 7 8 2 1 4 Profit / Loss After Tax 1 0 7 4 7 1 4

Earning Per Share in Rs. 6 . 4 3 Dividend Rate % N I L

V. Generic Names of Principal Products / Services of the Company (as per monetary terms)

Products Description ITC Code No.

1 Blended Fabrics 5 5 1 5

2 Blended Yarn 5 5 0 9

3 Worsted Yarn 5 1 1 1

For and on behalf of the Board
Dr. A. C. Shah Chairman
N. S. Kasliwal Vice Chairman & Managing Director
L. N. Somani Company Secretory

Place : Mumbai
Dated : 10th May, 2007 J. S. Shetty CFO & President - Finance

45
CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH, 2007
(Rs. in lacs)
ended on 31.03.2007 ended on 31.03.2006
A) Cash Flow Statement from Operating Activities

Net Profits Before Tax and Extraordinary Items 13,449.43 5,519.65

Adjustments for:
a) Depreciation 4,387.51 4,091.85
b) Deferred Revenure Expenditure 1,052.63 1,135.50
c) Profit/Loss on sale of fixed assets(net) 5.94 2.53
d) Sundry balances written back (176.17) (135.50)
e) Sundry balances written off 11.89 10.72
f) Long term publicity - (26.52)
g) Bad debts 3.98 41.49
h) Interest Expenses 6,092.39 4,506.61
I) Interest Income (82.22) (66.26)
j) Profit on Sale of Investment (394.70) -

Operating Profit before Working Capital Changes 24,350.68 15,080.07

Adjustments for
a) Trade & Other Receivables (15,177.07) (11,616.07)
b) Inventories (12,374.03) (3,921.92)
c) Trade payables 3,401.11 664.10

Cash Generated from /(Used)in Operating Activities 200.69 206.18

a) Direct Taxes (68.53) (19.63)

Cash Inflow/(outflow) before Extraordinary Items 132.16 186.55

a) Prior Period Adjustments (gross) 37.22 5.83
b) Restructuring Gains on Borrowings - 5,503.04
c) Transfer of Assets on Demerger (1,605.12) -

Net cash Flow from /(Used)in Operating Activities Total (A) (1,435.74) 5,695.42

B) Cash Flow arising from Investing Activities
a) Acquisition of Fixed assets (Including Capital work-in-progress) (24,425.89) (1,548.71)
b) Sale of Fixed Assets 107.54 10.56
c) Investments 1,044.65 (100.00)
d) Interest Income 82.22 66.26
Net cash Flow from /(Used)in Investing Activities Total (B) (23,191.48) (1,571.89)

C) Cash Flow arising from financing activity
a) Proceeds from Secured Loans (Net of repayment) (10,765.28) 11,212.64
b) Proceeds from Unsecured Loans (Net of repayment) 12,306.71 (21,676.71)
c) Proceeds from Equity Shares/ Shares to be alloted 27,062.56 10,284.00
d) Proceeds from Preference Shares (Net of Redemption) 1,795.85 -
e) Interest (6,092.39) (2,971.86)

Net cash Flow from Financing Activities Total (C) 24,307.45 (3,151.93)

46
CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH, 2007 (Cont..)
(Rs. in lacs)
ended on 31.03.2007 ended on 31.03.2006
Net Increase in Cash and Cash Equivalents Total (A+B+C) (319.77) 971.60

Cash & Cash Equivalent (Opening Balance) 1,771.33 799.73
Cash & Cash Equivalent (Closing Balance) 1,451.56 1,771.33

Net Change in Cash & Cash Equivalent (319.77) 971.60


Manoj Daga

47
REPORT ON CORPORATE GOVERNANCE
Sound corporate governance practices and ethical business conduct remain at the core of the Company. The Company’s
philosophy on Corporate Governance stems from its belief that timely disclosure, transparent accounting policies and
a strong and independent Board go a long way in maximizing corporate value. Your Company believes that all actions
and strategic plans should deliver value to all stakeholders including shareholders as well as conform to the highest
standards of corporate behaviour.
The Securities and Exchange Board of India (SEBI) stipulates the Corporate Governance standards for listed Companies
through Clause 49 of the Listing Agreement of Stock Exchange. SEBI through circulars dated 29th October 2004 and 29th
March 2005 has revised Clause No. 49 and mandated listed Companies to comply with the revised Clause No. 49. The
Company has established systems and procedures to be fully compliant with the revised Clause No. 49 in both letter
and spirit.
This chapters along with the chapters on Management Discussion and Analysis and General Shareholder Information,
report the Company’s compliance with the revised Clause 49 of the listing agreement.
The report on Corporate Governance as per the format prescribed by SEBI and incorporated in Clause 49 of the Listing
Agreement is as under:
BOARD OF DIRECTORS:
Composition of the Board:
As on 31st March 2007, the Company’s Board consists of 11 members. Of these, three (3) are executive directors including
Vice Chairman and Managing Director who is a Promoter Director. Seven (7) are independent directors and one (1)
is non executive promoter director. The composition of the Board is in conformity with the Clause 49 of the Listing
Agreement.
Number of Board Meetings:
The Board of Directors met nine times during the year on 8th May 2006, 14th July 2006, 14th September 2006, 16th October
2006, 9th November 2006, 30th December 2006, 12th January 2007, 3rd February 2007 and 27th February 2007. The maximum
time gap between any two consecutive meetings did not exceed four months.
48
Directorship held and Director’s attendance Record:
As mandated by Clause 49, none of the Directors are members of more than ten Board level committees nor are they
Chairmen of more than five committees in which they are members. Tables hereinbelow give the details of Directorships
held and Directors’ attendance record in other companies:
Director Category No. of other No. of other Board Attendance At

Directorship Committees the Last AGM
on 14th July 2006
Public Private Chairman Member
Dr. A. C. Shah Independent Non 5 1 - 5 P
Executive
Shri Nitin S. Kasliwal, Vice Executive 7 5 - - P
Chairman & Managing
Director
Shri M. H. Kulkarni (IDBI) Independent Non 3 1 - 1 LA
Nominee Executive
Shri A. K. Choudhary (IFCI) Independent Non - - - - -
Nominee(1) Executive
Shri Anil Kumar Channa, Executive - - - - -
Deputy Managing Director(2)
Shri Martin Henry Independent Non - 1 - - P
Executive
Shri Dara D. Avari Independent Non 2 - 1 1 P
Executive
Col. S. K. Raje Independent Non 2 2 - 1 P
Executive
Shri Govind Mirchandani Executive 1 - - - P
Smt. Jyoti N. Kasliwal (3)
Non Executive 1 - - - -
Promoter Director
Shri Vijay G. Kalantri(4) Independent Non 14 3 - 3 -
Executive
Shri Sanjeev Ghai, (IFCI) Independent Non 4 - - 1 LA
Shri G. A. Nayak, (UTI) Independent Non 1 - - 1 LA
Smt. Silpita Guha, (UTI) Independent Non 1 1 -
Shri Ambuj A. Kasliwal(8) Non Executive 7 9 - - P
Promoter Director
Shri Mukul S. Kasliwal(9) Non Executive 12 8 - - LA
Promoter Director
(1)
Nominated as Director w.e.f 30th December 2006.
(2)
Appointed as Director in the Board Meeting held on 30th December 2006. Designated as Deputy Managing Director in
the Board Meeting held on 12th January 2007.
(3)
Appointed as Director w.e.f. 3rd February 2007.
(4)
Appointed as Director w.e.f 3rd February 2007.
(5)
Withdrawal of nomination w.e.f 30th December 2006.
(6)
Withdrawal of nomination accepted in the Board Meeting held on 14th September 2006.
(7)
Nominated as Director and approved in the Board Meeting held on 16th October 2006. Nomination subsequently
withdrawn by UTI and subsequently noted in the Board Meeting held on 3rd February 2007
(8)
Resigned w.e.f 30th December 2006
(9)
Resigned w.e.f 30th December 2006
49
Name of Director Attendance in the Board Meeting held on

08/05/ 14/07/ 14/09/ 16/10/ 09/11/ 30/12/ 12/01/ 03/02/ 27/02/
2006 2006 2006 2006 2006 2006 2007 2007 2007
Dr. A. C. Shah P P P P P P P P P
Shri Nitin S. Kasliwal P P P P P P P P P
Shri M. H. Kulkarni P LA P LA P LA P LA LA
Shri A. K. Choudhary - - - - - - P P P
Shri Sanjeev Ghai P P P P P LA - - -
Shri G. A. Nayak P LA - - - - - - -
Smt. Silpita Guha - - - - P LA LA - -
Shri Anil Kumar Channa - - - - - - P P P
Shri Martin Henry LA P LA P LA P P LA LA
Shri Dara D. Avari P P P P P LA P P P
Col. S. K. Raje P P P P P P P P P
Shri Govind Mirchandani P P LA P P P P P P
Smt. Jyoti N. Kasliwal - - - - - - - - P
Shri Vijay G. Kalantri - - - - - - - - P
Shri Ambuj A. Kasliwal P P P P LA - - - -
Shri Mukul S. Kasliwal LA LA LA LA LA - - - -
P – Present
LA – Leave of Absence
As mandated by the revised Clause No 49, the independent directors in the Company’s Board:
v Apart from receiving Directors’ remuneration, do not have material pecuniary relationship or transactions
with the Company, its Promoters, its Directors, its senior management or its holding company, its subsidiaries and
associates which may affect the independence of the Director.
v Are not related to the promoters or persons occupying the management positions at the Board level or at one level
below the Board;
v Have not been executives of the Company in the immediately preceding three financial years.
v Are not partners or executives or were not partners or executives during the preceding three years of the:
Statutory Audit Firm or the Internal Audit Firm that is associated with the Company.
Legal Firm(s) and consulting firm(s) that have a material association with the Company.
v Are not material suppliers, service providers or customers or lessors or lessees of the Company, which may affect
their independence.
v Are not substantial shareholders of the Company i.e. do not own two percent or more of the block of voting
shares.
50
Shareholding of Directors as at 31st March, 2007
Name of the Director No. of Shares

Dr. A. C. Shah NIL
Shri Nitin S. Kasliwal, Vice Chairman & Managing Director 9,64,703
Shri M. H. Kulkarni (IDBI) Nominee NIL
Shri A. K. Choudhary (IFCI) Nominee NIL
Shri Anil Kumar Channa, Deputy Managing Director NIL
Shri Martin Henry NIL
Shri Dara D. Avari NIL
Col. S. K. Raje NIL
Shri Govind Mirchandani NIL
Smt. Jyoti N. Kasliwal 9,42,160
Shri Vijay G. Kalantri NIL
Audit Committee:
The Audit Committee was formed by the Board of Directors on 30th April, 1998 and reconstituted on 23rd December, 2000.
The terms of reference of this committee cover the matters specified for Audit Committee under Clause 49 of the Listing
Agreement as well as Section 292A of the Companies Act, 1956.
For the financial year 1st April, 2006 to 31st March, 2007 four meetings were held viz on 8th May 2006, 14th July 2006, 16th
October 2006 and 11th January 2007.
The Constitution of the Committee is as under:
Name Designation Category Profession

Dr. A. C. Shah Chairman Independent Economist
Non Executive
Shri M. H. Kulkarni Member Independent Service
(Nominee IDBI) Non Executive
Shri A. K. Choudhary Member Independent Service
(Nominee IFCI) Non Executive
w.e.f. 30th December 2006
Shri Dara D. Avari Member Independent Finance Professional
Non Executive
Shri Vijay G. Kalantri Member Independent Business
w.e.f. 3rd February 2007 Non Executive
Shri Sanjeev Ghai Member Independent Service
(Nominee IFCI) Non Executive
Upto 30th December 2006
Shri Nitin S. Kasliwal Member Executive Industrialist
Upto 8th May 2006
51
The Company Secretary acts as the Secretary for such meetings. The Statutory Auditors and Internal Auditors of the
Company, CEO & Managing Director, CFO & President Finance and Vice President – Internal audit Department of the
Company are invitees to the meetings.
Name of the Member Attendance in the Audit Committee Meeting held on

8th May 2006 14th July 2006 16th October 2006 11th January 2007
Dr. A. C. Shah P P P P
Shri Sanjeev Ghai P P P -
(Nominee IFCI)
Upto 30th December 2006
Shri A. K. Choudhary - - - P
(Nominee IFCI)
w.e.f. 30th December 2006
Shri M. H. Kulkarni P LA LA LA
(Nominee IDBI)
Shri Dara D. Avari P P P P
Shri Nitin S. Kasliwal P - - -
Upto 8th May 2006
Shri Vijay G. Kalantri - - - -
w.e.f. 3rd February 2007
P – Present
LA – Leave of Absence
The Audit Committee is empowered, pursuant to its terms of reference, to :
v Investigate any activity within its terms of reference and to seek any information it requires from any employee.
v Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant
experience and expertise, when considered necessary.

The minutes of the Audit Committee are reviewed and noted by the Board.
Remuneration Committee:
The remuneration Committee was formed on 29th April 2002. The Committee comprises of three Non Executive
Independent Directors as below:
Dr. A. C. Shah - Chairman

Shri Dara D. Avari - Member
Col. S. K. Raje - Member
Four meetings were held on 3rd May 2006, 13th July 2006, 26th December 2006 and 8th January 2007. In those meeting,
Dr. A. C. Shah and Shri Dara D. Avari were present. Col. S. K. Raje was granted leave of absence.
The non executive directors of the Company do not draw any remuneration from the Company except sitting fees. The
sitting fees for each meeting of the Board and Audit Committee were increased from Rs.2000/- to Rs.5000/- at the Board
Meeting held on 14th July 2006 and further increased from Rs.5000/- to Rs.10000/- at the Board Meeting of the Company
held on 3rd February 2007 respectively.
52
The details of the remuneration paid to the Managing Director and Whole time Directors are as under:
Name and Designation Shri Nitin S. Kasliwal, Shri Anil Channa, Shri Govind Mirchandani,
Vice Chairman & Deputy Managing Director Executive Director
Managing Director
Tenure of Appointment Five years Three Years Three Years
(From 1st April 2002 to 31st (Proposed From 12th (From 31st January 2005 to
March 2007.) January 2007 to 11 January 30th January 2008)
th
(Proposed from 1st April 2010)

2007 to 31st March 2012)
Salary Rs.63.93 lacs Rs.3.53 lacs Rs.64.73 lacs
Other perquisites Rs.21.93 lacs Rs.5.25 lacs Rs.10.19 lacs
(including contribution to
Provident Fund)
During 2006-07. the Company did not advance any loans to any of its Directors. No Stock Options have been issued to any
of the Directors on the Board. (The Company has since passed Special Resolution at the Extra Ordinary General Meeting
held on 26th March 2007 to issue Stock Options to eligible persons. The Scheme is yet to be finalized and implemented.)
The Remuneration Committee recommends to the Board the compensation package of the executive Directors. The
remuneration of the Vice Chairman and Managing Director and Executive Directors is subject to the approval of the Board
and the Shareholders at the General Meetings and is within the ceilings laid down by Schedule XIII of the Companies
Act, 1956. The non executive directors are paid sitting fees for attending the meetings of the Board of Directors and
Committees within the ceiling prescribed by the Central Government.
Code of Conduct:
The Board of Directors has laid down the Code of Conduct for the Directors and the Senior Management of the Company
for due compliance.
Transfer & Shareholders’ / Investors’ Grievances Committee:
The Committee comprises of following three Directors:
Shri Dara D. Avari - Chairman

Shri Anil Channa - Member
Col. S. K. Raje - Member
* Shri Ambuj A. Kasliwal was Chairman of the Committee till 30th December 2006. Since he has resigned from the
directorship of the Company w.e.f. 30th December 2006, the Committee was reformed on 12th January 2007. Mr. Anil
Channa was appointed on the Committee a member.
Shri L. N. Somani, Company Secretary is the Compliance Officer of the Committee. He has been delegated powers
by the Committee to take all suitable steps in connection with the transfer / transmission and shareholders / investors
grievances.
The Shareholders’ / Investors’ Grievances Committee deals with various matters relating to:
• Transfer / transmission of shares

• Issue of duplicate share certificates
• Review of shares dematerialized and all other related matters
• Monitors expeditious redressal of investors grievance
• Non receipt of Annual Report and Dividend
• All other matters related to Shares / Debentures
During 2006 – 07, the Committee met ten times. The minutes of the meeting of the Shareholders’ / Investors’ Grievances
Committee are reviewed and noted by the Board.
53
During the year under review, a total of 92 complaints were received by the Company from the Shareholders / Investors.
All the complaints were resolved by the Company to the satisfaction of the investors and as on 31st March 2007, there
were no pending letters or complaints.
Committee of Directors:
The Committee of Directors was formed on 9th January 1997. The Committee comprises of the following members.
Shri Nitin S. Kasliwal - Chairman

Shri Anil Channa - Member
Shri Dara D. Avari - Member
* Shri Ambuj A. Kasliwal was Chairman of the Committee till 30th December 2006. Since he has resigned from the
directorship of the Company w.e.f. 30th December 2006, the Committee was reformed on 12th January 2007. Mr. Anil
Channa was appointed on the Committee as a member.
There were sixteen meetings of the Committee of Directors during the financial year 1st April 2006 to 31st March 2007.
The minutes of the Committee of Directors are submitted to the Board for ratification and taking on record.
General Body Meetings:
The details of the date, time and venue of the last three Annual General Meetings held are as under:
Financial Year AGM Date Time Venue

2003 – 04 14th AGM 24/02/2005 4.30 P. M. Walchand Hirachand Hall, Indian
Merchants’ Chamber, IMC Marg,
Churchgate, Mumbai – 400 020
2004 – 05 15th AGM 21/07/2005 4.30 P.M. Walchand Hirachand Hall, Indian
2005 – 06 16th AGM 14/07/2006 4.30 P. M. Walchand Hirachand Hall, Indian
No resolution was required to be passed by postal ballot.
The following Special Resolutions were taken up in the last three years AGMs/ EOGMs and were passed with the
requisite majority:
1. AGM held on 24th February 2005:

v Increase in Authorised Equity Share Capital by Rs.20 Crores.
2. EOGM held on 29th March 2005
v To offer, issue and allot on a preferential basis – Equity Shares of Rs.15 Crores
3. AGM held on 21st July 2005:
v To offer, issue and allot to Promoters’ Companies Equity Shares of Rs.5 Crores on preferential basis.

v Wiping out of more than 50% of net worth - To make application to the BIFR.

v Issue of ADR / GDR / FCCB upto 50 million US $.
54
4. EOGM held on 11th August 2005
v To increase Authorised Share Capital by Rs.20 Crores.
v To offer, issue and allot preference shares to the Banks/ Financial Institutions / Lenders who have sanctioned
a scheme of debt restructuring under CDR mechanism.
5. EOGM held on 6th January 2006:
v Increase in Authorised Share Capital – Equity Shares by Rs.30 crores and Preference Shares by Rs.55 Crores.
v To invest upto Rs.1Crore in the Equity Shares of Brandhouse Retails Limited (Formerly known as ‘Reid &
Taylor Retails Pvt. Ltd.)
6. AGM held on 14th July 2006:
v Increase in Remuneration of Shri Nitin S. Kasliwal, Vice Chairman & Managing Director
v Increase in Remuneration of Shri Govind Mirchandani, Executive Director
7. EOGM held on 9th November 2006:
v Increase in Authorised Share Capital - Equity Shares by Rs.30 crores and Preference Shares by Rs.25 Crores
and alteration to the Article 3 of Articles of Association.
v To offer, issue and allot Equity Shares, Fully Convertible Debentures / Partly Convertible Debentures or
Securities other than Warrants which are convertible into or exchangeable with Equity Shares by way of
Qualified Institutional Placements (QIP) to Qualified Institutional Buyers (QIBs).
v To invest an amount not exceeding US $ 40 Million in the equity shares/preference shares or any suitable
combination thereof of either LT Acquisitions LLC, or Sansara Holdings International Inc. pursuant to Section
372 A of the Companies Act, 1956
8. EOGM held on 26th March 2007:
v Increase in Authorised Share Capital - Equity Shares by Rs.20 crores and alteration to the Article 3 of Articles
of Association.
v To offer, issue and allot 1,31,22,400 Fully Convertible Debentures to Promoter Group Companies on
preferential basis.
v To offer, issue and allot 66,25,000 Equity Share Warrants – “Series A” to Mauritius Debt Management Limited,
Mauritius on preferential basis.
v To offer, issue and allot 53,00,000 Equity Share Warrants – “Series B” to Promoter Group Companies on
preferential basis.
v To offer, issue and allot Equity Shares to eligible employees under Employee Stock Option Scheme.
Disclosures
The Company has not entered into any transaction of a material nature with the Directors or the management or the
relatives during the year that may have potential conflict with the interest of the Company at large. Transactions with
related parties are disclosed in note no. 20 of Schedule “P” to the accounts in the Annual Report.
55
There was no instance of non compliance of any matters related to the capital markets during the year.
Disclosure of accounting treatment in preparation of financial statements:
The Company has followed the guidelines of Accounting Standards laid down by the Institute of Chartered Accountants
of India (ICAI) in preparation of its financial statements, except the qualifications included in the audit report of the
Statutory Auditors. The explanations for the auditors qualifications are given in the Directors’ Report.
Details of non-compliance by the Company
The Company has complied with all the requirements of regulatory authorities. No penalties / strictures were imposed
on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to the capital market
during the last three years.
CEO /CFO certification
As required under Clause 49 V of the listing agreement with the Stock Exchanges, the Vice Chairman and Managing
Director who is also the CEO and the President Finance who is also the CFO have certified to the Board the financial
statements for the year ended 31st March, 2007.
Board Material distributed in advance
Agenda and Notes on Agenda are circulated to the Directors, in advance, in the defined Agenda format. All material
information is incorporated in the Agenda papers for facilitating meaningful and focused discussions at the meeting.
Where it is not practicable to attach my document to the Agenda, the same is tabled before the meeting with specific
reference to this effect in the Agenda.
In special and exceptional circumstances, additional or supplementary item(s) on the Agenda are permitted. Sensitive
subject matters may be discussed at the meeting without written material being circulated in advance
Recording Minutes of proceedings at Board and Committee meetings
The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes
are circulated to all the members of the Board / Committee for their comments. The finalized minutes of proceedings of
a meeting are entered in the Minutes Book within 30 days from the conclusion of that meeting.
Post Meeting Follow-up Mechanism
The Guidelines for Board and Committee meetings facilitate an effective post-meeting follow-up, review and reporting
process for the decisions taken by the Board and Committees thereof. Action taken report on the decisions/minutes of
the previous meeting(s) where required is placed at the immediately succeeding meeting of the Board/Committee for
noting by the Board/Committee.
Means of Communications
The Annual, Half Yearly and Quarterly results are submitted to the Stock Exchanges in accordance with Listing Agreement
and published in the required newspapers.
GENERAL SHAREHOLDERS INFORMATION
(i) Reappointment of Directors
Col. S. K. Raje and Shri Govind Mirchandani retire by rotation and are proposed to be re-appointed in ensuing Annual
General Meeting to be held on 17th July 2007.
56
The brief particulars as per Clause 49 are given in the Notice of AGM.
General Information:
(1) Nature of Industry: Textile Manufacturing and Trading

(2) Date of commencement of commercial production – 28th September 1990
(3) Financial performance: Given in the Audited Balance Sheet.
(4) Export performance for the period: 1st April 2006 to 31st March 2007: Rs.33.04 Crores.
(5) Foreign investments or collaboration, if any: (i) Joint Venture with Reid & Taylor, U.K
(ii) The Company is in the process of establishing a
subsidiary in the USA in the name of Sansara Holdings
Inc. for the purpose of foreign acquisitions in related
textiles field.
Registered Office : “Avadh”, Avadhesh Parisar,

Shree Ram Mills Premises,
Worli, Mumbai 400 018,(India)
Tel No. 2493 0180 / 2493 3181/ 2496 5701
Website : www. skumars.net
PLANT LOCATIONS:-
PLANT
Menswear and Home Textiles Worsted Fabrics Spinning and Weaving
3B Industrial Area No. 2 Thandavapura Chamunda Standard Mills,
Agra Bombay Road, Hobli Chikkaianachatra, Balgarh,
Dewas (M.P.) Nanjangud Taluka, Dewas (M.P.)
Mysore, Karnataka
Registrar and Share Transfer Agents : Bigshare Services Private Limited

Unit : S.Kumars Nationwide Limited
E/2, Ansa Industrial Estate,
Sakivihar Road, Saki Naka,
Andheri (East), Mumbai 400 072.
Tel. No. 28470652/28473747
Fax No. 28525207
Shares Listed at : Stock Code ISIN No.

Bombay Stock Exchange Ltd. Mumbai 514304 INE 772A01016
National Stock Exchange – Mumbai SKUMARSYNS
57
Listing Fees
Paid to the above Stock Exchanges upto March, 2008.
Stock Market Data
The monthly high and low share prices during the year at BSE are as under:
Month High (Rs.) Low (Rs.)

April 2006 59.35 48.00
May 2006 71.95 47.40
June 2006 54.45 35.00
July 2006 62.60 44.05
August 2006 75.40 59.20
September 2006 79.45 68.45
October 2006 81.95 74.00
November 2006 82.40 75.00
December 2006 81.00 73.00
January 2007 81.25 66.75
February 2007 84.25 68.50
March 2007 76.45 59.15
There are no outstanding GDRs/ADRs/Warrants. However FCCB’s of US $ 31 million were outstanding as at 31st
March, 2007.
SHARE TRANSFER SYSTEM:
Application for transfer of shares held in the physical form are received at the Company’s Investors Services Division
(Registrar and Transfer Agent). All valid transfers are processed and effected normally within 15 days from the date
of receipt. The shareholders are given an option to convert the shares into dematerialised form under Simultaneous
Transfer-cum Dematerialization of Shares and letters to that effect are sent to all transferees. Based on their response,
the share certificates are either sent to their addresses or dematerialised with intimation to the shareholders designated
Depository Participants. The entire process is, however, completed normally within a period of 21 days from the receipt
of an application.
Shares held in the dematerialised form are electronically transferred by the Depository Participant and the Registrar and
Transfer Agent is informed periodically by the Depository about the beneficiary holdings to enable the Company to send
all corporate communication and dividend etc.
Physical shares received for dematerialisation are processed and completed within a period of 15 days from the date of
receipt, provided they are in order in every respect. Bad deliveries are immediately returned to the Depository Participant
under advice to the shareholder.
DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH 2007
Of 19,27,03,316 Equity Shares of Rs.10/- each fully paid up.

[held both in physical and demat form (NSDL+CDSL)]
No of Equity Shares held No. of Shareholders % of Shareholders No. of Shareholding % of Shareholding

Upto 5000 18,792 87.01 3,18,00,610 1.65
5001-10000 1,504 6.96 1,29,76,320 0.67
10001-20000 629 2.91 1,01,64,130 0.53
20001-30000 231 1.07 60,11,410 0.31
30001-40000 87 0.40 31,66,520 0.16
40001-50000 71 0.33 34,27,340 0.18
50001-100000 121 0.56 91,16,060 0.48
100001 and above 163 0.76 185,03,70,770 96.02
Total 21,598 100 192,70,33,160 100
58
GROWTH OF EQUITY SHARE CAPITAL
Equity Share Capital as at 31st March 2007
YEAR OF ISSUE NO. OF PAID UP PARTICULARS

EQUITY CAPITAL
SHARES
Share Capital as on 30th 53,54,000 5,35,40,000
September 1993
1993-94 38,50,000 3,85,00,000 Public issue at a Premium of Rs.26/- per Share
1995-96 15,00,000 1,50,00,000 Private Placement of CPS Conversion of Part “A” at par
1996-97 1,25,00,000 12,50,00,000 Equity Shares allotted on Private Placement basis at a
premium of Rs 30/- per share
1996-97 15,00,000 1,50,00,000 Private Placement of CPS Conversion of Part “B” at par
1997-97 4,98,000 49,80,000 Public issue of CPS Conversion of Part “A” at par
1997-98 20,00,000 2,00,00,000 Private Placement of CPS Conversion of Part “C” at par
1997-98 4,98,000 49,80,000 Public issue of CPS Conversion of Part “B” at par
1998-99 3,33,00,000 33,30,00,000 Issue of Equity Shares on Private Placement at a
premium of Rs 5.09 per share
1998-99 7,62,00,000 76,20,00,000 Issue of Equity Shares on Private Placement at a
premium of Rs 5.09 per share
1998-99 6,64,000 66,40,000 Public Issue of CPS Conversion of Part “C” at par
2001-2002 1,68,06,800 16,80,68,000 1. Allotment of 50,06,800 Equity Shares to warrant
holders as per their entitlement @ Rs.10/- per share.
2. Issue of 1,18,00,000 Equity Shares @ Rs.10/- per share
to IDBI on private placement basis on conversion of
overdue interest
2002-2003 Nil Nil Nil
2003-04 Nil Nil Nil
01/10/2004-31/03/2005 Nil Nil Nil
2005-06 Nil Nil Nil
2006-2007 39,42,105 3,94,21,050 Equity Shares allotted on 14/09/2006 upon conversion
of FCCBs
20,42,010 2,04,20,100 Equity Shares allotted on 16/10/2006 upon conversion
of FCCBs
of FCCBs
2,30,52,519 23,05,25,190 Equity Shares allotted on 28/11/2006 under QIP
5,51,894 55,18,940 Equity Shares allotted on 16/12/2006 upon conversion
of FCCBs
of FCCBs
of FCCBs
94,610 9,46,100 Equity Shares allotted on 03/03/2007 upon conversion
of FCCB
19,27,03,316 192,70,33,160
59
Date of payment of Dividend – Not applicable as no Dividend is proposed.
DISTRIBUTION OF EQUITY SHAREHOLDING AS ON 31ST MARCH 2007:
Description No. of Shares Voting Strength

Directors – Individuals 19,06,863 0.99
Promoters – Companies 8,12,83,708 42.18
Relatives / Friends of Directors 1,47,000 0.08
Public – Individuals 84,21,145 4.37
Bodies Corporate 2,38,37,436 12.37
Mutual Funds 36,54,500 1.90
Banks 3,93,183 0.20
NRIs / OCBs 3,29,280 0.17
NRI Companies 25,66,059 1.33
FII 6,99,36,523 36.29
Clearing Member 2,27,619 0.12
Total 19,27,03,316 100.00
DEMAT POSITION AS ON 31ST MARCH 2007:
Total No. of Fully Paid Equity Shares in Percentage Equity Shares in Percentage
up Equity Shares Demat Form % Physical Form %
1 2 3 4 5
19,27,03,316 18,45,43,695 95.77 81,59,621 4.23
Schedule of Company’s listed Securities:
Kind of Security Number Listed as Nominal Value Paid-up Value Total Nominal Total Paid up
(Shares) on 31st March 2007 Per Share Rs. Per Share Rs. Value Rs. Value Rs.
Equity Shares 19,27,03,316 10/- 10/- 192,70,33,160 192,70,33,160
Redeemable
Preference Shares 36,15,660 100/- 100/- 36,15,66,000 36,15,66,000
FINANCIAL CALENDAR:
Board Meeting for consideration of Audited 10th May 2007

Accounts for the year ended 31st March 2007
Posting of Annual Reports On or before 24th June 2007
Book Closure Dates 12th July 2007 to 17th July 2007
(Both days inclusive)
Last date for receipt of proxy forms 15th July 2007
Date, Time and Venue of 17th Annual General 17th July 2007, 4.00 P.M.
Meeting Walchand Hirachand Hall,
Indian Merchants’ Chamber,
IMC Marg, Churchgate,
Mumbai – 400 020
Board Meeting for consideration of unaudited results Within one month from the end of each quarter as stipulated
for the first three quarters of the current financial under the Listing Agreement with the Stock Exchange
year viz. 1st April 2007 to 31st December 2007
Audited Results for the last quarter ending 31st Within three months from the end of the last quarter as
March 2008 stipulated under the Listing Agreement with the Stock
Exchange
60
Auditors’ Certificate on compliance with the conditions of

Corporate Governance under Clause 49 of the Listing Agreement
To the Members,
S.KUMARS NATIONWIDE LIMITED
We have examined the compliance of conditions of corporate governance by S.Kumars Nationwide Limited for the year
ended 31st March 2007, as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchanges
in India.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination
was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the
conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
In our opinion and to the best of our information and according to the explanation given to us, we certify that the
Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing
Agreement.
We state that no investor grievance(s) are pending for a period exceeding one month against the Company as per the
records maintained by the Shareholders/Investors’ Grievances Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.

For Haribhakti & Co
Chartered Accountants
Manoj Daga
Partner
Membership No. 48523
Mumbai

61
S. Kumars Nationwide Limited
“Avadh” Avadhesh Parisar, Shree Ram Mills Premises,
G. K. Marg, Worli, Mumbai - 400 018. (INDIA)
17 ANNUAL GENERAL MEETING - 17TH JULY, 2007 AT 4.00 P.M.
TH
ATTENDANCE SLIP
(To be handed over at the entrance of the Meeting Hall)
Reg. Folio No. or ID No. :
No. of Shares :
I certify that I am a Registered Shareholder/Proxy for the Registered Shareholder of the Company. I hereby record my
presence at the 17th Annual General Meeting being held at Walchand Hirachand Hall, Indian Merchants’ Chamber,
Indian Merchants’ Chamber Marg, Churchgate, Mumbai 400 020 on Tuesday, the 17th July 2007.
Name of the Member/Proxy in Block Letters Member’s/Proxy’s Signature
Notes :
1. A member/proxy wishing to attend the meeting must complete this Attendance Slip and hand it over at the
entrance.
2. If you intend to appoint a proxy, please complete the proxy form below and deposit it at the Company’s
Registered Office atleast 48 hours before the meeting.
S. Kumars Nationwide Limited

“Avadh” Avadhesh Parisar, Shree Ram Mills Premises,
G. K. Marg, Worli, Mumbai - 400 018. (INDIA)
17 ANNUAL GENERAL MEETING - 17 JULY, 2007 AT 4.00 P.M.
TH TH
PROXY FORM
Reg. Folio No. or ID No. :
No. of Shares :
I/We___________________________________________________________________________________________________
of _____________________________________________________________________________________________________
being Member(s) of S. KUMARS NATIONWIDE LTD. hereby appoint ________________________________________
of _____________________________________________________________________________________________________
or failing him/her_________________________________________ of____________________________________________
_________________________________________________________ as proxy to attend and vote for me/us on my/our
behalf at the 17th Annual General Meeting being held on Tuesday, the 17th July 2007 at any adjournment thereof.
Place : Mumbai Affix

Signature Revenue
Date : Stamp
Here
This proxy form duly completed must be received at the Company’s Registered Office atleast 48 hours before the meeting.
62

SKNL Annual Report 2006 2007

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SKNL Annual Report 2006 2007

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ANNUAL REPORT 2006-2007

Dr. A. C. Shah – Chairman

Menswear and Home Worsted Fabrics Spinning and Weaving

4. To appoint Auditors and to fix their remuneration.

Period: 1-4-2007 upto 31-3-2012

(5) Provident Fund as per Companies rules.

(7) Car: Company’s Car will be provided with driver.

Period: 12-01-2007 upto 11-01-2010

By Order of the Board

Details of Directors Seeking Appointment/ Re-appointment at the Annual General Meeting

By Order of the Board

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.

The Board recommends the resolution.

Interpretation of “S. Kumars” in existing Article 2 of Articles of Association reads as follows:

By Order of the Board

KEY FINANCIALS AT A GLANCE

PROFIT AND LOSS ACCOUNT

KEY FINANCIALS AT A GLANCE

DIRECTORATE your Directors make the following statement in terms of

To the best of their knowledge and belief and according

ANNEXURE ‘A’ TO DIRECTOR’S REPORT

Form for Disclosure of particulars with respect to conservation of Energy

1 ELECTRICITY Current year Previous year

Units in lacs 131.16 80.79

Rate/ Units Rs. 4.39 4.27

Through Diesel generator

Units (D.G Units) in lacs 228.84 214.26

Unit /Ltr of Diesel Oil 4.12 2.49

Cost /Unit Rs. 4.60 3.62

2 CONSUMPTION PER UNIT OF PRODUCTION

Electricity per meter of fabrics (units) 0.37 0.37

Form for Disclosure of particulars with respect to Technology Absorption

2) Benefit derived as a result of above R&D Improved product quality.

3) Future plan of action same as above.

4) Expenditure on R&D Not identified separately.

MANAGEMENT DISCUSSION AND ANALYSIS

to the fluctuations of economic and industry cycles. The Cautionary Statement

TO THE MEMBERS OF S. KUMARS NATIONWIDE LIMITED

(i) In view of our comments in paragraph 2(d) and (g)

ANNEXURE TO AUDITORS’ REPORT

Nature of Period Amount Forum

BALANCE SHEET AS AT 31st MARCH, 2007

Investments E 138.28 788.23

Place : Mumbai J. S. SHETTY CFO and President - Finance

Place : Mumbai J. S. SHETTY CFO and President - Finance

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE “A” - SHARE CAPITAL

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE “C” - LOAN FUNDS

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE “E” - INVESTMENTS

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE FORMING PART OF ACCOUNTS

(A) Current Liabilities:

Current Year Previous Year

SCHEDULE “ I” - INCREASE /(DECREASE) IN STOCK

SCHEDULE FORMING PART OF ACCOUNTS

Salaries, Wages, Bonus & Allowances 2,648.50 1,959.99

SCHEDULE FORMING PART OF ACCOUNTS

SCHEDULE “M” - ADMINISTRATIVE EXPENSES

Rent, Rates & Taxes 210.75 40.26

Dealers incentives 1,115.91 856.30