Directors' Report

To The Members,

Your Directors have pleasure in presenting the 33rd Annual Report of your Company together with the Audited Statements of Accounts for the financial year ended March 31, 2015.

OVERVIEW OF ECONOMY

The Asian Development Bank (ADB) projected India's economy to grow by 7.8 per cent in 2015­16. This is lower than the official estimate of 8.1-8.5 per cent, but higher than China's estimated growth of 7.2 per cent in 2015.

At this rate, India's economy would contribute more to the world economic expansion than the US, although less than what China would chip in, ADB said in its World Development Outlook 2015, released on Tuesday. China is projected to contribute 1.15 per cent to the world economic growth, followed by India at 0.55 per cent. The US' contribution is pegged at 0.52 per cent.

According to ADB, India's economic growth in 2016-17 will be 8.2 per cent - something which the Economic Survey for 2015-2016 had said India would achieve in 2015-16. The higher growth in 2016-17 is expected to come on the back of easing monetary stance by the Reserve Bank of India (RBI) and a pick-up in capital expenditure.

ADB is in touch with the Central Statistics Office (CSO) to understand the new gross domestic product (GDP) series and wanted it to come out with back-dated data on the new series.

According to ADB, consumer price index (CPI)-based inflation will fall to an average of five per cent in 2015-16 against less than seven per cent expected in 2015-2016. However, it will rise to 5.5 per cent in 2016-17.

OVERALL PERFORMANCE & OUTLOOK

Gross Revenue for the year was stood at Rs. 959.78 Lac in comparison to last year figure of Rs. 1471.00 Lac. PBT Margin for the year stood at Rs. 26.15 Lac in comparison to last years' figure of Rs. 26.13 Lac where as Profit after Tax and Extra-Ordinary items stood at Rs. 10.02 Lac in comparison to last years' figure of Rs. 18.06 Lac. The difference of net profit in comparison to last year was mainly due to adjustment of depreciation.

The Company is into the business of trading in Textile products, investments in shares & securities and deploying the surplus funds in treasury operations.

In regard to textile business, outlook for financial year 2015-16 expected to be in line with current years' performance mainly due to steep competition and sluggish demand of consumers. On the other hand Stock market looks challenging mainly due to high volatility and lack of retail participation. Range bound market scenario makes a time difficult for the company.

DIVIDEND AND RESERVES

Due to inadequate profit and with a view to conserve resources to face future challenges, your Directors do not recommends any dividend for the year under review.

During the year under review, sum of Rs. 5.00 Lac were transferred to General Reserves.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs. 1328.4474 Lac. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2015, none of the Directors of the Company hold shares or convertible instruments of the Company.

FINANCE AND ACCOUNTS

Your Company prepares its financial statements in compliance with the requirements the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits/ (loss) and cash flows for the year ended 31st March 2015.

The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

There is no audit qualification in the standalone financial statements by the statutory auditors for the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments, if any, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

SUBSIDIARY COMPANY

The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20% of the consolidated income of the Company during the previous financial year. Accordingly, a policy on material subsidiaries has not been formulated.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013 thus disclosure in form AOC-2 is not required. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

MANAGEMENT DISCUSSION & ANALYSIS

As required by Clause 49 of Listing Agreement, the Management Discussion and Analysis is annexed and forms part of the Directors' Report.

LISTING OF SECURITIES MCX STOCK EXCHANGE LTD. (MCX-SX)

During the year, the Company has listed its securities on Multi Commodity Exchange Ltd. (MCX-SX) and has got listing approval vide Exchange Circular dated 2nd April 2014. This is in addition to its listing on BSE Ltd. (BSE) and Calcutta Stock Exchange Association Ltd. (CSE).

DELISTING OF SECURITIES FROM U. P. STOCK EXCHANGE LTD. (UPSE)

During the year, the Company has opted to de-list its securities from U. P. Stock Exchange Ltd. due to lack turnover and volatility on its exchange, absence of liquidity in the scrip as well as almost Nil volume during the year under review. However, Equity Shares of Company will continue to list on remaining Exchange i.e. on BSE Ltd. (BSE), Calcutta Stock Exchange Association Ltd. (CSE) and on Multi Commodity Exchange Ltd. (MCX-SX).

MANAGEMENT

There is no Change in Management of the Company during the year under review.

DIRECTORS

During the year, Mr. Nand Kishore Fogla, Non-Executive Director of the Company, has resigned from the Board w.e.f. 10th January 2015 due to his personal commitments. Your Directors wish to place on record their appreciation for the guidance and inputs provided by Mr. Nand Kishore Fogla during his tenure as Director of your Company.

Further, Mr. Raj Kumar Chhakra has been appointed as Additional Director (Independent) w.e.f. 10th January 2015 to broad-base the Board.

Further, Mrs. Puspa Devi Saraswat has been appointed as Additional Director (Independent) w.e.f. 28th March 2015 in compliance with requirement of Section 149(1) of Companies Act, 2013.

Further, none of the Directors of the Company are disqualified under sub-section (2) of Section 164 of the Companies Act, 2013.

INDEPENDENT DIRECTORS

As per provisions of Section 149 of the 2013 Act, independent directors shall hold office for a term up to five consecutive years on the board of a company, but shall be eligible for re-appointment for another term up to five years on passing of a special resolution by the company and disclosure of such appointment in Board's Report. Further Section 152 of the Act provides that the independent directors shall not be liable to retire by rotation in the Annual General Meeting ('AGM') of the Company.

As per Revised Clause 49 of the Listing Agreement (applicable from October 1, 2014), any person who has already served as independent director for five years or more in a company as on October 1, 2014 shall be eligible for appointment, on completion of the present term, for one more term of up to 5 (five) years only.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, TRIBUNALS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of Financial Year and date of the report.

CHANGE IN SITUATION OF REGISTERED OFFICE

During the year, the Company has shifted its Registered Office from 1, R. N. Mukherjee Road, Mezzanine Floor, Room No. 12, Kolkata-700 001 to Room No. 40, 5th Floor, Martin Burn House, 1, R N Mukherjee Road, Kolkata-700 001 i.e. within the City limit of Kolkata.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Board of Directors confirms that:

1. In the preparation of the annual accounts, for the year ended 31st March 2015, all the applicable accounting standards prescribed by the Institute of Chartered Accountants of India have been followed;

2. The Directors had adopted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. The Directors had prepared the annual accounts on a going concern basis.

5. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

6. Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

INFORMATION TECHNOLOGY

Your Company believes that in addition to progressive thought, it is imperative to invest in information and technology to ascertain future exposure and prepare for challenges. In its endeavor to obtain and deliver the best, your Company has tie-ups with an IT solution Company to harness and tap the latest and the best of technology in the world and deploy/absorb technology wherever feasible, relevant and appropriate.

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments viz. Finance and Capital Market activities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As required under Rule 7 of The Companies (Meetings of Board and its Powers) Rules 2014, the Company has a vigil mechanism named Fraud Risk Management Policy (FRM) to deal with instance of fraud and mismanagement, if any. The detail of the FRM Policy is explained in the Corporate Governance Report.

RESEARCH & DEVELOPMENT

The Company believes that technological obsolescence is a reality. Only progressive research and development will help us to measure up to future challenges and opportunities. We invest in and encourage continuous innovation. During the year under review, expenditure on research and development is not significant in relation to the nature size of operations of your Company.

Statutory Auditors

The Auditors M/s Bharat D. Sarawgee & Co., Chartered Accountants, Kolkata who are Statutory Auditors of the Company and holds the office until the conclusion of ensuing Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company fromthe conclusion of the 33rd Annual General Meeting up to the conclusion of the 37th consecutive Annual General Meeting (subject to ratification by the members at every subsequent AGM). As required under the provisions of Section 139 & 142 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Bharat D. Sarawgee & Co.; that their appointment, if made, would be in conformity with the limits specified in the said Section.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Neha Poddar, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed elsewhere in this Annual Report.

Internal Auditors

The Company has appointed M/s. V. Khandelwal & Associates, Chartered Accountants (FRN -328663E) as Internal Auditors of the Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed elsewhere in this Annual Report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013

Since the Company is into the Business of Financing and into the Investing activities in Shares and Securities; the information regarding conservation of energy, Technology Absorption, Adoption and innovation, under section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is reported to be NIL.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has not earned or used foreign exchange earnings/outgoings during the year under review.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

REPORT ON CORPORATE GOVERNANCE

The Company conforms to the norms of Corporate Governance as envisaged in the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges. Pursuant to Clause 49 of the Listing Agreement, a Report on the Corporate Governance and the Auditors Certificate on Corporate Governance are annexed to this report.

APPRECIATION

Your Directors wish to place on record their appreciation towards the contribution of all the employees of the Company and their gratitude to the Company's valued customers, bankers, vendors and members for their continued support and confidence in the Company.

By order of the Board

For Khoobsurat Limited

Goutam Bose

Managing Director

(DIN : 02504803)

Kolkata, May 29, 2015

Registered Office : Room No. 40, 5th Floor, Martin Burn House, 1, R N Mukherjee Road Kolkata-700 001