KAJAL SYNTHETICS AND SILK MILLS LIMITED ANNUAL REPORT 2004-2005 DIRECTOR'S REPORT TO THE SHARE HOLDERS Dear Shareholders, Yours Directors have pleasure in presenting to you the Seventeenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2005. FINANCIAL RESULTS: 2004-05 2003-04 Particulars Rs. Rs. Profit before Tax 11,01,285 25,38,087 Less : Provision for Taxes Current Tax 6,104 2,41,200 Profit after tax 10,95,181 22,96.887 Add / (Less) : Income Tax Adjustment NIL NIL Add : Profit brought forward from earlier years 33,43,430 20,80,142 Profit after Tax available for appropriation 44,38,611 43,77,029 Appropriations: Transfer to General Reserve 2,73,795 5,74,222 Transfer to Special Reserve under RBI Act, 1934 2,19,036 4,59,377 Balance carried to Balance Sheet 39,45,779 33,43,430 DIVIDEND: With a view to conserve the resources of the Company, your Directors do not recommend any dividend for the year under review. DIRECTORS: Shri Naveen Bhatter, Director retires by rotation from the Board and being eligible offers himself for reappointment. DIRECTOR RESPONSIBILITY STATEMENT: Your Directors confirm that: i. in the preparation of the Annual Accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures. if any; ii. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year ended on 31st March, 2005 and of the profit of the Company for that year; iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. the Directors have prepared the annual accounts on a going concern basis. PUBLIC DEPOSITS: The Company has not accepted any deposits from the public during the year under review. EMPLOYEES: The Company had no employees of the category specified in Section 217(2A) of the Companies Act, 1956. SUBSIDIARY COMPANIES: As required under Section 212 of the Companies Act, 1956, the audited statement of accounts along with the report of the Board of Directors and Auditors' Report of your Company's subsidiaries namely. i) Ghewar Investments & Trading Company Private Limited. ii) Kanishtha Finance And Investment Private Limited, iii) Naman Finance & Investment Private Limited, and iv) Rutgers Investment And Trading Company Private Limited are annexed to this report. AUDITORS: M/s S S Rathi & Co., Chartered Accountants, the Statutory Auditors of the Company retire and being eligible offer themselves for re-appointment. AUDITORS REPORT: The observations made in the Auditors Report are self explanatory and therefore, do not call for any further comments on the Auditors Report under Section 217 of the Companies Act, 1956. COMPLIANCE CERTIFICATE: Pursuant to the proviso to Section 383A (1) of the Companies Act, 1956 read with the Companies (Compliance Certificates) Rules, 2001 framed thereunder, your Company has obtained a Compliance Certificate from Girish Murarka and Company, Company Secretaries, Mumbai for the financial year ended 31st March, 2005 confirming that the Company has complied with all the provisions of the Companies Act, 1956. A copy of such certificate is attached with this Report and forms an integral part. The observations made in the Compliance Certificate are self explanatory and therefore do not call for any comments. REPORT ABOUT CONSERVATION OF ENERGY: Since the Company is not having any manufacturing activity, Directors have nothing to report on conservation of energy, research and development and technology absorption. FOREIGN EXCHANGE EARNINGS AND OUTGO: Foreign Exchange earned during the year under review - Rs. Nil Foreign Exchange spent during the year under review - Rs. Nil APPRECIATION: Your Directors place on record their deep appreciation of the assistance and contribution received from their bankers, employees, etc. For and on behalf of Board of Directors Place : Mumbai Date : 27/08/05 Director Director