Dear Shareholders,
 
 I have great pleasure in extending to you all a very warm welcome to
 the 20th Annual General Meeting of your Company and present before you
 the performance of your Company.
 
 I am glad to inform you that during the year under review, performance
 of your company was satisfactory. The Board tried hard to give upward
 flip to the profitability and turnover and initialed measures to
 improve overall performance of the company.
 
 BUSINESS AND INDUSTRIAL ENVIRONMENT
 
 The industrial scenario continues to be positive and sustainable for
 growth and development industry. The capital market is very bullish and
 strong.
 
 The textile industry is likely to do well in coming years due to
 lifting of quantitative restrictions and quota barriers. The share,
 which the industry plans to envisage capturing in the international
 market could be substantial, provided the industry foster growth in
 right direction.
 
 The industry anticipates severe competition from China and other South
 Asian countries on removal of quota regime. The modernization of
 textile industry, rejuvenation of old textile sick units, speedier and
 cheap financial assistance, simplification of procedural formalities
 introduction of informa- tion technology in production, processing,
 selling and distributions, stricter quality checks are some of the
 important measures that the textile industry should promote and
 initiate to overcome threats posed by South East Asian countries.
 
 MODERNIZATION & RATIONALIZATION
 
 The technology is changing very fast. Any company, which keeps pace
 with the technology, will survive in the business. The new technology
 always provides time and energy devices. This will lead to saving in
 labour, time and cost of energy consumption. Your company is updating
 its machineries every now and then, which enable it to have cutting
 edge over its competitors. The cost of production also comes down
 drastically.
 
 PERFORMANCE APPRAISAL Operation
 
 The company has performed satisfactory during the year. The total
 income registered during the year was Rs. 2481.01 Lacs as against Rs.
 3700.01 Lacs in the previous year. The declination is mainly due to
 disposal of plant and machineries of spinning division of the company.
 
 Exports
 
 During the year under review your Companys export division-registered
 Sales of Rs. 136.20 lacs (Rs. 227.53 lacs) only. Your Company initiated
 several export promotion measures to improve exports
 
 Financial performance:
 
 The profit before tax was Rs. 100.29 lacs (71.83 lacs). The after tax
 profit was Rs.65.17 lacs (63.32 lacs) which was increased comparatively
 last year.
 
 The Debt: Equity ratio stood at 3.57:1 in the financial year 2006-2007
 as against 3.29:1 in the previous year.
 
 Merger
 
 Board of directors of the company has approved the amalgamation /merger
 of Strips Apparels Limited, a subsidiary company of Pantaloon
 Industries Limited, with the company as a part of its expansion plan.
 Strips Apparels Limited is manufacturing and trading company in
 readymade garments and textiles.
 
 Dividend
 
 Your Board has recommended a dividend at the rate of 5% p.a. same as
 declared and paid in the previous financial year 2005-2006
 
 Shareholders value
 
 The earning per share increased from Rs. 2.11 to Rs. 2.17 and the Book
 Value per share increased to Rs. 32.63 from Rs. 31.04. The market value
 of the companys share was in price range of Rs.10 to Rs. 33.15.
 
 THE FUTURE
 
 The year in retrospect was satisfactory. The turnover improved
 marginally and profitability constrained. I am optimistic to attain
 reasonable & sustain- able growth in the current financial year. Your
 management is trying hard to adopt best technology available in the
 textile and cut down the cost of production drastically.
 
 CORPORATE GOVERNANCE
 
 Your Company has initiated most of the measures prescribed for better
 corporate governance will facilitate transparency, accountability and
 equity in all facets of its operations and its interaction with its
 stakeholders, including shareholders employees and the government. Your
 Company is committed to achieving the highest standards of corporate
 governance. Your Company believes that all its operations and actions
 must serve the underlying goal of enhancing overall shareholder value,
 over a sustained period of time.
 
 CONCLUSION
 
 On behalf of the Board I take this opportunity to convey their sincere
 appreciation to all the Companys employees, shareholders, investors,
 Bank and Financial institution for their continued co-operation and
 support.
 
                                     For KAMADGIRI SYNTHETICS LIMITED
 
 DATE : 27/06/2007                                Pradip Kumar Goenka
 PLACE: Mumbai                           Chairman & Managing Director