eurotex industries and exports limited narayan patodia managing director shri rajiv patodia...

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1 TWENTY FOURTH ANNUAL REPORT 2009-2010 EUROTEX INDUSTRIES AND EXPORTS LIMITED An ISO 9001 and Oko-Tex Standard 100 Certificate Holder SA 8000 Certified Company BOARD OF DIRECTORS Shri Krishan Kumar Patodia Chairman and Managing Director Shri Hariprasad Siotia Shri Gopal Patodia Shri Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D. K. Patel Shri V. K. Gupta Shri Pratap Padamshi Dundh Shri M. L. Bagaria

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Page 1: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

1

TWENTY FOURTH

ANNUAL REPORT

2009-2010

EUROTEX INDUSTRIES AND EXPORTS LIMITED

An ISO 9001 and Oko-Tex Standard 100 Certificate Holder

SA 8000 Certified Company

BOARD OF DIRECTORS

Shri Krishan Kumar Patodia Chairman and Managing Director

Shri Hariprasad Siotia

Shri Gopal Patodia

Shri Narayan Patodia Managing Director

Shri Rajiv Patodia Executive Director

Shri Gurmukh J. Mirchandani

Shri A. R. Garde

Shri Dharam Paul

Shri D. K. Patel

Shri V. K. Gupta

Shri Pratap Padamshi Dundh

Shri M. L. Bagaria

Page 2: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

2

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

BANKERS

STATE BANK OF INDIA

BANK OF INDIA

IDBI BANK LIMITED

STATE BANK OF PATIALA

PUNJAB NATIONAL BANK

STATE BANK OF HYDERABAD

EXPORT IMPORT BANK OF INDIA

STATE BANK OF INDORE

THE DHANALAKSHMI BANK LIMITED

AUDITORS

LODHA & COMPANY

Chartered Accountants

Mumbai.

REGISTERED AND HEAD OFFICE

809, Raheja Chambers, 8th Floor,

213, Nariman Point,

Mumbai - 400 021.

MILLS

E-23 & E-1, MIDC, Gokul Shirgaon,

Kolhapur - 416 234,

Maharashtra.

SHARE TRANSFER AGENTS

DATAMATICS FINANCIAL SERVICES LIMITED

Plot No.A-16/17 MIDC, Part B, Cross Lane,

Marol, Andheri (East), Mumbai - 400 093.

Page 3: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

3

TWENTY FOURTH

ANNUAL REPORT

2009-2010

NOTICE

NOTICE is hereby given that the 24th Annual GeneralMeeting of the Shareholders of EUROTEX INDUSTRIESAND EXPORTS LIMITED wil l be held at “TheResidence”, An Apartment Hotel, Saki Vihar Road,before Nitie, Powai, Mumbai 400 087 on Saturday, the4th September, 2010 at 9.30 A.M. to transact thefollowing business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Directors’ Report,Auditors’ Report, Audited Balance Sheet and Profitand Loss Account for the year ended 31st March,2010.

2. To appoint a Director in place of Shri A. R. Garde,who retires from office by rotation and, being eligible,offers himself for reappointment.

3. To appoint a Director in place of Shri D. K. Patel,who retires from office by rotation and, being eligible,offers himself for reappointment.

4. To appoint a Director in place of Shri V. K. Gupta,who retires from office by rotation and, being eligible,offers himself for reappointment.

5. To appoint auditors of the Company for the periodcommencing from the conclusion of this AnnualGeneral Meeting till the conclusion of the next AnnualGeneral Meeting and to fix their remuneration.

SPECIAL BUSINESS

6. To consider and, if thought fit, to pass with orwithout modification(s), the followingresolution as an Ordinary Resolution :

“RESOLVED THAT Shri M. L. Bagaria, who wasappointed as an Additional Director with effect from30th October, 2009 on the Board of the Companyin terms of Section 260 of the Companies Act, 1956,and who holds office upto the date of this AnnualGeneral Meeting, and in respect of whom a Noticehas been received from a Member in writing, underSection 257 of the said Act, proposing hiscandidature for the office of the Director, be and ishereby appointed as a Director of the Company,liable to retire by rotation.”

By Order of the Board

Place: MumbaiDate : 29th May, 2010

Registered Office :809, Raheja Chambers, 8th Floor,

213, Nariman Point, Mumbai - 400 021.

G. S. RamakrishnanCompany Secretary

NOTES

a. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF

AND SUCH PROXY NEED NOT BE A MEMBER

b. THE INSTRUMENT APPOINTING PROXY SHOULD,

HOWEVER, BE DEPOSITED AT THE REGISTERED

OFFICE OF THE COMPANY NOT LESS THAN FORTY

EIGHT HOURS BEFORE THE COMMENCEMENT OFTHE MEETING.

c. Explanatory Statement pursuant to Section 173 (2) of theCompanies Act, 1956 in respect of the Special Businessfor Item No. 6 is annexed hereto.

d. Members holding more than one Share Certificate in thesame name under different ledger folios are requested toapply for the consolidation of such folios and send therelevant Share Certificates to the Registrars, M/s. DatamaticsFinancial Services Ltd., Plot No. A-16/17 MIDC, Part B,Cross Lane, Marol, Andheri(East), Mumbai 400 093.

e. Members are requested to notify immediately any changein their address to the Registrars at the address asmentioned above.

f. The Register of Members and the Transfer Books of EquityShares will be closed from 23rd August, 2010 to 4thSeptember 2010 (Both Days inclusive).

g. Pursuant to Section 205A of the Companies Act, 1956,all Unclaimed Dividends upto Financial Year ended

31st March, 1999 have been transferred to the GeneralRevenue Account of the Central Government.

h. The unclaimed dividend for the financial years ended 31stMarch, 2000 and 2001 have been transferred to InvestorEducation and Protection Fund. It may also be noted thatonce the unclaimed dividend is transferred to theGovernment, as above, no claims shall lie in respect ofsuch amount against the company.

Details of Unclaimed Dividend with it’s due date of transferto Investors Education and Protection Fund is as below:

Sr. Year Date of Due Date of

No. ended Declaration transfer to IEPF

1. 31.03.2003 27.09.2003 26.10.2010

2. 31.03.2004 04.09.2004 03.10.2011

3. 31.03.2005 24.09.2005 23.10.2012

4. 31.03.2006 30.09.2006 29.10.2013

i. As per the provisions of the Companies Act, 1956, facilityfor making nominations is available to INDIVIDUALSholding shares in the Company. The NominationForm 2B prescribed by the Government can be obtainedfrom the Registrars and Transfer Agents.

j. Details of the Directors retiring by rotation and seeking

Page 4: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

4

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

Place : MumbaiDated : 29th May, 2010

Registered Office :809, Raheja Chambers, 8th Floor,

213, Nariman Point, Mumbai - 400 021.

By Order of the Board

G. S. RamakrishnanCompany Secretary

SHAREHOLDER INFORMATION

The Company’s securities are listed at the following

Stock Exchanges :

1) The Stock Exchange, Mumbai

1st Floor, New Trading Ring,

Rotunda Building,

Phiroze Jeejeebhoy Towers,

Dalal Street, Fort,

Mumbai 400 001.

2) National Stock Exchange of India Ltd.

Exchange Plaza, 5th Floor,

Plot No. C/1, G-Block,

Bandra-Kurla Complex,

Bandra (E),

Mumbai 400 051.

The Company has paid Annual Listing fees to each of the

above Stock Exchanges for the Finanicial Year 2010-2011.

re-appointment (in pursuance of Clause 49 of the ListingAgreement):

Name of Director Shri A. R. Garde Shri D. K. Patel Shri V. K.Gupta

Date of Birth 17.08.1936 20.10.1947 14.02.1943

Date of Appoint-ment 20.03.1998 29.07.2003 29.07.2003

Qualification B.TEXT from B. E. Chemical B.TEXT andMumbai University Engineering from TEP from Dar-

IIT, Kanpur. den Universityof Virginia

Expertise in spe- 43 Years in R & D He was General 44 years ass-cific functional in Textile. 23 Years Manager SICOM ociation witharea and Years of consultancy in LImited and now various Text-

technical and man- is Financial Advi- ile and Synt-agerial areas of sor to various hetic Fibre Ind-cotton based textil- Companies. ustries at Seni-es. He was Director or level positi-of ATIRA for 7 yrs. ons. Presently,and now is advisor Technical Advi-to Textile Industries sor to Centuryand author of books Enka Ltd. andon Management. Century Rayon

List of Other Nil Malladi Drugs & NilDirectorship held. Pharmaceuticals Ltd.

Godavari Drugs Ltd.Celestial BiologicalsLtd.Polyster Plastics Pvt.Ltd.Minex MetallogicalCo. Ltd.Solar Industries Ltd.

Chairman/Member None None Audit Comm-of the Committees ittee Member.of the Board ofDirectors of theCompany.

Chairman/Member None Malladi Drugs & Ph- Noneof the Committ- armaceuticals Ltd.ee(s) of Board of Remuneration Co-Directors of other mmittee. GodavariCompanies in whi- Drugs Ltd., Polysterch he is a Director. Plastics Pvt. Ltd. -

Audit CommitteeChairman.Shareholders & Grie-vance Committee -Member.Solar Industries Ltd.-Audit CommitteeMember.

Shareholding in Shareholder Nil Nilthe Company

ITEM NO. 6Shri M. L. Bagaria was appointed as Additional Director of theCompany with effect from 30th October, 2009, in accordancewith the provisions of Section 260 of the Companies Act, 1956.Pursuant to Section 260 of the Companies Act, 1956, ShriM. L. Bagaria holds office upto the date of the ensuing AnnualGeneral Meeting. The Company has received Notice from aMember of the Company under Section 257 of the CompaniesAct, 1956, proposing his candidature for the office of the Director.

Information about the appointee:

Background details:Shri M. L. Bagaria is B.Sc Textiles, started his career withShri B.K. Birla Group and later was transferred to A.V. BirlaGroup. He has worked in different units within the groupfrom 1965 to 2002 and rose to the level of unit head. FromMay, 2002 to April, 2004 he worked as Director in HarshitTextiles/Takshila Pvt. Ltd. (formerly known as GwaliorSuitings - A Unit of Grasim Industries Ltd.) August, 2004onwards he worked as Director in Shrishti Textiles Pvt. Ltd.,doing job work for Aditya Birla Nuvo (Indian Rayon, Veraval).

EXPLANATORY STATEMENT UNDER SECTION 173 (2) OF THE COMPANIES ACT, 1956.Presently he is Director in Shrishti TEXCO, Mumbai, whichis a textile consultancy and placement service for seniorexecutives in the Textile Trade.He has sound experience in Textile Industry and associatedfor the last 25 years with the expansion, modernizationand project implementation in the industry. He wasinstrumental in conducting PARTA (Budgetary Controls)conferences of group textile units covering 14 Indian andOverseas units. He contributed to get National EnergyConservation Award for Vikram Woolens which got secondprize in 2000-01.

By Order of the Board

Mumbai

Date : 29th May, 2010

Registered Office :809, Raheja Chambers, 8th Floor,

213, Nariman Point, Mumbai - 400 021.

G. S. RamakrishnanCompany Secretary

Page 5: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

5

TWENTY FOURTH

ANNUAL REPORT

2009-2010

DIRECTORS’ REPORTDear Shareholders,

Your Directors are pleased to present their 24th Annual

Report on the affairs of the Company together with the

Audited Statement of Accounts for the year ended 31st

March, 2010.2009-10 2008-09

(Rs. in lacs) (Rs. in lacs)FINANCIAL RESULTS

Profit before Interest,Depreciation and Tax 1954.88 668.17

Less: Interest and FinanceCharges 1038.14 1111.49

Profit /(Loss) before Depreciation 916.74 (443.32)Less: Depreciation 995.68 962.31

Profit /(Loss) before Tax (78.94) (1405.63)

Add: Exceptional Item (ElectricityDuty Liability Written back relatingto earlier years on receiving HighCourt Order) 281.81 _

Less: Provision for Income Tax _ _

Less: Fringe Benefit Tax _ 9.79

Add: Deferred Tax Assets _ _

Add: MAT Set off _ _

Profit/(Loss) for the year 202.87 (1415.42)

Balance brought forwardfrom previous year (272.96) 929.51

General Reserve transferred toProfit & Loss Account _ 212.95

Balance of Profit /(Loss) Carried toBalance Sheet (70.09) (272.96)

OPERATIONS

During the year, turnover of the Company was Rs.175.09

Crores as compared to Rs.124.47 Crores in the previous

year. The Company has earned a Net Profit after Tax of

Rs.2.03 Crores as against a Net Loss after Tax of Rs.14.15

Crores in the previous year.

AWARDS

Your Company conceived and implemented successfully

an Energy Conservation project for our complete plant

which resulted in substantial power saving. Your Directors

are pleased to inform you that in appreciation of the same

your Company received the National Energy Conservation

Award, Textile Sector, from Government of India, Ministry

of Power for the year 2009. The Award was presented by

Hon. Union Minister of Power, Shri Sushil Kumar Shinde, at

Vigyan Bhawan, New Delhi.

Your Directors are further happy to inform you that once

again your Company has received an award from the

Government of Maharashtra, in recognition of Company’s

Export Performance in Textile – Large Scale Industry

Category for the year 2007-08.

REPORT ON CORPORATE GOVERNANCE,

MANAGEMENT DISCUSSION AND ANALYSIS.

The Audit Committee constituted by the Board has beenfunctioning over the last nine years. The Committee rendersvaluable services to the Board on several issues particularlyon Internal Controls, Accounting Policies and CorporateGovernance norms. The Board of Directors appointed ShriDharam Paul as Chairman of the Audit Committee.

Similarly, the Shareholders / Investors Grievance Committeemet regularly throughout the year and overviewed theoperations of the Share Transfer Registrars, response toInvestors Grievances, progress of dematerialisation and othermatters.

The Company has complied with clause 49 of the ListingAgreement pursuant to SEBI guidelines. Accordingly, reportson Corporate Governance and Management Discussion andAnalysis are enclosed and form part of this Report.

INDUSTRIAL RELATIONS

The Company continued its endeavor in maintaining peaceand harmony across all levels of employment in theOrganisation in the year under review.

PARTICULARS OF EMPLOYEES, CONSERVATION OF

ENERGY, TECHNOLOGY ABSORPTION, FOREIGN

EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, TechnologyAbsorption and Foreign Exchange Earnings and Outgorequired under Section 217 (1) (e) of the Companies Act,1956, is set out in the separate statement attached to thisReport and forms part of it.

The particulars of employees, as required under Section217(2A) of the Companies Act, 1956 are given in seperatestatements attached to this report and form part of it.

DIRECTORS

In terms of the provisions of the Companies Act, 1956 andarticle 104 of the Articles of Association of the Company,Shri A. R. Garde, Shri V. K. Gupta and Shri D. K. Patel retirefrom office by rotation and, being eligible, offer themselvesfor re-appointment.

Appropriate resolutions for the re-appointment of theaforesaid Directors are being moved at the ensuing AnnualGeneral Meeting which the Board recommends for yourapproval.

Director Shri M. D. Sohani resigned from the Board witheffect from 28th April, 2009. Shri M. L. Bagaria has beenappointed as Additional Director with effect from 30thOctober, 2009.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956the Directors confirm that :

1. in the preparation of Annual Accounts, the applicableaccounting standards have been followed;

2. appropriate accounting policies have been selected andapplied consistently, and have made judgments and

Page 6: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

6

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

estimates that are reasonable and prudent so as to give atrue and fair view of the State of Affairs of the Company as

at March 31, 2010 and of the net profit of the Company

for the period from April 1, 2009 to March 31, 2010;

3. proper and sufficient care has been taken for themaintenance of adequate accounting records in

accordance with the provisions of the Companies Act, 1956

for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

4. the Annual Accounts have been prepared on a going

concern basis.

AUDITORS

M/s. Lodha & Co., the Statutory Auditors of the Company,will retire at the forthcoming Annual General Meeting of theCompany and being eligible, offer themselves for re-appointment.

Your Directors request the Shareholders to appoint StatutoryAuditors for the Current Year.

COST AUDITORS

Pursuant to directive of the Central Government, the Companyis required to undergo Cost Audit in respect of its manufacturingoperations every year. Accordingly, M/s A. G. Anikhindi &Co., qualified Cost Auditors have been appointed to

carry out audit of the cost accounts maintained by the Companyfor the year ended 31st March, 2010.

INSURANCE

The Company has taken comprehensive risk cover to insure all

the properties of the Company.

ACKNOWLEDGEMENT

The unprecedented net loss in the last financial year was theresult of the impact of a severe global recession as well as asharp rupee appreciation against the US Dollar. Due to this,it was necessary to seek and secure from our lending bankersa debt restructuring scheme with moratorium on loanrepayments. Our Banks fully supported our company in adifficult time by granting us the requested moratorium. YourDirectors wish to place on record our appreciation for theirsupport and co-operation.

Your Directors express their warm appreciation to theemployees for their diligence and contribution in runningthe mills smoothly.

On behalf of the Board

ANNEXURE “A” TO THE DIRECTORS’ REPORT

ADDITIONAL INFORMATION AS REQUIRED UNDER THE

COMPANIES (DISCLOSURE OF PARTICULARS IN THE

REPORT OF BOARD OF DIRECTORS) RULES, 1988.

(A) CONSERVATION OF ENERGY :

(a)Energy Conservation Measures Taken:

The Company has been taking continuous steps toconserve the energy and minimize energy cost at alllevels. The Company is installing latest energyefficient equipment and motors in place of old onesto reduce energy consumption. The Company hastaken the assistance of an expert team of SITRA(South India Text i le Research Associat ion),Coimbatore for Energy Conservation.

(b)Additional Investments and Proposal, if any,being implemented for reduction ofconsumption of energy:

The Company as a policy takes necessary steps forinvestment in energysaving devices whereverapplicable. The Company has conducted acomprehensive Energy Audit for the entire plant andas a result, has improved performance and hasoptimised consumption of energy.

(c)Impact of measures at (a) and (b) for reductionof energy consumption and consequent impacton the Cost of Production of goods:

With the above measures taken, the Company hasderived significant reduction in energy consumption.

(d)Total energy consumption and consumption perunit of production in the prescribed Form “A” isattached.

(B) TECHNOLOGY ABSORPTION:Efforts made in Technology Absorption :Details are provided in Form “B” annexed hereto.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO:(a)1) Activity relating to Exports:

The Company is engaged in Raw Cotton, Yarnand Fabric Exports.

2) Initiative taken to increase Exports:The Company regularly explores possibility ofdeveloping new qualities to help increase itsexports and find new buyers and new market forits high quality products.

3) Development of new export markets forproducts and services:The Company keeps a close association with itstraditional and new buyers and explorescontinuously the possibility of finding new exportmarkets.

4) Export Plan:The order books of the Company are sufficientlyfull at present.

(b)Total Foreign Exchange used and earned: (Rs. in Lacs)

i) CIF Value of Imports 1590.64

ii) Expenditure in Foreign Currency 328.53

iii) Foreign Exchange Earned 12357.10

On behalf of the Board

Mumbai K. K. PATODIA

Dated : 29th May, 2010. Chairman

K. K. PATODIAChairman

Place : MumbaiDate : 29th May, 2010

Page 7: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

7

TWENTY FOURTH

ANNUAL REPORT

2009-2010

REPORT ON CONSERVATION OF ENERGY ETC., forming part of the Directors’ Report

Production Current PreviousUnit Year Year

A) POWER AND FUELCONSUMPTION1) Electricity

a) Purchased (Units) 4,21,09,950 4,00,53,750Total Amount (Rs.) 18,56,74,247 16,82,91,482Rate/Unit (Rs.) 4.41 4.20

b) Own Generationi) Through Diesel

Generator (Units) 3,25,180 32,36,230Units per LTR. ofDiesel/Furnace Oil 3.55 3.54Cost/Unit (Rs.) 50.14 11.43

ii) Through SteamTurbine/GeneratorUnits _ _Units per LTR. ofFuel Oil/gas _ _Cost/Unit (Rs.) _ _

2) CoalQuantity (in Tonnes) _ _Total Cost _ _Average Rate (Rs.) _ _

3) Furnace Oil/L.S.H.S.Quantity (in K. Ltrs.) _ _Total Amount _ _Average Rate _ _

4) Others/InternalGeneration _ _Quantity _ _Total Cost _ _Rate/Unit _ _

B) CONSUMPTION PER UNITOF PRODUCTION1) Electricity (KWH)

Yarn

Per Kg.

5.64 6.732) Furnace Oil/L.S.H.S. _ _3) Coal (M.T.) _ _4) Others _ _

On behalf of the Board

FORM A

Form for Disclosure of Particulars with respect toConservation of Energy

ANNEXURE “B” TO THE DIRECTORS’ REPORTPARTICULARS OF EMPLOYEES - THE INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE

COMPANIES ACT, 1956 OF THE EMPLOYEES OF THE COMPANY IS AS UNDER:

Sr. Name Designation/ Age Remuneration Qualification Experience Date of Previous ServiceNo. Nature of (Years) received (Years) Joining before this and

Duties (Rs.) designation

A) Employees who worked throughout the accounting year and whose remuneration aggregating Rs.24 lacs ormore per year:

1. Shri K. K. Patodia Chairman 65 * 44,21,788 B.Sc.Textiles 45 01.10.1988 PBM Polytex Ltd.

and Managing (Hons.) Managing Director

Director

B) Employees who worked during the part of the year and whose remuneration aggregating Rs. 24 Lacs or more per year:

NIL

* Remuneration includes contribution to Provident Fund and Superannuation Funds.

MumbaiDate : 29th May, 2010

On behalf of the Board

K. K. PATODIA

Chairman

FORM B

Form for Disclosure of Particulars with respect toTechnology Absorption

RESEARCH AND DEVELOPMENT (R & D)1) Specific areas in which R & D carried out by

the Company:R & D activities are carried out continuously to producegood quality of Yarns and Fabrics for exports.

2) Benefits derived as a result of the above R & D:With the result of the R & D activities carried out, theCompany has been able to produce quality Yarns andFabrics to international standards.

3) Future Plan of Action:The Company continues its efforts to maximise itsproductivity and at the same time enhance quality of itsproducts.

4) Expenditure on R & D:Expenditure on R & D has been shown under respectiveheads of expenditure in the Profit and Loss Account asno separate account is maintained for the same.

TECHNOLOGY ABSORPTION, ADAPTATION ANDINNOVATION

1) Efforts, in brief, made towards technologyabsorption and innovation:The Company has not utilised any imported technology.

2) Benefit derived as a result of the above efforts:N.A.

3) Details about import of technology during thelast 5 years:N.A.

On behalf of the Board

Place : MumbaiDate : 29th May, 2010

K. K. PATODIA

ChairmanPlace : MumbaiDate : 29th May, 2010

K. K. PATODIA

Chairman

ANNEXURE “A” TO THE DIRECTORS’ REPORT (Contd.)

Page 8: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

8

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

Declaration regarding compliance with the code of conduct and ethics policy of the Company by BoardMembers and senior management personnelThis is to confirm that the Company has adopted Code ofConduct and Ethics Policy for the Board of Directors andAssociates of the Company, which is available at our website-www.eurotexgroup.com.

I declare that the Board of Directors and senior management

personnel have affirmed compliance with the Code ofConduct and Ethics Policy of the Company.

a) Industry Structure and Development:The Company is having cotton spinning and knittedfabrics manufacturing unit. Textile is the oldest and mostimportant industry with high employment potential. Thetextile industry provides jobs for semi-skil led andunskilled labourers, women in particular, on a largescale in the country.Eurotex has a state of art modern spinning mil lsmanufacturing and exporting cotton yarn all over theworld.

b) Opportunities and Threats:In the post quota regime, the Indian textile exportershave got very good opportunity for increasing theirexport of cotton yarn and value added products. Dueto very good demand from domestic export orientedgarment manufacturers, the cotton yarn manufacturershave got good opportunities in local markets also.At the same time the Indian textile industry is facingthreat from other textile exporting countries due to highpower cost, cost of Raw materials and rigid labour lawsof our country.

c) Segment or productwise performance:The Company operates primarily in one businesssegment viz cotton yarn and knitted fabric and has itsproduction facilities and assets located in India. Hencesegment-wise or product-wise performance is not given.

d) Outlook, Risks and Concern:The Company has invested substantial ly inmodernization and upgradation of its production facilitiesand the Company is poised to take maximum advantageof demand in quality goods in post quota regime.

The exchange rate fluctuations, power cost increase dueto increase in oil prices and state grid power rates arethe risks and matters of concern and may adversely affectits profitability.

e) Internal control systems and their adequacy:The Company has got adequate internal control systemscommensurate with the size of all departments.

f) Financial performance with respect tooperational performance:The financial and operational performances are aselaborated in the Directors’ Report.

g) Development in Human Resources / IndustrialRelations Front:The Company continued its endeavour in maintainingpeace and harmony at all levels of employment in theorganisation in the year under review.

h) Cautionary StatementThe statement in the report may be forward lookingwithin the meaning of applicable laws or regulations.These statements are made on certain assumptions andexpectations of future events. Actual results could differmaterially from those expressed or implied. Importantfactors that could make a difference to the Company’soperations include raw material availability and prices,cyclical demand and pricing in the Company’s principalmarkets, changes in Government regulations, taxregimes, economic developments within India and theCountries in which the Company conducts businessand other incidental factors.The Company and i ts Directors assume noresponsibi l i ty in respect of the forward lookingstatements herein which may undergo changes in thefuture on the basis of subsequent developments,information or events.

On behalf of the Board

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

CHIEF EXECUTIVE OFFICER’S CERTIFICATIONTo,The Board of DirectorsEurotex Industries And Exports Limited,

I, the undersigned, in my capacity as the Chief Executive Officerof Eurotex Industries And Exports Limited (“the Company”),to the best of my knowledge and belief, certify that:

(a) I have reviewed financial statements and cash flowstatement for the year ended 31st March, 2010 and to thebest of my knowledge and belief, state that:

(i) these statements do not contain any materially untruestatement or omit any material fact or contain statementthat might be misleading;

(ii) these statements together present a true and fair viewof the Company’s affairs and are in compliance withexisting accounting standards, applicable laws andregulations.

(b) I further state that, to the best of my knowledge and belief,there are no transactions entered into by the companyduring the year which are fraudulent, illegal or violative ofthe Company’s Code of Conduct as adopted by theCompany.

(c) I am responsible for establishing and maintaining internal

controls for financial reporting and I have evaluated theeffectiveness of internal control systems of the Companypertaining to financial reporting and have disclosed to theAuditors and the Audit Committee, deficiencies in thedesign or operation of such internal controls, if any, ofwhich I am aware and the steps I have taken or propose totake to rectify these deficiencies.

(d) I have indicated, based on my most recent evaluation,wherever applicable, to the Auditors and Audit Committee

(i) significant changes, if any, in the internal control overfinancial reporting during the year;

(ii) significant changes, if any, in the accounting policiesmade during the year and that the same have beendisclosed in the notes to the financial statements and

(iii) instances of significant fraud of which we have becomeaware and the involvement therein, if any, of themanagement or an employee having a significant rolein the Company’s internal control system over financialreporting.

Place : MumbaiDate : 29th May, 2010

K. K. PATODIAChairman

Place : MumbaiDate : 29th May, 2010

K. K. PATODIAChairman

and Managing Director

Place : MumbaiDate : 29th May, 2010

K. K. PATODIAChairman

Page 9: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

9

TWENTY FOURTH

ANNUAL REPORT

2009-2010

CORPORATE GOVERNANCE REPORT1. PHILOSOPHY OF THE COMPANY ON CODE OF

CORPORATE GOVERNANCEThe Company believes in highest standards of CorporateGovernance and has put in place the systems for ensuringstrict adherence to various norms laid down in clause 49 ofListing Agreement. For us effective Corporate Governanceis about commitment to values and ethical business conductwhich alone can guarantee business success by enhancingShareholders’ value in the long run.

We understand that Corporate Governance is a continuousjourney and not a destination. The Company endeavors toachieve transparency, accountability, integrity andresponsibility and continues to focus on good CorporateGovernance.

Corporate Ethics:The Company adheres to highest standards of businessethics, compliance with statutory and legal requirementsand commitment to transparency in business dealings.

a. Code of Conduct for Board Members and SeniorManagement:The Board of Directors has adopted the Code of Conductfor its Members and Senior Management. The Boardhighlights Corporate Governance as the cornerstone forthe sustained Management Performance for serving all thestakeholders and for instilling pride in its business dealings.

The Code is applicable to all the Directors and specifiedSenior Management Executives. The Code impresses uponthe Directors and senior Management Executive to upholdthe interest of the Company and its Stakeholders andendeavors to fulfill the fiduciary obligation towards them.The Code also mandates that Directors and SeniorManagement Executives would uphold highest standardof integrity, honesty, ethical conduct and fairness in theirdealings and shall exercise utmost good faith, due careand integrity in performing their duties. The Code ofConduct is posted at Company’s website atwww.eurotexgroup.comb. Code of Conduct for prevention of Insider Trading:The Company has adopted a Code of Conduct forprevention of insider trading for its Directors and SeniorManagement personnel. The Code lays down the guidelinesand procedures to be followed, disclosures to be madewhile dealing with the Shares of the Company. TheCompany Secretary has been appointed as the Complianceofficer, and is responsible for adherence to the Code.

2. BOARD OF DIRECTORSThe business of the Company is managed by the Board ofDirectors. The Board formulates the strategy, regularlyreviews the performance of the Company and ensures thatthe previously agreed objectives are met on a consistentbasis. The Managing Director and Executive Directormanage the day to day operations of the Company.

The Board of Directors comprises of three Executive Directors,nine Non-Executive Directors. Six of the Directors areIndependent Directors.Name of the Director Position

ExecutiveShri Krishan Kumar Patodia Chairman and Managing DirectorShri Narayan Patodia Managing DirectorShri Rajiv Patodia Executive DirectorNon ExecutiveShri H. P. SiotiaShri Gopal PatodiaShri Gurmukh J. MirchandaniNon-Executive & IndependentShri A. R. GardeShri Dharam PaulShri Pratap Padamshi DundhShri D. K. PatelShri V. K. GuptaShri M. L. BagariaTotal No. of Directors = 12

A. Board ProcedureBoard members are given appropriate documents andinformation in advance of each Board and Committee Meetingto enable the Board to discharge its responsibilities effectivelyby taking well informed decisions. To enable the Board todischarge its responsibility effectively, the Managing Directorreviews Company’s overall performance. The functionsperformed by the Board includes, in addition to the legal matterscompulsorily required to be performed by it, review of:� Strategy and business plan� Annual operating and capital expenditure budgets� Investment and exposure limits� Compliance with statutory/regulatory requirements

and review of major legal issues� Approval of quarterly/annual results� Review of the Minutes of the Audit Committee,

Shareholders and Investors Grievance Committeeand Board Committee

� Matters relating to Foreign Exchange Exposure.B. Board Meetings and AttendanceDuring the financial year 2009-10 Five Board Meetings wereheld on 29th April, 2009, 26th June, 2009, 31st July, 2009,30th October, 2009 & 30th January, 2010. The maximumtime gap between any two Meetings was not more than threecalendar months. Details of attendance at the Board Meeting,Directorship in other Companies and membership inCommittees thereof of each Director are as follows:

Name Attenda- Attend- Directorship Committeeo f nce at the ance at of other MembershipsDirector Board last AGM Companies *Mem- *Cha-

Meeting ber irman

Shri K. K. Patodia 4 No 10 1 1Chairman &Managing Director

Shri H. P. Siotia 5 Yes 6 3 1

Shri Gopal Patodia - No 6 _ _

Shri Narayan Patodiia 4 No 5 1 _

Managing Director

Shri Rajiv Patodia 4 Yes 4 _ _

Executive Director

Shri G.J.Mirchandani 5 Yes _ 2 _

Shri A. R. Garde 2 No _ _ _

Shri Dharam Paul 5 Yes 1 2 2

Shri Pratap P. Dundh 5 Yes 2 _ _

Shri Dilip K. Patel 3 Yes 6 _ _

Shri Vinod K. Gupta 5 No _ 1 _

Shri M. L. Bagaria 1 2 _ _

(Appointed w.e.f.30.10.2009)

3. AUDIT COMMITTEE

Board of Directors has formed an Audit Committee whichhas the following powers:a. To investigate into any matter referred to it by the Board

and for that purpose to have full access to the informa-tion contained in the records of the Company andexternal professional advice, if necessary.

b. To investigate any activity within its terms of reference.c. To oversee the Company’s Financial Reporting pro-

cess and the disclosure of its financial statement is cor-rect, sufficient and credible.

d. To recommend the appointment and removal ofexternal auditor, fixation of audit fees and also approvalfor payment of any other services.

e. Reviewing with the Management the annual financialstatements before submission to the Board.

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resolution passed by the members at the General Meeting.(b) Remuneration paid to Non-Executive Directorsfor the year ended 31st March, 2010The Non Executive Directors have been paid sitting fees forattending Board / Committee Meeting, at the rate of Rs.5000/-per meeting. No Sitting Fee is paid for attending Shareholders’/Investors’ Grievance Committee Meeting.The details of fees paid for attending the Board Meeting, AuditCommittee and Remuneration Committee for the year ended31st March, 2010 to the Directors are as follows:

(Amount in Rs.)

Sr. Name of Director Board Audit RemunerationNo. Meeting Committee Committee

1 Shri H. P. Siotia 25,000/- 25,000/- 5,000/-

2 Shri G.J.Mirchandani 25,000/- 5,000/-

3 Shri Dharam Paul 25,000/- 25,000/- 5,000/-

4 Shri D. K. Patel 15,000/-

5 Shri V. K. Gupta 25,000/- 25,000/-

6 Shri A. R. Garde 10,000/-

7 Shri P. P. Dundh 25,000/-

8 Shri M. L. Bagaria 5,000/-

* Remuneration paid to Executive Directors for theyear ended 31st March, 2010

Name Shri K. K. Shri Narayan Shri RajivPatodia Patodia Patodia

Chairman Managing Executiveand Manag- Director Directoring Director

Salary (Rs.) 21,00,000 15,00,000 9,00,000

Others 23,21,788 13,88,010 12,49,362

Appointmentvalid upto 30/09/2012 31/12/2012 30/09/2012

Stock OptionDetails NIL NIL NIL

5. SHAREHOLDERS/ INVESTORS GRIEVANCECOMMITTEE

Members : Shri K. K. Patodia, Shri H. P. Siotia, Shri NarayanPatodia and Shri G. J. MirchandaniChairman: Shri H. P. Siotia.The Company Secretary acts as the Secretary to the Committee.The functions of the Committee include redressal of investors’grievance pertaining to:

� Transfer/Transmission of Shares.� Issue of duplicate Share Certificates.� Review of Shares dematerialised.� Dividend� All other matters related to Shareholders

During the year 2009- 2010, four meetings were held.Total number of service requests, enquiries, queries receivedduring the year was thirty six and all of them were resolved.Total number of investor complaints received during the yearwas three and all of them have been resolved. :Total number of meetings attended by members :

Members Meetings Attended

Shri K. K. Patodia 4

Shri H. P. Siotia 4

Shri G. J. Mirchandani 4

Shri Narayan Patodia Nil

f. Reviewing with management, external and internalauditors, the adequacy of internal control systems.

g. Reviewing the Company’s financial and riskmanagement policies.

h. To look into the reasons for substantial defaults in thepayment to the Depositors, Debenture holders,Shareholders (in case of non-payment of declareddividends) and Creditors.

i. Discussion with Statutory Auditors before the auditcommences, about the nature and scope of the auditas well as post-audit discussion to ascertain any areasof concern.

MEMBERS: Shri Dharam Paul, Shri H P Siotia, Shri V. K. Gupta

CHAIRMAN: Shri Dharam Paul

The Company Secretary acts as the Secretary to the Committee.The Statutory Auditors, Internal Auditors and Cost Auditorsattend the Audit Committee Meeting by invitation.

Amongst the Board of Directors, two independent Directorsare members of Audit Committee. The Committee hasmembers with sound knowledge of finance, accounting andlaw. The Committee deals with all matters of financial reporting,internal controls, risk management etc. The power and role ofaudit committee is as per guidelines set out in the ListingAgreement. It meets at least four times in a year and reviewsthe quarterly and annual financial statements before they aresubmitted to the Board. The Committee monitors anyproposed change in accounting policy, accounting implicationsof major transactions, etc. The committee also closely reviewsthe adequacy of internal controls, formulates and monitorsthe annual audit plan.

Five Audit Committee Meetings were held during financialyear 2009-10. These Meetings were held on 29th April, 2009,26th June, 2009, 31st July, 2009, 30th October, 2009 and30th January, 2010.

The attendance at the meeting is as under:

NAME OF MEMBERS NO. OF MEETINGS ATTENDED

Shri Dharam Paul 5

Shri H. P. Siotia 5

Shri V. K. Gupta 5

Chairman of the Meeting attended the Annual GeneralMeeting held on Saturday, 26th September 2009.

4. REMUNERATION COMMITTEE

MEMBERS : Shri Dharam Paul , Shri H P Siotia andShri G. J. Mirchandani

CHAIRMAN : Shri Dharam PaulThe Company Secretary acts as the Secretary to the Committee.

NAME OF MEMBERS NO. OF MEETINGS ATTENDED

Shri Dharam Paul 1

Shri H. P. Siotia 1

Shri G. J. Mirchandani 1

(a) Remuneration Policy :

The Remuneration Committee is responsible for devising policyfor compensation and benefits for Executive Directors. Theremuneration of Managing Directors and Executive Directorshas been approved under Section 269 read with Schedule XIIIof the Companies Act, 1956. The remuneration paid to theManaging Directors and Executive Director is in line with thestandards of Textile Industry.

The Executive Directors are paid remuneration in terms of

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11

TWENTY FOURTH

ANNUAL REPORT

2009-2010

2. Financial Calendar(tentative)Annual General Meeting: 4th September, 2010

Results for quarter ending30th June, 2010: Last week of July, 2010Results for quarter ending30th September, 2010: Last week of October, 2010Results for quarter ending31st December, 2010: Last week of January, 2011Results for quarter ending31st March, 2011: First week of May, 2011

3. Book closure Date 23rd August, 2010 to4th September, 2010(Both days inclusive)

4. Registered Office EUROTEX INDUSTRIES ANDEXPORTS LTD.809, Raheja Chambers, 8th Floor213, Nariman Point,Mumbai 400 021.

5. Listing Details ofEquity Shares a) Bombay Stock Exchange Ltd.

Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai 400 001.

b) National Stock Exchangeof India Ltd.Exchange Plaza, 5th Floor,Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (E),Mumbai 400 051.

Listing fees for the Financial Year 2010-11 has been paid to theStock Exchanges where the shares of the Company are listed.

6. Stock code 1.521014 at Bombay Stock Exchange2.EUROTEXIND at National Stock Exchange

7. Depositories forEquity SharesNational Securities ISINDepository Ltd.Central Depository INE022C01012Services (India) Ltd.

8. Stock PerformanceStock price Data:

Bombay Stock Exchange (BSE) (In Rs.)

Year High LowApril 2009 12.07 09.63May 2009 16.94 10.50June 2009 20.25 16.10July 2009 17.85 15.55August 2009 19.50 17.00September2009 25.05 18.50October 2009 28.20 22.40November 2009 26.00 21.10December 2009 30.30 23.20January 2010 37.25 25.00February 2010 29.00 20.40March 2010 33.45 22.05National Stock Exchange (NSE) (In Rs.)Year High LowApril 2009 11.10 09.00May 2009 14.35 10.35June 2009 19.95 15.10July 2009 17.10 15.65August 2009 19.00 17.00September 2009 25.95 18.50October 2009 27.50 22.40November 2009 25.60 20.40December 2009 30.60 23.30January 2010 36.50 24.95February 2010 29.00 20.30March 2010 32.80 22.35

6. GENERAL BODY MEETINGS :

Details of Annual General Meetings held during the last threeyears:

Year AGM/EGM Location Date Time

2009 AGM “The Residence”An Apartment HotelSaki Vihar RoadBefore Nitie, Powai,Mumbai 400 087 26.09.09 9.30 AM

2008 AGM “The Residence”An Apartment HotelSaki Vihar RoadBefore Nitie, Powai,Mumbai 400 087 27.09.08 9.30 AM

2007 AGM “The Residence”An Apartment HotelSaki Vihar RoadBefore Nitie, Powai,Mumbai 400 087 29.09.07 9.30 AM

Whether Special Resolutions :

(a) Were put through Postal Ballot last year- No

(b) Details of Voting pattern- N. A.

(c) Person who conducted the Postal Ballot Exercise- N. A.

(d) Are proposed to be conducted through Postal Ballot- No

(e) Procedure for Postal Ballot- N. A.

7. DISCLOSURES

There are no materially significant related party transactionsi.e., transactions material in nature, with its promoters, theDirectors or the Management having potential conflict withthe interest of Company at large.

There has not been any non-compliance by the Companyand no penalties or strictures imposed on the Company byStock Exchanges or SEBI or any statutory authority, or anymatter related to Capital Markets, during the last three years.

Compliance with the Clause 49 of the Listing Agreement:

Pursuant to sub-clause VII of clause 49, the Companyconfirms that it has complied with all mandatoryrequirement prescribed in Clause 49 of the ListingAgreement. As regards non mandatory requirement theCompany has complied with the requirement ofRemuneration Committee.

8. MEANS OF COMMUNICATION

The Company generally publishes the quarterly, half-yearly,nine months and annual audited financial results in FREEPRESS JOURNAL (National) and NAVA SHAKTI (Regional- Marathi) news papers.

All material information about the Company is promptlysent through facsimile to Stock Exchanges where theCompany’s shares are listed and released to the press.

As required by sub-clause IV(F) of clause 49 of the ListingAgreement, Management Discussion and Analysis isprovided elsewhere in the Annual Report.

9. SHAREHOLDERS’ INFORMATION

1. Annual General Meeting:

� Date and Time Saturday 4th September, 2010at 9.30 a.m.

� Venue ‘The Residence’,An Apartment Hotel,Saki Vihar Road, Before Nitie,Powai, Mumbai – 400 087.

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13. Categories of shareholding as on March 31, 2010:

Category No. of % of Shares held Shareholding

Promoters 52,40,644 59.89Indian FinancialInstitutions,Banks,Mutual Funds 53,980 00.62NRIs/OCBs 62,896 0.72Others 33,92,345 38.77

Total 87,49,865 100.00

14. Dematerialisation of Shares and Liquidity:

42.09% of total Equity Capital is held in dematerialisedform with NSDL and CDSL as on 31st March, 2010.Trading in Equity Shares of the Company is permitted onlyin dematerialised form w.e.f. April 28, 2001 as pernotification issued by Securities and Exchange Board ofIndia (SEBI)

15. The Company promotes ethical behaviour in all busi-ness activities and has put in place Whistle BlowerPolicy, for its employees to report to the Managementinstances of unethical behaviour, actual or suspectedfraud or violation of Company’s Code of Conduct orethics policy.

16. The CEO and CFO of the Company give certificationon financial reporting and internal controls to theBoard in terms of Clause 49.

17. Plant Locations : Plot E-23 and Plot E-1, MIDC,Gokulshirgaon, Taluka - Karveer,Kolhapur, 416234, Maharashtra.

18. Address for : Eurotex Industries And Exportscorrespondence Limited

809, Raheja Chambers,8th Floor213, Nariman PointMumbai 400 021Phone : 022-22041408Fax : 022-22044139Email: [email protected]

19. Compliance Officer : G. S. RamakrishnanCompany Secretary

For and on behalf of the Board of Directors

K. K. PatodiaChairman

and Managing Director

9. Comparison of Share Prices with broad based index likeBSE SENSEX: Since the company is in the textile industrywhich does not have proper representation in the BSESENSEX, the comparison of share prices with BSESENSEX movement is not given.

10. Registrar & Transfer Datamatics Financial Services Ltd.Agents: Plot No. A-16/17,

MIDC, Part B, Marol, Andheri (E)Mumbai 400 093Phone No.: 022 - 66712156Fax No.: 022 - 66712161

11. Share Transfer System:

Shares sent for transfer in physical form are registeredby Registrar and Share Transfer Agents within 21 daysof receipt of the documents, if found in order. Sharesunder objection are returned within two weeks. Allrequests for dematerialisation of Shares are processedand the confirmation is given to the respectivedepositories i.e. National Securities Depository Limited(NSDL) and Central Depository Services Limited(CDSL) within 15 days.

12. Distribution of shareholding as on March 31, 2010:

No. of Equity No. of No. of % of ShareShares Shareholders Shares held holding

Upto 500 7,029 9,73,611 11.14

501 to 1000 334 2,68,008 03.06

1001 to 2000 123 1,84,877 02.11

2001 to 3000 57 1,43,045 01.63

3001 to 4000 22 77,404 00.88

4001 to 5000 26 1,18,957 01.36

5001 to 10,000 19 1,44,017 01.65

10,001 to 50,000 15 3,76,502 04.30

50,001 and above 11 64,63,444 73.87

Total 7,636 87,49,865 100.00

MumbaiDate : 29th May, 2010

ToThe Members ofM/s. Eurotex Industries And Exports Ltd.

We have examined the compliance of conditions of CorporateGovernance by M/s. Eurotex Industries And ExportsLimited (“The Company”), for the year ended on 31st March2010, as stipulated in clause 49 of the Listing Agreement ofthe Company with Stock Exchanges of India.The compliance of conditions of Corporate Governance is theresponsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by theCompany for ensuring the compliance of the conditions of theCorporate Governance. It is neither an audit nor an expressionof opinion on the financial statements of the Company.In our opinion and to the best of our information and accordingto the explanations given to us and based on the representations

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

CERTIFICATEgiven by the management of the Company, we certify that theCompany has complied in all material respects with theconditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.We further state that such compliance is neither an assuranceas to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted theaffairs of the Company.

For LODHA & COChartered Accountants

(A. M. HARIHARAN)Partner

(M. No. 38323Firm No. 301051E)

MumbaiDate : 29th May, 2010

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13

TWENTY FOURTH

ANNUAL REPORT

2009-2010

AUDITORS’ REPORT

TO

THE MEMBERS OF

EUROTEX INDUSTRIES AND EXPORTS LIMITED

1. We have audited the attached Balance Sheeto f EUROTEX INDUSTRIES AND EXPORTSLIMITED as at 31st March, 2010 and also theProfi t and Loss Account and the Cash FlowStatement for the year ended on that dateannexed thereto. These f inancial s tatementsa r e t h e r e s p o n s i b i l i t y o f t h e C o m p a n y ’ smanagement. Our responsibility is to expressan opinion on these financial statements basedon our audit.

2 . We conducted our audit in accordance withauditing standards generally accepted in India.Those s tandards requ i re tha t we p lan andp e r f o r m t h e a u d i t t o o b t a i n r e a s o n a b l ea s s u r a n c e a b o u t w h e t h e r t h e f i n a n c i a lstatements are free of material misstatement.An audit includes examining, on a test basis,e v i d e n c e s u p p o r t i n g t h e a m o u n t s a n ddisclosures in the financial statements. An audita l s o i n c l u d e s a s s e s s i n g t h e a c c o u n t i n gprinciples used and significant estimates madeby management , as we l l as eva lua t ing theoveral l f inancial s tatement presentat ion. Webelieve that our audit provides a reasonablebasis for our opinion.

3. As r equ i r ed by t he Compan ie s (Aud i to r ’ sRepor t ) Order, 2003 i ssued by the Centra lGovernment in terms of Section 227 (4A) ofthe Companies Act, 1956 (hereinafter referredto as the “Act”), we enclose in the Annexure as ta t emen t on the ma t t e r s spec i f i ed in theparagraphs 4 and 5 of the said Order.

4 . Fur the r to our comment s in the Annexurereferred to in paragraph 3 above, we reporttha t :

a) We have obtained all the information andexp lana t ions , wh i ch to the be s t o f ou rknowledge and belief were necessary for thepurposes of our audit;

b) In our opinion, proper books of account asrequ i red by law have been kep t by theC o m p a n y s o f a r a s a p p e a r s f r o m o u rexamination of those books;

c) The Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by thisreport are in agreement with the books ofaccount ;

d) In our opinion, the Balance Sheet, Profi tand Loss Account and Cash Flow Statementdealt with by this report comply with theA c c o u n t i n g S t a n d a r d s p r e s c r i b e d b yCompanies (Accounting Standards) Rules2006, to the extent applicable;

e) On the basis of the written representationsreceived from directors as on 31st March,2010 and taken on record by the Board ofD i r e c t o r s , w e r e p o r t t h a t n o n e o f t h edirectors is disqualified as on 31st March,2010 from being appointed as a director ofthe Company in term of clause (g) of sub-section (1) of section 274 of the Act;

f ) I n o u r o p i n i o n a n d t o t h e b e s t o f o u ri n f o r m a t i o n a n d a c c o r d i n g t o t h eexplanations given to us, the said accountsread together with ‘Significant AccountingPolicies and Notes to Accounts’ in ScheduleNo.18 and other notes appearing elsewherei n t h e a c c o u n t s , g i v e t h e i n f o r m a t i o nr e q u i r e d b y t h e A c t i n t h e m a n n e r s orequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet, of thestate of affairs of the Company as at 31stMarch, 2010;

(ii) in the case of the Profit and Loss Account,of the profit of the Company for the yearended on that date; and

(iii) in the case of Cash Flow Statement, ofthe cash flows for the year ended on thatdate.

For LODHA & COMPANYChartered Accountants

(A. M. HARIHARAN)

Partner

(M. No. 38323Firm No. 301051E)

MumbaiDated : 29th May, 2010

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ANNEXURE REFERRED TO IN PARAGRAPH 3OF AUDITORS’ REPORT OF EVEN DATE ONTHE FINANCIAL STATEMENTS FOR THE YEARENDED 31ST MARCH, 2010 OF EUROTEXINDUSTRIES AND EXPORTS LIMITED

On the basis of such checks as we consideredappropriate and according to the information andexplanations given to us during the course of our audit,we state that:

1. The Company has maintained proper recordsshowing full particulars including quantitativedetails and situation of fixed assets. All the fixedassets have been physical ly verif ied by themanagement according to the regular programmeof periodical verification in a phased manner,which in our opinion is reasonable having regardto the size of the Company and the nature of itsfixed assets. There were no discrepancies noticedon such physical verification. No substantial partof the fixed assets has been disposed off by theCompany during the year.

2. (a) The inventory has been physically verifiedby the management at reasonable intervalsduring the year. Inventory in-transit havebeen veri f ied by the management withreference to confirmations or statement ofaccounts or subsequent receipt of goods.

(b) The procedures for physical verification ofinventory followed by the management arereasonable and adequate in relation to thesize of the Company and nature of i tsbusiness.

(c) The Company is maintaining proper recordsof inventory. There were no discrepanciesnoticed on verification between the physicalstock and book records.

3. During the year, the Company has taken interestfree loan from a body corporate as promoter’scontribution, covered in the register maintainedunder section 301 of the Act, terms and conditionwhereof are prima-facie, not prejudicial to theinterest of the company. Maximum amount dueduring the year is Rs. 3,00,000 & the year endbalance is Rs. 3,00,000.

4. In our opinion and according to the informationand explanations given to us, having regard tothe explanations that some of the items purchasedand sold are of the special nature and suitablealternative source does not exist for obtainingcomparable quotations, there are adequate

internal control procedures commensurate with thesize of the Company and nature of its businessfor purchase of inventory, fixed assets and withregard to the sale of goods. During the course ofour audit, no major weakness has been noticedin the internal control system.

5. (a) According to the information and explana-tions given to us, we are of the opinion thatparticulars of contracts or arrangements re-ferred to in the Section 301 of the Act havebeen entered in the register required to bemaintained under that section.

(b) In our opinion, having regard to our commentsin para 4 above, the transactions of purchaseof inventory and services and sale ofinventory/ fixed assets made in pursuance ofcontracts or arrangements entered in theregister maintained under Section 301 of theAct and aggregating during the year to Rs. 5lacs or more in respect of each party havebeen made at prices which are reasonablehaving regard to prevailing market prices forsuch inventory/ services or the prices at whichtransactions for similar inventory/ serviceshave been made with other parties.

6. No deposits within the meaning of Section 58Aand 58AA or any other relevant provisions of theAct and rules framed there under have beenaccepted by the company.

7. In our opinion, the Company has an adequateinternal audit system commensurate with the sizeof the Company and nature of its business.

8. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the rulesmade by the Central Government for themaintenance of cost records under Section209(1)(d) of the Act and are of the opinion that,prima facie, the prescribed records have beenmade and maintained. We are, however, notrequired to make a detailed examination of therecords with a view to determine whether they areaccurate or complete.

9. (a) The Company is regular in depositing withappropriate authorities the undisputedstatutory dues including Provident Fund,Investor Education and Protection Fund,Employee’s State Insurance, Income Tax,Sales Tax, Wealth Tax, Service Tax, CustomDuty, Excise Duty, Cess and other materialstatutory dues applicable to it. No undisputedamount payable in respect of the aforesaidstatutory dues were outstanding as at the

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TWENTY FOURTH

ANNUAL REPORT

2009-2010

last day of the financial year for a period ofmore than six months from the date theybecome payable.

(b) According to the records of the Company,there are no dues of Income Tax, Sales Tax,Service Tax, Custom Duty, Wealth Tax,Excise Duty, Cess which have not beendeposited on account of any dispute exceptthe following:

Particulars Forum where the Year Amountdispute is pending (in Rs.)

Custom Duty Custom, Excise and 2000,

Service Tax Appellate 2001,

Tribunal (CESTAT) 2004 &

2005 8,24,943

Excise Duty Custom, Excise and 2000

Service Tax Appellate 2002 &

Tribunal (CESTAT) 2006 13,90,28,284

Supreme Court

of India 2002 2,00,827

Income Tax Commissioner of A. Y.

Income Tax (Appeals) 2005-06 27,75,820

Income Tax Appellate A. Y.

Tribunal 1997-98

2003-04

2004-05 30,34,169

Sales Tax Deputy Commissioner 2002 to

(Appeal) 2003 63,89,639

Sales Tax Tribunal 1998 to

2000 10,48,056

Joint Commissioner of 2004 to

Sales Tax (Appeal) 2005 3,82,20,374

10. The Company has accumulated losses as at 31stMarch 2010 which are not more than 50% of itsnet worth and it has not incurred cash losses inthe financial year ended on that date but hasincurred cash losses in the immediately precedingfinancial year.

11. Considering the acceptance of Company’sproposal for restructuring by the lenders, theCompany has not defaulted in repayment of duesto banks and financial institutions.

12. During the year, the Company has not granted

any loans and advances on the basis of securityby way of pledge of shares and other securities.

13. The Company is not a dealer or trader in shares,securities, debentures and other investments.

14. In our opinion, the Company is not a chit fund ora nidhi/mutual benefit fund/society. Therefore, theprovisions of clause 4(xiii) of the Order are notapplicable to the Company.

15. During the year, the Company has not given anyguarantee for loans taken by others from bank orfinancial institutions.

16. According to the information and explanationsgiven to us, in our opinion, the term loans wereapplied for the purpose for which they wereobtained.

17. According to the information and explanationsgiven to us and on an overall examination of thecash flow statements and balance sheet of theCompany, in our opinion, the funds raised on short-term basis have, prima facie, not been used forlong-term investment.

18. During the year or in the recent past, the Companyhas not made any preferential allotment of sharesto parties and companies covered and recordedin the Register maintained under section 301 ofthe Act.

19. During the year or in the recent past, the Companyhas not raised any money by way of issue ofdebentures.

20. The Company has not raised any money by way ofpublic issue during the year or in the recent past.

21. During the course of our examination of the booksand records of the Company, carried out inaccordance with the generally accepted auditingpractice in India and according to the informationand explanations given to us, we have neithercome across any instance of fraud on or by theCompany, noticed or reported during the year, norhave we been informed of such cases by themanagement.

For LODHA & COMPANYChartered Accountants

(A. M. HARIHARAN)Partner

(M. No. 38323Firm No. 301051E)

MumbaiDated : 29th May, 2010

Page 16: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

16

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

BALANCE SHEET

As at 31st March, 2010

As at As atSchedule 31st March, 2010 31st March, 2009

Rupees Rupees Rupees

SOURCES OF FUNDS :

SHAREHOLDERS’ FUNDSShare Capital 1 8,74,01,835 8,74,01,835Reserves and Surplus 2 44,64,24,120 44,93,51,667

53,38,25,955 53,67,53,502

LOAN FUNDS

Secured Loans 3 1,00,69,65,799 1,00,25,91,854

Unsecured Loans (Promoter’s Contribution) 3,00,000 _

NET DEFERRED TAX LIABILITIES 18,17,80,018 18,17,80,018

TOTAL 1,72,28,71,772 1,72,11,25,374

APPLICATION OF FUNDS :FIXED ASSETS 4

Gross Block 2,20,81,65,013 2,20,40,07,766Less : Depreciation 1,12,52,41,958 1,02,33,33,705

Net Block 1,08,29,23,055 1,18,06,74,061Capital Work-in-Progress 39,72,289 32,62,959

1,08,68,95,344 1,18,39,37,020

ASSETS HELD FOR DISPOSAL 29,00,000 29,00,000

INVESTMENTS 5 3,18,26,600 3,18,26,600CURRENT ASSETS, LOANS AND ADVANCES

Inventories 6 54,88,26,069 52,36,34,435Sundry Debtors 7 5,17,35,174 6,50,93,993Cash and Bank Balances 8 1,17,60,546 40,41,850Other Current Assets 9 9,85,02,142 8,38,52,957Loans and advances 10 7,41,95,587 7,14,56,959

78,50,19,518 74,80,80,194

Less:CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities 11 18,55,46,958 26,80,41,317Provisions 12 52,31,679 48,72,891

19,07,78,637 27,29,14,208

NET CURRENT ASSETS 59,42,40,881 47,51,65,986PROFIT AND LOSS ACCOUNT (LOSS) 70,08,947 2,72,95,768

TOTAL 1,72,28,71,772 1,72,11,25,374

SIGNIFICANT ACCOUNTING POLICIES AND 18NOTES TO ACCOUNTS

Schedules referred to above form an integralpart of the Financial Statements

As per our attached report of even date

For LODHA & COMPANY

Chartered Accountants

(A. M. HARIHARAN)Partner

(M. No. 38323Firm No. 301051E)

Mumbai, 29th May, 2010 Mumbai, 29th May, 2010

K. K. PATODIA

RAJIV PATODIA

H. P. SIOTIA

DHARAM PAUL

V. K. GUPTA

G. J. MIRCHANDANI

P. P. DUNDH

D. K. PATEL

A. R. GARDE

M. L. BAGARIA

Chairman and Managing Director (CEO)Executive Director

DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

G. S. RAMAKRISHNAN

Company Secretary

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17

TWENTY FOURTH

ANNUAL REPORT

2009-2010

For the Year ended For the Year ended

Schedule 31st March, 2010 31st March, 2009

Rupees Rupees

INCOMESales 1,75,10,63,810 1,24,47,35,068Less: Excise Duty 1,69,712 6,86,547

1,75,08,94,098 1,24,40,48,521Other Income 13 9,97,09,492 5,11,05,312Increase / (Decrease) in Stocks 14 (9,82,34,900) 6,30,47,416

1,75,23,68,690 1,35,82,01,249EXPENDITURE

Cost of Materials 15 1,04,63,80,393 78,04,77,326Manufacturing, Administrative, Sellingand Other Expenses 16 51,04,99,903 51,09,06,297Interest and Finance Charges 17 10,38,14,000 11,11,49,513Depreciation 10,24,96,262 9,91,90,933Amount withdrawn from Revaluation Reserve (29,27,547) (29,60,206)

1,76,02,63,011 1,49,87,63,863

PROFIT/(LOSS) FOR THE YEAR (78,94,321) (14,05,62,614)

Exceptional Items 2,81,81,142 _

(Electricity Duty Liability relating to earlier yearswritten back on receiving favourable High Court order)

PROFIT/(LOSS) BEFORE TAX(after Exceptional Items) 2,02,86,821 (14,05,62,614)

Provision for Taxation :Current Tax _ _

Fringe Benefit Tax _ 9,79,000Deferred Tax Liabilities / (Assets) _ _

PROFIT/(LOSS) FOR THE YEAR AFTER TAX 2,02,86,821 (14,15,41,614)

Surplus / (Deficit) brought forward from previous year (2,72,95,768) 9,29,50,846

General Reserve Transferred to Profit & Loss Account _ 2,12,95,000

PROFIT / (LOSS) AVAILABLE FOR APPROPRIATION (70,08,947) (2,72,95,768)

APPROPRIATIONS :

Balance of (Loss) / Profit carried to Balance Sheet (70,08,947) (2,72,95,768)

(70,08,947) (2,72,95,768)Earnings per share (of the face value of Rs.10 per equity share):Basic / Diluted before Exceptional Items (0.90) (16.06)Basic / Diluted after Exceptional Items 2.32 (16.18)

SIGNIFICANT ACCOUNTING POLICIES AND 18NOTES TO ACCOUNTS

Schedules referred to above form an integralpart of the Financial Statements

PROFIT AND LOSS ACCOUNT

For the year ended 31st March, 2010

As per our attached report of even date

For LODHA & COMPANY

Chartered Accountants

(A. M. HARIHARAN)Partner

(M. No. 38323Firm No. 301051E)

Mumbai, 29th May, 2010 Mumbai, 29th May, 2010

K. K. PATODIA

RAJIV PATODIA

H. P. SIOTIA

DHARAM PAUL

V. K. GUPTA

G. J. MIRCHANDANI

P. P. DUNDH

D. K. PATEL

A. R. GARDE

M. L. BAGARIA

Chairman and Managing Director (CEO)Executive Director

DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

G. S. RAMAKRISHNAN

Company Secretary

Page 18: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

18

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

Note:1. Cash and Cash equivalents include:Cash in hand 0.61 3.47Balance with Scheduled Banks in Current Account 111.36 31.15

111.97 34.62

2. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in AccountingStandard- 3 on “Cash Flow Statements” issued by the Institute of Chartered Accountants of India.

3. Previous Year’s figures have been regrouped/rearranged wherever necessary.

(Rs. in Lacs)

2009-2010 2008-2009

A. CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit / (Loss) before Tax 202.87 (1,405.63)

Adjustments for:

- Depreciation 995.69 962.31

- Interest & Finance Charges paid 1,038.14 1,111.50

- (Profit)/Loss on Sale of Fixed Assets 2.43 (28.36)- Dividend earned (0.27) (0.21)

- Provision for wealth-tax 1.72 2.02

Operating Profit before working capital changes 2,240.58 641.63Adjustments for:

- Decrease/(Increase) in Trade and other receivables (28.32) 78.62- Decrease/(Increase) in Inventories (251.92) (86.35)

- Increase/(Decrease) in Trade payables (820.08) 1,123.70

Cash generated from operations 1,140.26 1,757.60Direct Taxes paid (11.80) (22.38)

NET CASH FROM OPERATING ACTIVITIES 1,128.46 1,735.22

B. CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed Assets (58.16) (560.84)

Sale of Fixed Assets 1.18 72.57

Dividend received 0.27 0.21

NET CASH USED IN INVESTING ACTIVITIES (56.71) (488.06)

C. CASH FLOW FROM FINANCING ACTIVITIES :

- Allotment Money / Securities premium received _ _

- Proceeds from long term borrowings (Net) 43.74 (216.98)

- Interest and Finance Charges (1,038.14) (1,111.50)

NET CASH FROM FINANCING ACTIVITIES (994.40) (1,328.48)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 77.35 (81.32)

Cash and cash equivalents (Opening) 34.62 115.94

Cash and cash equivalents (Closing) 111.97 34.62

CASH FLOW STATEMENT

For the year ended 31st March, 2010

As per our attached report of even date

For LODHA & COMPANY

Chartered Accountants

(A. M. HARIHARAN)Partner

(M. No. 38323Firm No. 301051E)

Mumbai, 29th May, 2010

G. S. RAMAKRISHNAN

Company Secretary

Mumbai, 29th May, 2010

K. K. PATODIA

RAJIV PATODIA

H. P. SIOTIA

DHARAM PAUL

V. K. GUPTA

G. J. MIRCHANDANI

P. P. DUNDH

D. K. PATEL

A. R. GARDE

M. L. BAGARIA

Chairman and Managing Director (CEO)Executive Director

DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

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19

TWENTY FOURTH

ANNUAL REPORT

2009-2010

As at As at

31st March, 2010 31st March, 2009

Rupees Rupees Rupees

SCHEDULE - 1

SHARE CAPITAL

Authorised :a) 1,00,00,000 Equity Shares of Rs. 10 each 10,00,00,000 10,00,00,000

b) 3,00,00,000 Preference Shares of Rs. 10 each 30,00,00,000 30,00,00,000

40,00,00,000 40,00,00,000

Issued, Subscribed and Paid-up :

a) 87,49,865 Equity Shares of Rs. 10 each 8,74,98,650 8,74,98,650

Less : Allotment money receivable 96,815 96,815

(Other than from directors)8,74,01,835 8,74,01,835

SCHEDULE - 2

RESERVES AND SURPLUS

a) Revaluation Reserve

As per last Balance Sheet 1,73,34,992 2,13,17,182

Less : Adjustment on account of revalued assets sold _ 10,21,984

Transferred to Profit and Loss Account on

account of depreciation on revalued amount 29,27,547 29,60,206

29,27,547 39,82,190

1,44,07,445 1,73,34,992b) Capital Reserve

(Special Capital Incentive)As per last Balance Sheet 40,00,000 40,00,000

c) Capital Redemption ReserveAs per last Balance Sheet 32,75,10,000 32,75,10,000

d) Securities Premium AccountAs per last Balance Sheet 10,05,06,675 10,05,06,675Add: Received during the year _ _

10,05,06,675 10,05,06,675

e) General ReserveAs per last Balance Sheet _ 2,12,95,000Less: Transferred to Profit and Loss Account _ 2,12,95,000

_ _

44,64,24,120 44,93,51,667

SCHEDULESForming Part of the Balance Sheet as at 31st March, 2010

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20

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

SCHEDULESForming Part of the Balance Sheet as at 31st March, 2010

SCHEDULE - 3

SECURED LOANS

a) Term Loan from Financial Institutions 5,27,93,036 5,27,93,036b) Term Loan from Banks 50,96,12,313 53,53,26,940c) Vehicle Loan from Banks 3,18,185 4,16,146d) Working Capital Facilities from Banks 44,42,42,265 41,40,55,732

1,00,69,65,799 1,00,25,91,854

Notes: Loans in (a) and (b) above are secured by way of first mortgage on all immovable properties of the Company, both presentand future and a first charge by way of hypothecation of all movable properties of the Company (save and except book debts), bothpresent and future, ranking pari passu interse, subject to prior charges created in respect of borrowings from banks as referred for(c) and (d) below.

Loans in (c) above are secured by way of hypothecation of Vehicles purchased thereagainst.Facilities in (d) above and non-fund limits of Rs.Nil (Previous year Rs.71.25 Lacs.) are secured by way of hypothication of, bothpresent and future, inventories and book debts and by way of second charge created on Company’s immovable and othermovable assets.

As at As at

31st March, 2010 31st March, 2009

Rupees Rupees

SCHEDULE - 4

FIXED ASSETS (Amount in Rs.)

As at Add./Adj. Ded./Adj. As at1-4-2009 during during 31-03-2010

the year the year

2 3 4 5

Rs. Rs. Rs. Rs.

4,23,14,107 _ _ 4,23,14,107

1,83,91,212 _ _ 1,83,91,212

39,68,31,507 73,177 _ 39,69,04,684

1,57,65,72,717 37,78,261 90,681 1,58,02,60,297

11,57,11,941 80,641 2,79,896 11,55,12,686

1,55,21,419 3,90,819 _ 1,59,12,238

2,84,31,069 2,31,114 15,263 2,86,46,920

1,02,33,794 5,53,030 5,63,955 1,02,22,869

2,20,40,07,766 51,07,042 9,49,795 2,20,81,65,013

2,16,69,83,192 6,23,28,499 2,53,03,925 2,20,40,07,766

GROSS BLOCK (At Book Value)

Upto During Ded./Adj. Upto01-04-2009 the year during 31-03-2010

the year

6 7 8 9

Rs. Rs. Rs. Rs._ _ _ _

13,36,544 1,90,674 _ 15,27,218

12,69,25,683 1,06,05,366 _ 13,75,31,049

79,68,04,349 8,34,91,988 56,694 88,02,39,643

6,03,36,275 54,03,692 1,92,805 6,55,47,162

1,17,92,121 7,69,493 _ 1,25,61,614

1,96,00,072 14,22,984 15,263 2,10,07,793

65,38,661 6,12,065 3,23,247 68,27,479

1,02,33,33,705 10,24,96,262 5,88,009 1,12,52,41,958

94,40,03,671 9,91,90,933 1,98,60,899 1,02,33,33,705

DEPRECIATION

1

PARTICULARS

Land : Freehold

Land : Leasehold

Buildings

Plant & MachineryElectrical Installations

Office Equipment

Furniture & Fittings

Vehicles

Total

Previous Year

Capital Work-in-Progress includes:

i) Advances for Plant & Machinery (Unsecured, considered good) 39,72,289 32,62,959(Include Rs.23,52,964; Previous Year Rs.31,17,238) being advances forCapital Expenditure

a) Leasehold Land and Buildings include Rs.6,77,766; Previous Year Rs.6,77,766 and Rs.11,08,380; Previous Year

Rs.11,08,380, respectively being cost of premises in a Co-operative Society held in the name of Managing Director on

behalf of the Company.

b) Buildings include Rs.500; Previous Year Rs.500 being the value of ten Shares in a Co-operative Society.

As at As at31-03-2010 31-03-2009

10 11

Rs. Rs.

4,23,14,107 4,23,14,107

1,68,63,994 1,70,54,668

25,93,73,635 26,99,05,824

70,00,20,654 77,97,68,368

4,99,65,524 5,53,75,666

33,50,624 37,29,298

76,39,127 88,30,997

33,95,390 36,95,133

1,08,29,23,055 1,18,06,74,061

1,18,06,74,061

NET BLOCK

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21

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULE - 5

INVESTMENTSLONG TERM :QUOTED

a) Trade:15,82,347 Equity Shares of Rs.10 each fully paid up inPBM Polytex Ltd. 3,09,55,600 3,09,55,600

b) Non-Trade:10,720 Equity Shares of Rs.10 each fully paid up inIDBI Limited. 8,71,000 8,71,000

3,18,26,600 3,18,26,600Notes: Aggregate Market value of quoted investments

Rs.4,31,64,996 (Previous Year Rs.1,07,71,944)

SCHEDULE - 6

INVENTORIES(As taken, valued and certified by the management)

a) Stores, Spares and Fuel 2,61,27,533 2,76,02,317(Including Goods-in-transit Rs.10,19,069;Previous Year Rs.15,14,385)

b) Packing Materials 38,59,008 32,69,063

(Including Goods-in-transit Rs.88,749;

Previous Year Rs.12,46,731)

c) Raw Materials 37,06,92,074 24,63,80,701(Including Goods-in-transit Rs.98,89,421;Previous Year Rs.28,66,430)

d) Finished Goods 10,43,37,262 18,71,65,389

e) Stock-in-Process 3,91,75,870 5,29,56,028

f) Waste 46,34,322 62,60,937

54,88,26,069 52,36,34,435

SCHEDULE - 7

SUNDRY DEBTORS(Unsecured, Considered good):

a) Debts Outstanding for a period exceeding six months _ _

b) Others 5,17,35,174 6,50,93,993

5,17,35,174 6,50,93,993

SCHEDULE - 8

CASH AND BANK BALANCESa) Cash in hand 61,489 3,47,276b) Balances with Scheduled Banks in:

i) Current Account 1,11,35,938 31,14,654ii) Unpaid Dividend Account 5,63,119 5,79,920

1,17,60,546 40,41,850

SCHEDULESForming Part of the Balance Sheet as at 31st March, 2010

As at As at

31st March, 2010 31st March, 2009

Rupees Rupees

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22

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

SCHEDULE - 9

OTHER CURRENT ASSETSa) Export Incentive Receivable 3,49,41,209 80,89,730b) MVAT Refund / Set Off Refund Receivable 1,82,51,275 41,40,804c) Load Factor Incentives / Other Refund Receivable 2,32,98,051 2,61,38,328d) Interest Rebate Receivable 1,69,26,861 2,21,26,738e) Interest and Other Income Receivable 33,33,740 12,34,960f) Cenvat Credit Refundable / Receivable 17,51,006 2,21,22,397

9,85,02,142 8,38,52,957

SCHEDULE - 10

LOANS AND ADVANCESUnsecured and Considered gooda) Advances Recoverable in cash or in kind or for

value to be received 2,28,98,593 2,19,77,291b) Advance Tax / Tax Deducted at Source (Net of

provision for Taxation Rs.3,66,54,495; PreviousYear Rs.3,66,54,495) 2,51,55,257 2,41,69,636

c) Deposits 2,61,41,737 2,53,10,032

7,41,95,587 7,14,56,959

SCHEDULE - 11

CURRENT LIABILITIES

a) Sundry Creditors

i) Micro, Small and Medium Enterprises 11,82,471 10,72,789ii) Other than Micro, Small and Medium Enterprises 15,21,95,011 22,62,53,231

15,33,77,482 22,73,26,020

b) Deposits and Credit balance of customers 2,63,50,382 3,40,34,146

c) Investor Education and Protection Fund shall becredited by the following amounts namely:*

Unclaimed Dividend 5,63,119 5,79,920

d) Other Liabilities 50,73,731 59,27,784

e) Interest accrued but not due 1,82,244 1,73,447

18,55,46,958 26,80,41,317* There is no amount due and outstandingas at Balance Sheet date to be credited toInvestor Education and Protection Fund.

SCHEDULE - 12

PROVISIONS

a) For Wealth Tax 7,56,075 5,83,725

b) Provision for Leave Entitlement 44,75,604 42,89,166

52,31,679 48,72,891

SCHEDULESForming Part of the Balance Sheet as at 31st March, 2010

As at As at

31st March, 2010 31st March, 2009

Rupees Rupees Rupees

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23

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULE - 13

OTHER INCOME

a) Export Incentives 8,79,15,642 3,82,73,045

b) Dividend on Long Term Trade Investments 26,800 21,440

c) Profit on Sale of Fixed Assets _ 28,35,849

d) Miscellaneous Income 1,17,67,050 99,74,978

9,97,09,492 5,11,05,312

SCHEDULE - 14

INCREASE/(DECREASE) IN STOCKS

Stocks as at close :

a) Finished Goods 10,43,37,262 18,71,65,389

b) Stock-in-process 3,91,75,870 5,29,56,028

c) Waste 46,34,322 62,60,937

14,81,47,454 24,63,82,354

Less : Stocks as at commencement :

a) Finished Goods 18,71,65,389 13,93,70,191

b) Stock-in-process 5,29,56,028 3,81,71,596

c) Waste 62,60,937 57,93,151

24,63,82,354 18,33,34,938

(9,82,34,900) 6,30,47,416

SCHEDULE - 15

COST OF MATERIALS

a) Raw Materials Consumed

Opening Stock 24,63,80,701 28,87,49,463

Add: Purchases 89,42,61,926 67,17,46,292

1,14,06,42,627 96,04,95,755

Less : Sales 21,08,990 57,496

Closing stock 37,06,92,074 24,63,80,701

76,78,41,563 71,40,57,558

b) Purchase of Traded Goods 27,85,38,830 6,64,19,768

1,04,63,80,393 78,04,77,326

SCHEDULESForming Part of the Profit and Loss Account for the year ended 31st March, 2010

For the year ended For the year ended

31st March, 2010 31st March, 2009

Rupees Rupees Rupees

Page 24: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

24

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

SCHEDULES

Forming Part of the Profit and Loss Account for the year ended 31st March, 2010

SCHEDULE - 16

MANUFACTURING, ADMINISTRATIVE,

SELLING AND OTHER EXPENSES

Stores and Spares Consumed 2,74,79,504 4,36,60,036

Packing Materials Consumed 2,34,80,742 2,22,41,962

Power and Fuel 18,81,01,994 19,01,41,327

Payments to and Provisions for Employees:

a) Salary, Wages and Bonus 12,16,61,328 11,31,69,253

b) Contribution to Provident and other Funds 1,04,22,517 1,11,36,399

c) Welfare expenses 27,16,070 25,03,136

13,47,99,915 12,68,08,788

Freight and Forwarding 5,38,08,162 4,85,68,961

Rent 21,27,340 35,30,686

Repairs and Maintenance :

a) Plant and Machinery 23,44,324 33,30,424

b) Buildings 29,61,564 50,98,745

c) Others 11,03,200 5,61,570

64,09,088 89,90,739

Insurance 66,86,452 70,35,609

Rates and Taxes 17,15,863 21,51,853

Travelling and Conveyance 61,10,238 81,96,688

Brokerage and Commission on sales 3,09,63,738 2,11,73,110

Directors’ sitting Fees 2,45,000 2,85,000

Miscellaneous Expenses 2,85,71,867 2,81,21,538

51,04,99,903 51,09,06,297

SCHEDULE - 17

INTEREST AND FINANCE CHARGES

a) Interest:

On Fixed Loans 4,84,88,811 5,12,33,578

Others 4,91,73,427 4,48,25,745

9,76,62,238 9,60,59,323

Less: Interest Received (Tax Deducted atSource Rs.1,09,439; Previous year

Rs.2,46,192) 10,98,629 10,97,210

9,65,63,609 9,49,62,113

b) Finance Charges 72,50,391 1,61,87,400

10,38,14,000 11,11,49,513

For the year ended For the year ended

31st March, 2010 31st March, 2009

Rupees Rupees Rupees

Page 25: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

25

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULE - 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

(I) SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting:The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles(“GAAP”) under the historical cost convention (except for certain revalued fixed assets) on the accountingprinciples of a going concern and the Company follows mercantile system of accounting and recognizes incomeand expenditure on accrual basis except those with significant uncertainties. GAAP comprises mandatoryaccounting standards issued by the Institute of Chartered Accountants of India (“ICAI”), the provisions of theCompanies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accountingpolicies have been consistently applied except where a newly issued accounting standard is initially adopted ora revision to an existing accounting standard requires a change in accounting policy hitherto in use.

2. Revenue Recognition:Sale is recognised on the basis of date of dispatch / Bill of lading and as and when significant risks and rewardsof ownership are transferred to the customers.

Sales include excise duty and freight, wherever applicable. Claims and Rebates are excluded therefrom.

3. Use of estimates:The presentation of financial statements in conformity with generally accepted accounting principles(GAAP),requires the management to make estimates and assumptions that affect the reported amounts ofassets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actualresults may differ from these estimates. Any revision to accounting estimates is recognised prospectively.

4. Fixed Assets:a) Buildings, Plant and Machinery and Electrical Installations acquired up to 31st March, 1993 were revalued

on 1st April, 1993 and are stated at updated book value less depreciation. Other assets are stated at costless accumulated depreciation.

b) Expenditure during construction period is included under Capital Work-in-Progress and the same is allocatedto the respective Fixed Assets on the completion of its construction.

5. Depreciation / Amortisation and Impairment loss:

a) Depreciation (including on revalued assets) is provided on Straight Line Method at the rates and in themanner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on the amounts ‘capitalisedduring the year on account of foreign exchange fluctuation is provided prospectively over’ the residual life ofthe assets.

b) Leasehold premium is being amortised over the remaining period of lease after the commencement ofproduction.

c) The Company assesses at each Balance Sheet date whether there is any indication that any asset may beimpaired. If any such indication exists, the carrying value of such assets is reduced to its recoverableamount and the impairment loss is charged to Profit & Loss Account. If at the Balance Sheet date there isany indication that a previously assessed impairment loss no longer exists, then such loss is reversed and theasset is restated to that effect.

6. Investments:Long-Term Investments are carried at cost and provision is made to recognize any decline, other than temporary,in the value of such Investments.

7. Valuation of Inventories:a) Inventories are valued at the lower of the cost and net realisable value.

b) Cost of raw materials is determined on specific identification basis.

c) Cost of stores, spares, packing materials and fuel is determined on weighted average basis.

d) Finished goods and work-in-progress include conversion and other costs incurred in bringing the inventoriesto their present location and condition.

SCHEDULES

Forming Part of the Accounts for the year ended 31st March, 2010

Page 26: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

26

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

SCHEDULE - 18 (contd.)

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

8. Employee Benefits:

Employee Benefits in the form of Provident Fund is a defined contribution scheme and the contributions arecharged to the Profit and Loss Account of the year when the contributions to the respective funds are due.There are no other obligations other than the contribution payable to the respective trusts.

Gratuity liability under the Payment of Gratuity Act, 1972 is a defined benefit obligation and is provided foron the basis of the actuarial valuation made at the end of each financial year.

Short term compensated absences are provided for based on estimates. Long term compensated absencesare provided for based on actuarial valuation.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

9. Transaction of Foreign Currency Items:

Transaction in Foreign Currency is recorded at the rate of exchange in force at the date of transaction.Foreign Currency assets and liabilities are stated at the rate of exchange prevailing at the year end andresultant gains / losses are recognised in the Profit and Loss Account. Premium / Discount in respect offorward foreign exchange contracts is recognised over the life of the contracts.

10. Government Grants:

Capital grants relating to specific assets are reduced from the gross value of the Fixed Assets and Capitalgrants for Project Capital Subsidy are credited to Capital Reserve. Other revenue grants are credited to Profit& Loss account or deducted from the related expenses.

11. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to theacquisition/construction of qualifying fixed assets are capitalised up to the date when such assets are readyfor its intended use and other borrowing costs are charged to Profit & Loss Account.

12. Taxation:

Provision for current tax is made on the basis of the estimated taxable income for the current accountingyear in accordance with the Income Tax Act, 1961.

The deferred tax for timing differences between the book and tax profits for the year is accounted for usingthe tax rates and laws that have been enacted or substantively enacted as of the balance sheet date.Deferred tax assets arising from timing differences are recognised to the extent there is reasonable/virtualcertainty that these would be realised in future and are reviewed for the appropriateness of their respectivecarrying values at each balance sheet date.

The provision for Fringe Benefit Tax has been made in respect of employee benefits and other specifiedexpenses as determined under the Income Tax Act, 1961.

13. Provisions, Contingent Liabilities and Contingent Assets:

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodyingeconomic benefits will be required to settle an obligation.

Contingent Liabilities in respect of show cause notices received are considered only when they are convertedinto demands. Contingent Liabilities under various fiscal laws include those in respect of which the Company/Department is in appeal. Contingent liabilities are disclosed by way of notes to accounts.

Contingent assets are not recognised or disclosed in the financial statement.

SCHEDULES

Forming Part of the Accounts for the year ended 31st March, 2010

Page 27: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

27

TWENTY FOURTH

ANNUAL REPORT

2009-2010

(II) NOTES TO ACCOUNTS

1. Contingent liabilities :

Contingent liabilities not provided for in respect of :

a) Amount outstanding in respect of Bills discounted under ExportLetter of Credit (Since realised Rs.1037.25 lacs; Previous YearRs.1004.96 lacs)

b) Disputed Statutory claims / levies, including, those pending in courtand other claims not acknowledged as debts (excluding interestwhere not ascertained /demanded) in respect of:

(Amount in Rs. Lacs)

Sr. Par t i cu la r s Current PreviousNo. Year Year

a Sales Tax 461.13 467.85

b Income tax 284.54 284.54

c Excise Duty 1411.79 1409.78

d Custom Duty 9.25 9.25

e Electricity Duty on Captive Power Generation 812.30 530.49

f Additional Supply Charges _ 69.99(ASC for electricity charges)

2. The Company’s case in the matter of Electricity Charges wrongly claimedby Maharashtra State Electricity Distribution Company Ltd.( MSEDCL)from November, 1998 to June, 2008 has been decided favourably byMaharastra Electricity Regulatory Commission (MERC) and AppellateTribunal, New Delhi. MSEDCL has filed an appeal before the SupremeCourt. The Management foresees only a remote possibility of an outflowof / adjustments to the resources embodying resources embodyingeconomic benefits, in view of the expert legal opinion in the matterobtained by the Company.

3. Estimated amount of contracts remaining to be executed on CapitalAccount and not provided for (Net of advances of Rs.23,52,964;Previous Year Rs.31,96,085).

4. Deferred Tax Liability / (Assets) at the year end comprises of timingdifferences on account of :

Depreciation

Expenditure / Provisions allowable

Net Deferred Tax Liability

5. a) In the opinion of management, the Current assets, Loans andAdvances have a value on realization in the ordinary course ofbusiness at least equal to the amount at which they are statedin the Balance sheet. The provision for depreciation and otherknown liabilities is adequate and not in excess of what isrequired.

b) The account of certain debtors, loans and advances given / received,creditors and bank accounts are however subject to confirm andreconciliation, if any. The management, however is confident thatthe impact thereof on the current year’s financial statements willnot be material.

SCHEDULE - 18 (contd.)

25,26,10,434 12,96,60,789

SCHEDULES

Forming Part of the Accounts for the year ended 31st March, 2010As at

31st March, 2010

Rupees

As at

31st March, 2009

Rupees

20,33,09,748

(2,15,29,730)

18,17,80,018

21,41,57,650

(3,23,77,632)

18,17,80,018

2,11,76,676 2,82,44,573

Page 28: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

28

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

SCHEDULESForming Part of the Accounts for the year ended 31st March, 2010

SCHEDULE - 18 (contd.)

6. Buildings, Plant & Machinery and Electrical Installations were revaluedas on 1st April, 1993 on the basis of reports of approved valuer onmarket value / replacement cost basis using standard indices afterconsidering the obsolescence and age of individual assets. The revaluedamounts (Net of withdrawals) remaining substituted for the historicalcost in the gross block of fixed assets at the close of the year are :

Buildings

Plant & Machinery

Electrical Installations

7. Loans & Advances include amount receivable from employees againstinterest free loan given to them in the ordinary course of business and asper rules of the Company. No repayment schedule or repayment isbeyond seven years.

(Maximum amount due at any time during the year)

Number of Equity Shares of the Company held by such employees

8. Rates and Taxes (Schedule 16) include :

Provision for Wealth Tax

9. a) Foreign Exchange difference (net) credited / (debited) to Profit andLoss Account(Included in Sales Rs.405.50 lacs; Previous Year : Excluded fromSales Rs.537.09 lacs in respect of Packing Credit Facilities / Exportbill discounting)

b) Foreign Exchange dif ference (net) in respect of ForeignExchange contracts to be Credited / (Debited) to subsequentyear’s Prof i t and Loss Account.

c) Derivative Instruments

i) Details of foreign currency balances hedged:

Current Year Previous Year

Particulars Foreign Foreign Indian Foreign IndianCurrency Currency Rupees Currency RupeesDenomi- Amount Equivalent Amount Equivalentnation in Lacs in Lacs in Lacs in Lacs

Assets(Trade Receivable) USD 6.22 280.41 6.75 343.46

EURO _ _ 0.39 26.31

ii) Details of foreign currency balances not hedged:Particulars Foreign Foreign Indian Foreign Indian

Currency Currency Rupees Currency RupeesDenomi- Amount Equivalent Amount Equivalentnation in Lacs in Lacs in Lacs in Lacs

Liabilities (PCFCWorking Capital Limit) USD _ _ 7.69 391.43

10. i) Auditors’ Remuneration:Audit Fees

Tax Audit Fees

Certification Fees

Reimbursement of out of pocket expenses (Including Service Tax)

1,50,000

30,000

1,13,000

92,533

3,85,533

1,50,000

30,000

1,14,000

85,226

3,79,226

7,63,85,599

11,71,41,050

1,29,99,743

7,63,85,599

11,71,41,050

1,29,99,743

7,99,336

12,27,303

408

6,16,850

8,91,350

202

1,72,350

4,47,93,743

2,01,600

(6,62,81,539)

33,32,913 21,75,012

As at

31st March, 2010

Rupees

As at

31st March, 2009

Rupees

Page 29: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

29

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULE - 18 (contd.)

ii) Cost Auditors’ Remuneration:Cost Audit FeesCertification FeesReimbursement of out of pocket expenses (including Service Tax)

11. Employee Benefits:

Defined Benefit Plans as per actuarial valuations as on 31.03.2010Details of Gratuity plan are as follows:

Description Rs. in Lacs Rs. in Lacs

1. Reconciliation of opening and closing balances of obligation

a. Obligation as at 01.04.09 265.40 236.45

b. Current Service Cost 17.70 28.54

c. Interest Cost 20.88 19.63

d. Actuarial (Gain) / Loss 26.53 (0.20)

e. Benefits Paid (8.69) (19.02)

f. Obligation as at 31.03.2010 321.82 265.40

2. Change in Plan Assets (Reconciliation of opening and closing balances)

a. Fair Value of plan assets as at 01.04.09 247.59 249.35

b. Actual Company Contributions _ _

c. Expected return on plan assets 19.46 19.19

d. Benefits Paid (8.69) (19.02)

e. Actuarial Gain / (Loss) 38.00 (3.14)

f. Fair Value of plan assets as at 31.03.2010 296.36 246.38

3. Reconciliation of fair value of assets and obligations

a. Present value of obligation as at 31.03.2010 321.82 265.40

b. Fair Value of plan assets as on 31.03.2010 (296.36) (246.38)

c. Net liability recognized in the Balance Sheet 25.46 19.02

4. Expense recognized in the period

a. Current service cost 17.70 28.54

b. Interest cost 20.88 19.63

c. Expected return on plan assets (19.46) (19.19)

d. Actuarial (Gain) / Loss (11.47) 2.94

e. Expense recognized till 31.03.2010 7.65 31.92

5. Investment Details

The full amount has been invested in cash accumulation schemeof Insurer Managed Funds

6. Assumptions 31/03/2010 31/03/2009

a. Discount rate (per annum) 8.00% 8.00%

b. Estimated rate of return on plan assets (per annum) 8.00% 8.00%

c. Rate of escalation in salary (per annum) 5.00% 5.00%

SCHEDULES

Forming Part of the Accounts for the year ended 31st March, 2010

90,00076,50026,257

1,92,757

90,00082,50022,029

1,94,529

Page 30: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

30

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

12.The amount of Research and Development expenses is not ascertainable separately, the same having been includedunder various heads of expenditure in the Profit and Loss Account.

13.Related Party disclosures pursuant to Accounting Standard ‘18’:

1. Name of the Parties:

(i) Key Management Personnel:Shri Krishan Kumar Patodia (Chairman and Managing Director)Shri Narayan Patodia (Managing Director)Shri Rajiv Patodia (Executive Director)

(ii) Other Related Parties (Associates), where transactions have taken place during the year:

PBM Polytex LimitedPatodia Syntex LimitedEurospin Industries Limited

(iii) Shri R. K. Siotia (Relative of a Director)

2. Transactions with Related Parties : (Rs. in Lacs)

SCHEDULE - 18 (contd.)

SCHEDULESForming Part of the Accounts for the year ended 31st March, 2010

Sr. No. NAME OF PARTIES 2009-10 2008-09

1 KEY MANAGERIAL PERSONNEL :

DIRECTORS REMUNERATIONShri Krishan Kumar Patodia 44.22 44.16Shri Narayan Patodia 28.86 22.21Shri Rajiv Patodia 21.49 20.67

2 OTHER RELATED PARTIES (ASSOCIATES) :

PURCHASE OF GOODS & MATERIAL

PBM Polytex Ltd. 1,188.04 540.79Patodia Syntex Ltd. 1.43 2.95

SALE OF GOODS AND MATERIAL

PBM Polytex Ltd. 1.42 12.60Patodia Syntex Ltd. 217.76 328.60

SALE OF FIXED ASSETS

PBM Polytex Ltd. _ 3.08

Shri R. K. Siotia _ 0.20

RENT PAID / (RECEIVED)PBM Polytex Ltd. (0.36) (0.57)Eurospin Industries Ltd. (0.60) (0.60)

PRESSING CHARGES PAIDPatodia Syntex Ltd. 26.99 25.87

JOB WORK CHARGES RECEIVEDPatodia Syntex Ltd. 3.02 0.92

REIMBURSEMENT OF EXPENSESEurospin Industries Ltd. 3.18 _

PROMOTER’S CONTRIBUTION RECEIVEDPatodia Syntex Ltd. 3.00 _

Page 31: EUROTEX INDUSTRIES AND EXPORTS LIMITED Narayan Patodia Managing Director Shri Rajiv Patodia Executive Director Shri Gurmukh J. Mirchandani Shri A. R. Garde Shri Dharam Paul Shri D

31

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULESForming Part of the Accounts for the year ended 31st March, 2010

Note : 1. Related party relationship is as identified by the Company and relied upon by the Auditors.

2. No amounts in respect of related parties have been written off / written back during the year, nor anyprovision has been made for doubtful debts/receivables.

14. In terms of Accounting Standard 17 , the Company operates primarily only in one business segment Viz. Cotton yarn

and has its production facilites and all other assets located in India. Sales comprises exports sales of Rs.12,639.38 lacs

(Previous year Rs.7,573.86 lacs) and Domestic sales of Rs.4,871.26 lacs (Previous year Rs.4,873.49 lacs).

15. Earnings per share (EPS) is calculated as under:

a) Basic / Diluted before Exceptional Items

Numerator:

Net Profit /(Loss) before Exceptional Items as disclosed in Profit & Loss account (78,94,321) (14,05,62,614)

Denominator:

Average No. of Equity Shares outstanding during the year 87,49,865 87,49,865

Earnings Per Share (EPS) (0.90) (16.06)

b) Basic / Diluted after Exceptional Items

Numerator:

Net Profit /(Loss) after Exceptional Items & taxation as disclosed in Profit & Loss account 2,02,86,821 (14,15,41,614)

Denominator:

Average No. of Equity Shares outstanding during the year 87,49,865 87,49,865

Earnings Per Share (EPS) 2.32 (16.18)

The nominal value per Equity Share is Rs.10

Sr. No. CLOSING BALANCE OF RELATED PARTIES 2009-10 2008-09

PAYABLE :

PBM Polytex Ltd. 237.96 148.77

Patodia Syntex Ltd. 2.18 2.41

Eurospin Industries Ltd. 0.13 _

Patodia Syntex Ltd. (Promoter’s Contribution) 3.00 _

RECEIVABLE :

Patodia Syntex Ltd. 0.19 37.06

INVESTMENT :

PBM Polytex Ltd. 309.56 309.56

SCHEDULE - 18 (contd.) (Rs. in Lacs)

As at

31st March, 2010

Rupees

As at

31st March, 2009

Rupees

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32

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

a) Capacities

i) Licensed Capacity (Since delicensed)ii) Installed Capacity

(As certified by the Management andrelied upon by the auditors being atechnical matter)SpindlesKnitting Machines

b) Yarn Production, Purchase and StockOpening StockProductionPurchaseClosing Stock

c) Fabric Production and StockOpening StockProductionClosing Stock

d) Raw Cotton Purchases (Trading Division)

e) Sales (Refer Note No.9(a) of Notes toAccounts (II) of Schedule 18 :YarnFabricRaw Cotton (Export)Cotton WasteOthers

61,63224

61,63224

f) Consumption of Raw Material(Indigenous)

CottonCotton YarnCotton (Imported)Yarn (Imported)

g) Stores, Spares and Packing MaterialConsumed:ImportedIndigenous

h) Value of Imports Calculated on CIF basis :Raw MaterialsComponents and spare partsCapital Goods

i) Earnings in Foreign Exchange :F.O.B. value of goods exported

j) Expenditure in Foreign Currency :CommissionOthers

8,88,12273,19,30719,07,0795,25,230

7,0952,20,152

1,011

24,599

95,89,2782,26,23624,599

32,76,273_

1,31,16,386

18,57,51,951_

27,65,32,59210,41,15,522

14,13,438_

2,21,740

20,06,238

1,57,32,59,8433,90,35,40121,69,399

13,41,98,79824,00,369

1,75,10,63,810

7,83,57962,81,1735,44,0758,88,122

38,9071,53,767

7,095

_

67,20,7051,85,579

_

28,42,887_

97.49,171

13,43,93,821_

6,64,19,76818,57,51,951

49,76,370_

14,13,438

_

1,08,07,46,4913,37,13,016

_

12,68,34,03434,41,527

1,24,47,35,068

78,45,3491,44,872

14,28,926171

94,19,318

30.4869.52

100.00

74.214.82

20.940.03

100.00

52,98,98,6553,43,96,770

14,95,33,2212,28,912

71,40,57,558

2,00,87,4614,58,14,537

6,59,01,998

98,05,66567,728

10,21,24217

1,08,94,652

65,11,77,2011,44,74,559

10,21,73,17116,632

76,78,41,563

75,53,0924,34,07,154

5,09,60,246

84.811.89

13.300.00

100.00

15,17,35,28759,31,21713,97,712

15,90,64,216

1,23,57,10,307

2,87,01,30741,51,537

3,28,52,844

11,41,83,6981,54,70,4893,97,76,902

16,94,31,089

78,54,91,324

1,69,16,27332,13,844

2,01,30,117

14.8285.18

100.00

Kgs.Kgs. Rupees Rupees

Kgs.

As at

31st March, 2009

Rupees

As at

31st March, 2010

Kgs. RupeesPercentage Percentage

SCHEDULE - 18 (contd.)

16.Additional Information pursuant to Part II of Schedule VI to the Companies Act,1956:As at

31st March, 2009

Nos.

SCHEDULESForming Part of the Accounts for the year ended 31st March, 2010

As at

31st March, 2010

Nos.

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33

TWENTY FOURTH

ANNUAL REPORT

2009-2010

SCHEDULESForming Part of the Accounts for the year ended 31st March, 2010

SCHEDULE - 18 (contd.)

18. Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

(Amount in Rs.)

Sr.No. Par t i cu la r s 2009-10 2008-09

a) Principal amount remaining unpaid 11,82,471 10,72,789

b) Interest paid in terms of Section 16 _ _

c) Interest due and payable for the period of delay in payment _ _

d) Interest accrued and remaining unpaid _ _

e) Interest due and payable even in succeeding years _ _

The Company has compiled the above information based on verbal confirmations from suppliers. As at the year end, nosupplier has intimated the Company about its status as a Micro or Small Enterprise or its registration under the Micro, Smalland Medium Enterprises Developement Act, 2006.

19. Previous years’ figures have been regrouped / rearranged wherever necessary to conform with current year’s presentation.

17. a) As no commission is being paid to directors, computation

of profit u/s 349 read with section 350 is not given.

b) Managerial remuneration paid/provided;

(excluding gratuity and leave encashment since the same

have been determined as a whole)- Salary

* - Perquisites- Contribution to Provident and other Funds

* Evaluated as per Income Tax Rules, 1962, whereapplicable.

** Within the limits prescribed under the provisions of ScheduleXIII to the Companies Act, 1956.

As at

31st March, 2010

As at

31st March, 2009

RupeesRupees

45,00,00030,79,095

11,25,000

87,04,095

45,00,000

38,31,683

11,25,000

** 94,56,683

Mumbai, 29th May, 2010

G. S. RAMAKRISHNAN

Company Secretary

Signatures to Schedules ‘1’ to ‘18’

Mumbai, 29th May, 2010

K. K. PATODIA

RAJIV PATODIA

H. P. SIOTIA

DHARAM PAUL

V. K. GUPTA

G. J. MIRCHANDANI

P. P. DUNDH

D. K. PATEL

A. R. GARDE

M. L. BAGARIA

Chairman and Managing Director (CEO)Executive Director

DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

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34

EUROTEX

INDUSTRIES AND EXPORTS

LIMITED

Additional information pursuant to part IV of Schedule VI to the Companies Act, 1956.

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details :

a. Registration No. : 42598 b. State code : 11

c. Balance Sheet Date : 31st March, 2010

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

a. Public Issue : NIL b. Rights Issue : NIL

c. Bonus Issue : NIL d. Private Placement : NIL

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

a. Total Liabilities : 17,22,872 b. Total Assets : 17,22,872

c. Sources of funds :

- Paid Up Capital : 87,402 - Reserves & Surplus : 4,46,424

- Secured Loans : 10,06,966- Net of Deferred Tax

- Unsecured Loans : 300 Liabilities : 1,81,780

d. Application of funds :

- Net Fixed Assets : 10,89,795 - Investments : 31,827

- Net Current Assets : 5,94,241 - Misc. Expenditure : NIL

- Accumulated Losses : 7,009

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

a. Turnover (Sales) : 17,51,064 b. Total Expenditure : 17,60,263

c. Profit before tax : 20,287 d. Profit after tax : 20,287

e. Earning per share in Rs. : 2.32 f. Dividend rate : 0 %

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

Sr. No. Product Description ITC Code Number

a. Cotton Yarn 52-05

b. Fabric 60-02

Mumbai, 29th May, 2010

G. S. RAMAKRISHNAN

Company Secretary

Signatures to Schedules ‘1’ to ‘18’

Mumbai, 29th May, 2010

K. K. PATODIA

RAJIV PATODIA

H. P. SIOTIA

DHARAM PAUL

V. K. GUPTA

G. J. MIRCHANDANI

P. P. DUNDH

D. K. PATEL

A. R. GARDE

M. L. BAGARIA

Chairman and Managing Director (CEO)Executive Director

DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector