1. The Company’s Philosophy on Corporate Governance

The Board of Directors and Management believe in adopting and practicing principles of good Corporate Governance with a view to:-

• Safeguard shareholders’ interest through sound business decisions, prudent financial management and high standard of business ethics: and

• Achieve transparency, accountability and integrity in the dealings and transactions of the Company

2. Board of Directors

(i) Composition :-

The Board of Directors comprises of six Directors as under:-

(ii) Board Meetings and attendance

Fifteen Board Meetings were held during the financial year ended on 31st March, 2007and the gap between two Board Meetings did not exceed four months.

The dates on which Board meetings were held are as follows :-

(iii) Attendance of each Director at the Board meetings and last Annual General Meeting (AGM) and the number of Companies and committees where he is Director/Member:-

3. Audit Committee

The Audit Committee was Constituted in accordance with the code of Corporate Governance which presently consists of three non-executive Directors namely Shri O. P. Bhardwaj, Shri Yogesh Mathur and Shri Puneet Saraf w.e.f. 20.02.2007 on cessation of Shri K. M. Pai as director, with Shri O. P. Bhardwaj as its Chairman.

(i) The terms of reference of the Audit Committee are as per the guidelines set out in clause no. 49 of the listing agreement with the Calcutta Stock Exchange where the shares of the Company are listed.

(ii) The Audit Committee had Five Meetings during the financial year 2006-07 ended on 31st March, 2007 as per details thereof and the names of Directors who attended the said meetings, are as here-under:-

Details of the Audit Committee Meetings held during the financial year 2006-07 and attended by the Directors:-

4. Remuneration Committee

The Board has not constituted a Remuneration Committee as it is not mandatory. The same will be constituted as and when the need will arise.

5. Remuneration Policy

sitting fees of Rs. 250/- for attending Board Meetings is paid to each of the Directors, who are not paid any remuneration.

Since Shri A.K. Sureka opted to be an Honorary Managing Director, no remuneration was paid to him during the financial year 2006-07 ended on 31st March, 2007

(i) Sitting fees paid to Directors for meetings of the Board :-

Name of Director	Amount (Rs.)
Shri A.K. Sureka	1750/-
Shri V.K. Sureka	1250/-
Shri Anand Gupta	500/-
Shri O.P. Bhardwaj	3750/-
Shri K.M. Pai	2250/-
Shri Yogesh Mathur	1750/-
Total :	11250/-

6. Code of Conduct for the Directors & Senior Managerial Personnel

In compliance to the provisions of Clause 49 of the Listing Agreement, the Board has laid down a code of conduct for all the Board Members and Senior Managerial Personnel and all Board Members and Senior Managerial Personnel have affirmed compliance of code of conduct as on 31st March, 2007 and a declaration to that effect duly signed by the Managing Director is attached and forms part of this report.

7. Investors’/ Shareholders’ Grievance Committee

This Committee, was constituted on 1st December, 2003, with a view to redress shareholders’/investors’ complaints etc. relating to delay in transfer of shares, demat, non-receipt of annual accounts, delays in balance sheet, split, duplicate, transmission, etc. of the shares issued by the Company. This Committee consisted of two Non-executive Directors namely Shri K.M Pai and Shri O.P. Bhardwaj with Shri K.M. Pai as Chairman till 20th February,2007 as Shri Puneet Saraf took over from Shri K.M. Pai on that date.

Shri V.K. Sureka was nominated as the Compliance Officer.

Number of pending transfers	Nil
Number of Shareholders’ Complaints received	Nil
Number of Complaints not solved	Nil

8. General Body Meetings

Details of Location and time of holding of last three Annual General meetings:

AGM for the financial Year ended	Venue	Date	Time
2003-2004 29h AGM	12, Dr. U.N. Brahmachari Street, Kolkata –700016	30-09-2004	11.00 A.M.
2004–2005 30th AGM	12, Dr. U.N. Brahmachari Street, Kolkata –700016	30-09-2004	11.00 A.M.
2005–2006 31st AGM	Room No. 107, 1st Floor,Anand Jyoti Building, 41, Netaji Subhas Road, Kolkata-700001	18.09.2006	11.30 A.M.

9. Brief Resume of Directors seeking re-appointment

(i). Shri O. P. Bhardwaj :-

Shri O. P. Bhardwaj is B. Com.(Honours) and having 26 years’ working experience in the Steel Industry. He was appointed as a Director of the Company on 1st December, 2003. He is liable to retire by rotation at the ensuing Annual General Meeting and ,being eligible, offers himself for re-appointment.

(ii) Shri Puneet Saraf ;-

Shri Puneet Saraf is B. Com (Honours) and having 7 years working experience in Textile Industry. He was appointed as Additional Director on 20.02.2007 by the Board of Directors under the provisions of Article No. 119 of the Articles of Association of the company. Being an additional director, he holds office upto the date of the Annual General Meeting. The company has received a notice u/s 257 of the Companies Act, 1956 from a member, proposing his name as a director of the company.

10. Disclosure

(a) Materially Significant related party transactions

During the period, no transaction of material nature had been entered into by the Company with the management or their relatives that may have potential conflict with the interests of the Company.

(b) Details of non-compliance by the company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

There was no instance of penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority as well as non-compliance of any matter related to the Capital Markets during the last three years.

11. Means of Communication

The quarterly, half yearly and yearly results are published in English in widely circulating “The Financial Express ” and in Bengali in “Kalantar ” from Kolkata.

12. General Shareholder information

Declaration of Managing Director

The Code of Conduct for the Directors and the Senior Managerial Personnel was adopted by the Board of Directors. All the Board Members and Senior Managerial Personnel have affirmed that they have complied with the Code of Conduct during the financial year ended on 31st March, 2007.

To the Shareholders of the Quality Synthetic Industries Limited.

We have examined the compliance of conditions of Corporate Governance by Quality Synthetic Industries Limited for the period ended on 31st March, 2007, as stipulated in clause 49 of the Listing Agreement of the said Company with the Stock Exchange.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that no investor grievances is pending for a period exceeding one month against the company as per the records maintained by the Investors’ Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company

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