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Directors Report of Gangotri Textile Ltd.

Mar 31, 2015

Dear Members,

The Directors present the 26th Annual Report of the Company along with the audited statement of accounts for the year ended 31 st March 2015.

FINANCIAL RESULTS (in Rs)

PARTICULARS 31.03.2015 31.03.2014

Sales Turnover 74,35,46,393 80,84,14,576

Profit/Loss before interest, (7,69,99,024) (3,48,25,087) depreciation and tax Less: Interest 26,58,10,220 27,92,70,128

Depreciation 23,32,89,607 17,53,73,826

Extraordinary Items 97,88,309 5,77,88,023

Net Profit/loss for the year (43,18,89,112) (54,72,57,064) before Tax

PERFORMANCE

During the year under review, the performance of the company was below possible level due to insufficient Working Capital facility and the overall recession prevailed in the Textile Industry.

With the limited resources available, the company found it extremely difficult to run all the units. At the same time it was felt not advisable to close one or more Units and the assets are to be maintained in a good condition atleast to get a good price for that matter.

DEBT RECOVERY TRIBUNAL:

M/s State Bank of India, Stressed Asset Management Branch, Coimbatore as the leader of the consortium banks have filed Original Application in the Debt Recovery Tribunal, Coimbatore for the recovery of the outstanding dues of Rs. 353,38,13,295/- as on 1-3-2013. This outstanding amount is exclusive of the dues to IDBI.. The matter is sub-judice. In the meantime the Lenders have initiated action for the recovery of the dues under SARFAESI Act The company has filed appeal against the Original Application filed by M/s State Bank of India and challenging the action of the Lenders and the matter is sub-judice.

DIVIDEND

In view of the huge loss incurred by the company during the year, the Directors are not in a position to recommend any dividend for the financial year ended 31st March, 2015.

FINANCE

The total outstanding dues to the consortium of Lenders as on 31-3-2015 including interest accrued is Rs 365,17,98,258 / - .During the previous year the company has requested the Lenders to defer the sale of remaining two Wind Mills since the disposal of Windmills would directly affect the operations of the remaining units including the garment production.. This would result in loss of production as well as under utilization of manpower. Sale of Windmill should not be seen in isolation and instead it should be seen as a facilitator of for running the other units. However, the Lenders have sold the remaining two Wind Mills on 6-11-2014 for a total consideration of Rs 13,63,00,000 /-. This will have serious impact on the working of the company and the full impact will be felt in the coming years.

The company is taking all possible effort to keep all the units running so as to get maximum value while disposing the same for the re-payment of Bank Loans.

During the year under review, the company has been served with a Show Cause Notice dated 12-1-2015 from M/s Canara Bank deciding to include the name of the Company as a Wilful Defaulter and the company has replied suitably to Canara Bank. The company has also been served with a Show Cause Notice dated 24-4-2015 from State Bank of India, Stressed Asset Management Branch deciding to include the name of the Company as a Wilful Defaulter and the company has requested them to refer the issue to the Redressal Committee for submission of objections.

Since the Lenders started taking various steps including release of E-Auction Notices, the Company as stated elsewhere was forced to resort to seeking remedies through legal avenues. However, the intention of the company was (or for that matter is) not to find out solutions for its heavy debt problem in the corridor of Courts. They have taken symbolic possession of all the Units and in fact taken physical possession of the Weaving & Processing Unit (Unit 8) and Wet Processing Unit ( Unit- 6) at Perundurai on 21-5-2015 and also the Ring Spinning Unit (Unit-4 & 9 ) at Udamalpet on 3-6-2015. They are also trying to sell the Units through E-auction route and notices have been issued in this connection and the auction were held on 22-12-2013, 9-3-2014,13-9-2014,12-12-2014, we understand that some of the units have been sold in the auction. Parallely the Company has offered several One Time Settlement proposal (OTS) and the some have been rejected by the bank. The company is still negotiating with the banks for the one time settlement.

In the process of implementation of the SARFAESI ACT, the Lenders have recovered a sum of Rs 40,47,22,930/- by selling the assets consisting of three vacant lands and five Wind Mills and also by way of retention from every collection which comes to Rs 13,61,95,530/- upto 31 -3-2015. Lenders have imposed daily retention without regard to the working capital requirement of the company forcing the company to close its unit requirement one after another.

DEPOSITS

The company is not accepting Fixed Deposits. The relevant provisions of Section 73 of the Companies Act,2013 in this regard to deposits wherever applicable have been duly complied with.

CORPORATE GOVERNANCE

A separate Report on the Corporate Governance is enclosed as part of this Annual Report. The Auditors of the Company have also given their certificate relating to compliance of Corporate Governance and this report is annexed to the report of Corporate Governance as is required by the Listing Agreement.

LISTINGS

The company's shares are listed both in National Stock Exchange of India Ltd and Mumbai Stock Exchange Ltd. The company has paid listing fee to both the exchanges. The company has already applied for de-listing of its equity shares to Calcutta Stock Exchange Association Ltd and Coimbatore Stock Exchange Ltd. Though all the formalities have been completed and reminders have been sent, reply from these two stock exchanges are awaited. However no listing fee has been paid to these two stock exchanges.

2. Extracts of the Annual Return.

As per the requirements of provisions of the Companies Act, 2013, the extract of the Annual Return in the prescribed Form MGT-9 is annexed hereto as Annexure 1 froming part of this report.

3. Number of Meetings of the Board.

Details of number of meetings of Board of Directors and Committees thereof and the attendance of the Directors in such meetings are provided in the Corporate Governance Report attached elsewhere in the Annual Report.

4. Directors

At Appointment

Sri. N.Venkatesan was appointed as an Independent Director of the company in the Board Meeting held on 12-11-2014. He is a practicing Chartered Accountant. He is also the Internal Auditor for the Karunya University, Coimbatore. He has submitted necessary declaration as provided under the Clause (7) of Section 152 of the Companies Act, 2013.

Smt. M.V.Suryaprabha was appointed as an independent Director of the company in the Board Meeting held on 12-11-2014. She has been appointed as a Woman Director to comply with the provision of Rule 3 of The Companies (Appointment and Qualification of Directors ) Rule, 2014. She is a practicing Advocate. She has submitted necessary declaration as provided under the Clause (7) of Section 152 of the Companies Act, 2013.

B) Resignation

Sri. R.Dhandapani was appointed as an Independent Director in the Board Meeting held on 13-8-2014 and subsequently resigned on 8-9-2014 due to his personal reasons. Necessary returns in respect of his appointment as well as his resignation were filed with the Registrar of Companies, Coimbatore.

M/s Canara Bank have withdrawn the nomination of Sri. P.Venugopal from the Board of the company on 13-8-2014 and in his place have nominated Sri. P.T. Kalaiselvan with effect from 13-8-2014.

M/s State Bank of Hyderabad have withdrawn the nomination of Sri. LV.Ravindra Kumar from the Board of the company on 31-3-2015 and in his place have nominated Sri. Rajanikanta Naik with effect from 1-4-2015

M/s IDBI Bank Ltd have withdrawn the nomination of Sri. G.V.Chandra Bhaskar from the Board of the Company with effect from 31-1-2015 and have not appointed anybody in his place.

5. Directors' Responsibility Statement.

In terms of the requirement of Section 134 (3) (c) of the Companies Act, 2013, the Directors hereby confirm:

1) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures

2) that 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 the accounting year namely March 31,2015 and of the profit / loss of the Company for that period.

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) that the Directors have prepared the Annual Accounts on a going concern basis.

5) the Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate

6 the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and are operating effectively.

6. Nomination and Remuneration Committee and Policy.

As per the requirements of the provisions of the Companies Act, 2013, a Nomination & Remuneration Committee was formed by the Board of Directors consisting of

I.Sri. N. Venkatesan-Chairman (Non-Executive-Independent)

2.Smt M.V.Suryaprabha-Member (Non-Executive-Independent)

3.Sri. R.P.Joshua Member (Non-Executive-Independent)

The said committee has been empowered and authorized to exercise the power as entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company has a policy on Directors' appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013 .The Nomination and Remuneration policy is annexed herewith as Annexure 2.

7. Declaration by Independent Directors

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6 ) of the Companies Act, 2013 so as to qualify themselves to be appointed / continued as Independent Directors under the provisions of the Companies Act, 2013 and the relevant Rules thereunder.

8. Explanation & Comments

The reports of Statutory Auditors appearing elsewhere in the Annual Report and that of the Secretarial Auditors (annexed hereto as Annexure 3) are self-explanatory the qulification / Observation of the statutory Auditors reported elsewhere in the Independent Auditors Report.

9. Particulars of Loans / Guarantee / Investments

Details of Loans / Advances / Investments as per the provisions of Section 186 of the Companies Act, 2013 is given under Notes to Financial Statements.

10. Particulars of Contracts with Related Party

All the transactions of the company with related parties are at arm's length and have taken place in the ordinary course of business. Provisions of Section 188 of the Companies Act, 2013 is not applicable.

11. Material Changes

There is no material changes or commitments after closure of the financial year till the date of this report.

12. Auditors

a) Statutory Auditors

M/s.Thakker & Sanghani, Chartered Accountants, retire at the ensuing Annual General Meeting and they have given necessary certificate in terms of provisions under the Companies Act, 2013. They are entitled to be re-appointed. They have consented and confirmed their eligibility and desire to continue as Statutory Auditors of the Company.

b) Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the Directors on the recommendation of the Audit Committee have appointed Sri. N. Krishnan, Practising Cost Accountant as the Cost Auditor of the Company for the financial year 2015-16.

c) Secretarial Auditor.

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014 , the Company has appointed Mrs. V.M.Vennila , a Practising Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2014-15

13. Audit Committee

In pursuance of the applicable provisions of Section 177 of the Companies Act, 2013 a committee of Directors consisting of three Directors has been constituted as Audit Committee. The Directors who are the members of this committee are

1) Sri. N.Venkatesan - Independent Director - Chairman

2) Sri. R.P.Joshua - Nominee Director - Member

3) Smt .Suryaprabha - Independent Director - Member

The Company Secretary shall act as the Secretary of the Audit Committee as well.

The Board has accepted the recommendations of the committee and there were no incidences of deviation from such recommendations during the financial year under review.

The company has devised a Vigil Mechanism in the form of a Whistle Blower Policy inpursuance of the provisions of Section 177 (10) of the Companies Act, 2013 . During the year under review, there were no complaints received under this mechanism. The whistle Blower Policy is uploaded in the company's website.

14. Stakeholders Relationship Committee

In pursuance of the applicable provisions of Section 178 (5) of the Companies Act, 2013 a committee of Directors consisting of three Directors has been constituted as Stakeholders Relationship Committee. The Directors who are the members of this committee are

1) Sri. N.Venkatesan - Independent Director

2) Sri. Manoj Kumar Tibrewal - Managing Director

3) Sri. Mohanlal Tibrewal - Executive Director

15. Corporate Social Responsibility Committee

In terms of the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility Committee is to be constituted for the purpose of implementing the Corporate Social Responsibility. As on date, the Company does not come under the category of Companies who have to implement this scheme.

16. Disclosure under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Wokplace (Prevention, Prohibition and Redressal) Act, 2013. In this connection the company has set up Internal Complaints Committee (ICC) to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed off during the year 2014-15.

No of complaints received : Nil No of complaints redressed : Nil

17. Industrial Relations

Industrial relations continues to be cordial and the Directors appreciate the co-operation extended by the employees at all levels.

18. Energy Consumption

Energy consumption particulars as required under Rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rule 1988 are given in the Annexure attached.

19. Technology Absorption

Technology absorption particulars as required under Rule 2 of the Companies (Disclosure of particulars in the Report of Board of Directors) Rule 1988 are given in the Annexure attached.

20. Foreign Exchanhe Earnings and Outgo.

Total Foreign Exchange used and earned is NIL during the year under review.

21. Evaluation of Board's Performance

On the advise of the Board of Directors, the Nomination and Remuneration Committee, the company have formulated the criteria for the evaluation of the performance of Board of Directors , Independent Directors, Non- Independent Directos and the Chairman of the Board. Based on that performance, evaluation has been undertaken. The Independent Directors have also convened a separate meeting for this purpose. All the results and' the evaluation has been communicated to the Chairman of the Board of Directors. All the Directors of the Board are familiar with the business of the company.

22. General

There are no employees falling under Section 217 (2A) of the Companies Act, 1956. The information pursuant to the Company (disclosure to particulars in the report of Board of Directors) Rules 1988 to the extent applicable is attached.

23. Matters as may be prescribed

As per Rule 8(5) of the Companies (Accounts) Rule, 2014 the following additional information are provided.

1 The financial summary or highlights The financial highlights is provided in this report.

2 The change in the nature of business if any There is no change in the business line of the company.

3 The details of Directors or Key Managerial Personnel who were appointed or have resigned during the year. There is no change in the Key Managerial Personnel. However the change in the directorship has been mentioned in point No 4 of this report.

4 The names of companies which have become or ceased to be subsidiaries, joint ventures, or associate companies during the year: None

5 The details relating to deposits covered under Chapter V of the Act: The Company has not accepted deposits.

6 The details of deposits which are not in compliance with the requirements of Chapter V of the Act: Not Applicable.

7 The details of significant and material orders passed by the Regulators or Court or Tribunals impacting the going concern status and company's operation in future As on the financial year ended 31 st March, 2015 or as on the date of this report, there is no such orders.

8 The details in respect of adequacy of Internal Control with reference to financial statements. Procedures are set out so as to detect and prevent frauds. The financial statements are prepared in accordance with the Accounting Standards issued by ICAI.

22. Acknowledgement.

Your Directors wish to thank and record their appreciation to all the Bankers of the Company for their valuable financial support extended to the Company as also for the valuable advice and guidance given by them. Your Directors also wish to thank the suppliers and all others who have extended their valuable support during times of turbulence. Last but not the least, your Directors express their heartfelt thanks for the employees at all levels who have stood by the Company in these testing times.

By Order of the Board For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL MANAGING DIRECTOR

Coimbatore MOHANLAL TIBREWAL 28-5-2015 EXECUTIVE DIRECTOR








Mar 31, 2014

Dear Members,

The Directors present the 25th Annual Report of the Company along with the audited statement of accounts for the year ended 31 st March 2014.

FINANCIAL RESULTS (in Rs )

PARTICULARS 31.03.2014 31.03.2013

Sales Turnover 80,84,14,576 86,62,61,319

Profit/Loss before interest, depreciation and tax (3,48,25,087) (2,38,34,410)

Less: Interest 27,92,70,128 31,35,08,967

Depreciation 17,53,73,826 18,03,39,897

Impairment of Asset 5,77,88,023 56,67,64,212

Net Profit/loss for the year before Tax ( 54,72,57,064) (108,44,47,486)



PERFORMANCE

During the year under review, the performance of the company is not satisfactory because of working in a special situation of financial distress with very limited Working Capital availability. The company is now working primarily on" Asset Protection Mode " With the limited resources available, the company found it extremely difficult to run all the units. At the same time it was felt not advisable to close one or more Units and the assets are to be maintained in a good condition atleast to get a good price for that matter. Hence, keeping in mind the life of the assets and for a regular income, the company has given Ring Spinning Unit ( Unit - 4 & 9 ) situated at Pushpattur Village, Udamalpet Taluk and Open End Spinning Unit (Unit -3) situated at Kolhapur, Maharastra State to Job Work.

REFERENCE TO BIFR:

As reported last year, the Company has made a reference to Board for Industrial and Financial Reconstruction (BIFR) in terms of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 on 13-6-2013 in view of the accumulated loss exceeded the Net Worth of the company during the financial year ended 31st March, 2013. M/s State Bank of India, as a Leader of the consortium of bankers have filed a Miscellaneous Application to the Board for Industrial and Financial Reconstruction (BIFR) seeking for the abatement of the reference made by the company in terms of third proviso to Section13 (1) of Sick Industrial Companies (Special Provisions ) Act, 1985. The case was heared on 10-9-2013, 21-11-2013,9-12-2013and28-1-2014 and the Board has finally abated the reference on 26-3-2014.

DEBT RECOVERY TRIBUNAL:

M/s State Bank of India, Stressed Asset Management Branch, Coimbatore as the leader of the consortium banks have filed Original Application in the Debt Recovery Tribunal, Coimbatore for the recovery of the outstanding dues of Rs 353,38,13,295 /- as on 1-3-2013.. This outstanding amount is exclusive of the dues to IDBL. The matter is sub-judice. In the meantime the Lenders have initiated action for the recovery of the dues under SARFAESI Act. The company has filed appeal against the Original Application filed by M/s State Bank of India and challenging the action of the Lenders and the matter is sub-judice.

DIVIDEND

In view of the huge loss incurred by the company during the year, the Directors are not in a position to recommend any dividend for the financial year ended 31st March, 2014.

FINANCE

During the year under review, the Company has been served with Notice under Section 13( 4) of the SARFAESI Act, (Possession Notice) on 11 -6-2013 and 11 -7-2013 taking symbolic possession of all the Units Subsequently, the Lenders have issued E-auction Sale Notice on 22-12-2013 for the sale of (1) Ring Spinning Units (Unit 4 & Unit-9) situated at Pushpattur Village, Udamalpet Taluk (2) Weaving & Processing Unit (Unit-8) situated at SIPCOT Industrial Growth Center, Perundurai and (3) Two Wind Mills situated at Udamalpet Taluk and the auction date was fixed on 30-1-2014 and the outcome of auction is not known.

The company felt that, the sale of Windmills would be detrimental in the interest of the company. More than the financial loss (by way of EB Bill going up by Rs.35 lakhs per month), disposal of Windmills will directly affect the operations of the remaining units including the garment production. Everyday, during the peak hour (6 pm to 10 pm) the regular TNEB power is not available for production. This will result in loss of production as well as under utilization of manpower. If the Company has the Windmill, it can use the Power Generated and overcome the Bottle neck. In short, sale of Windmill should not be seen in isolation and instead it should be seen as a facilitator for running the other units. Therefore, the company was forced to file two Writ Petition in the Hon''ble High Court, Chennai praying for a direction to the bank to refrain from putting the Windmill to sale on the Ground that E- Auction is not the correct process adopted by the Lenders for the recovery of their dues and also challenging the classification of the Company''s Account as a Non- performing Asset by the Lenders.

The case came up for hearing on 29-1-2014 and their Lordships after hearing the case were pleased to grant Interim Injunction relief as to "Not to confirm the Sale in the e-Auction which is to be conducted on 30th January, 2014 until the final disposal of the main Writ Petition." Ultimately, the Hon''ble Madras High Court has dismissed a bunch of petitions filed for various issues vide its Order dated 8-5-2014. The High Court has also held that e -Auction is also a valid means of recovery.

In the meantime,State Bank of India has issued another E-auction Sale Notice on 9-3-2014 for the sale of all the Units of the Company excluding the Open End Spinning Unit ( Unit-3) situated at Kolhapur & two windmills and the auction date was fixed on 9-4-2014. The Reserve Price fixed for all the Units was Rs 192.32 crores. In the above Notice two Wind Mills were not included as the issue is pending before the Court.

Since the Lenders started taking various steps including release of e-Auction Notices, the Company as stated elsewhere was forced to resort to seeking remedies through legal avenues. However, the intention of the company was ( or for that matter is ) not to find out solutions for its heavy debt problem in the corridor of Courts.

The Company strongly believes that any solution which is practical as well as permanent one, can be found only with the co-operation of the Lenders.

Therefore, parallely the Company started scouting for ways and means to mitigate its debt burden through all possible sources including the Lenders. The Company is glad to share with you the fact that negotiations are underway with an entity who has shown keen interest in steeping in to the company initially as a Strategic Investor. Once this effort of the company fructifies, the company will be a in position to approach the Banks with a proposal of One Time Settlement (OTS).

Once the discussions reach a particular level, the company shall approach the Banks, the Sharehoders and other Statutory Authorities to proceed further.

DEPOSITS

There are no deposits outstanding as on 31st March 2014 remaining unclaimed or unpaid. The company has complied with all the requirements of Section 58A of the Companies Act and the rules there under in so far as the deposits which were in existence during the earlier period is concerned.

CORPORATE GOVERNANCE

A separate Report on the Corporate Governance is enclosed as part of this Annual Report. The Auditors of the Company have also given their certificate relating to compliance of Corporate Governance and this report is annexed to the report of Corporate Governance as is required by the Listing Agreement.

LISTINGS

The company''s shares are listed both in National Stock Exchange of India Ltd and Mumbai Stock Exchange Ltd. The company has paid listing fee to both the exchanges. The company has already applied for

de-listing of its equity shares to Calcutta Stock Exchange Association Ltd and Coimbatore Stock Exchange Ltd. Though all the formalities have been completed and reminders have been sent, reply from these two stock exchanges are awaited. However no listing fee has been paid to these two stock exchanges.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the requirement of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

1) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed;

2) that 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 the accounting year namely March 31, 2014 and of the profit / loss of the Company for that year

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) that the Directors have prepared the Annual Accounts on a going concern basis.

REPLY TO THE QUALIFICATION/OBSERVATIONS OF THE STATUTORY AUDITORS:

1. The due action is being taken by the management to recover the dues/confirmation.

2. On receipt of a demand from the lenders regarding the higher interest on account of company being out of CDR package, the due provision for the interest differentials will be made in the accounts.

3. In the opinion of the Management, in order to reflect the actual position of Debtors and creditors, netting of Debit and Credit balance of the same party has been resorted to.

4. The management has taken earnest efforts to strengthen the internal controls.

RESIGNATION OF INDEPENDENT DIRECTOR

Sri. Ullas R Sanghvi, the only Independent Director on the Board of the Company has vide his letter dated 19-5-2014 informed that he would resign from the Directorship (as Independent Director) and Chairman of the Audit Committee with effect from 29-5-2014 due to pre-occupation in his professional work.

Sri. Ullas R Sanghvi was inducted in the Board on 7-5-2009. He is a Chartered Accountant by profession and has vast knowledge in the Software Development. He has contributed significantly to the Board during Company''s crisis period. The Board of Directors wish to place on record their appreciation for the valuable contribution offered by Sri. Ullas R Sanghvi during his tenure as an Independent Director.

The Company is looking after the replacement for the vacancy created by the resignation of Sri. Ullas R Sanghvi and shall be filled within the time limit prescribed by the Company''s Act, 2013.

DIRECTORS RETIRING BY ROTATION :

Since the only Independent Director Sri. Ullas R Sanghvi who is supposed to retire by rotation at this 25th Annual General Meeting has submitted his resignation with effect from 29-5-2014, there is no Director retiring by rotation during this year.

AUDITORS

M/s.Thakker & Sanghani, Chartered Accountants, retire at the ensuing Annual General Meeting and they have given necessary certificate in terms of Section 224 (1) (b) of the Companies Act, 1956. They are entitled to be re-appointed.

GENERAL

There are no employees falling under Section 217 (2A) of the Companies Act, 1956. The information pursuant to the Company (disclosure to particulars in the report of Board of Directors) Rules 1988 to the extent applicable is attached.

ACKNOWLEDGEMENT:

Your Directors wish to thank and record their appreciation to all the Bankers of the Company for their valuable financial support extended to the Company as also for the valuable advice and guidance given by them. Your Directors also wish to thank the suppliers and all others who have extended their valuable support during times of turbulence. Last but not the least, your Directors express their heartfelt thanks for the employees at all levels who have stood by the Company in these testing times.

By Order of the Board For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL MANAGING DIRECTOR

Coimbatore MOHANLAL TIBREWAL 28-5-2014 EXECUTIVE DIRECTOR


Mar 31, 2013

TO SHAREHOLDERS

Ladies and Gentlemen,

The Directors present the 24 Annual Report of the Company along with the audited statement of accounts for the year ended 31s March 2013.

FINANCIAL RESULTS ( in Rs )

PARTICULARS 31.03.2013 31.03.2012

Sales Turnover 86,62,61,319 1,61,73,01,006

Profit/Loss before interest, depreciation and tax (2,38,34,410) 5,30,07,417

Less: Interest 31,35,08,967 26,78,25,730

Depreciation 18,03,39,897 18,61,96,709

Extraordinary Items 56,67,64,212 3,80,76,132

Net Profit / loss for the year before Tax (108,44,47,486) (43,90,91,154)

PERFORMANCE

There has been no improvement in the adverse power scenario prevailing in the State of Tamil Nadu. The power position in the State remains of shortage and effective power availability is only 33 % and that too an un-scheduled one. Moreover, the un-scheduled tripping without any prior notice by TNEB is causing heavy damage to the quality of yarn and machines . Hence, the performance of the Company was badly affected due to severe power cut, low Plant utilization, meager Working Capital availability and low finished goods margin in open end division. The performance during the year under review, the conditions in the industry as a whole, various favorable and unfavorable factors are being discussed in detail in the Management Discussion and Analysis.

REFERENCE TO BIFR :

Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 provides that where an Industrial Company has become a Sick Industrial Company, the Board of Directors of the Company, shall, within 60 days from the date of finalization of the duly audited accounts of the Company for the financial year as at the end of which the company has become Sick Industrial Company, make a reference to the Board for Industrial and Financial Reconstruction (BIFR) for determination of measures which shall be adopted with respect to the Company.

It is observed that as per the audited accounts of the company as on 31-3-2013, the accumulated loss have exceeded the entire Net Worth of the company and it has become necessary for the company to make reference such erosion to Board for Industrial and Financial Reconstruction (BIFR) . Necessary resolution authorizing the Board of Directors to refer to BIFR is included in the Notice convening the 24 Annual General Meeting of the company.

The main reasons for the loss are as under.

1. More than 60 % Power Cut in the state of Tamil Nadu.

2. Poor capacity utilization.

3. Insufficient Working Capital to run the entire industry.

4. High cost borrowings & Tight liquidity condition.

5. Imbalanced Capex in respect of the project undertaken.

6. Unremunerative price in open end divisions.

In view of the accumulated loss having eroded the Net Worth, the Company is a Sick Company within the meaning of Section 3(1) (0) Sick Industrial Companies (Special Provisions) Act, 1985.

DIVIDEND

In view of the huge loss incurred by the company during the year, the Directors are not in a position to recommend any dividend for the financial year ended 31s March, 2013.

PROJECT

The project as it was envisaged has been partially completed. In view of the financial constraints, there has been a change in the project and to the extent to which advances are available with the machinery suppliers, the project is being re-designed so that there is no additional outflow on the score of project implementation.

In fact, the projected turnover could not be achieved because of the imbalanced Capex. The land as detailed in the project have been acquired and the Building also as projected have been built -up. But the machineries as projected could not be procured and installed because of cost escalation during the initial stage of implementation of the project, non-adherence of delivery schedule by the supplier. Consequently, there was shortage of Working Capital and all the units were to be managed with the available Working Capital.

The difficult situation prevailing in the Textile Industry in the State of Tamil Nadu continued during the year under review owing to various factors such as huge shortage of power and skilled manpower. There was no improvement in the power position also as the average power shut down per day touched up to 12-14 hours. This has affected the production schedule very badly and in fact only 33 % production was achieved with the available power which has made the Industry difficult to run. In so far as the improvement in power position is concerned, the solution appears to far away as almost all the Power Generating Units in the State are under renovation and also due to failure of both the South -West and North-East monsoons. Operating with captive Diesel / Furnace Oil Generators are proving to be totally un-economical. Having Wind Mill is giving huge respite as far as some part of the year the company becomes entitled to run during peak hour.

The Labour scenario is also not encouraging At all levels and in all categories, locating and retaining capable hands has become a real issue.

FINANCE

During the year under review, the Company has been served with Notice u/s Section 13(2) of Securitization and Reconstruction of Financial Assets and ''Enforcement of Security Interest Act, 2002 ( SARFAESI ACT ) on 4-12-2012 and subsequently an amended Notice dated 4-4-2013 calling upon the Company to repay the outstanding liabilities of Rs 360,24,15,321 /- (Rupees three hundred sixty crores twenty four lakhs fifteen thousand three hundred and twenty one only) excluding IDBI Bank as on 15-11-2012 with further interest and incidental expenses. The Company has sent its objection on 2-2-2013 to the above Notice through M/s Dhir & Dhir, a Legal Forum in New Delhi and a reply has been received from M/s State Bank of India ,Stressed Assets Management Branch, Chennai vide their letter dated 8-2-2013 rejecting the entire objection .

The Board of Directors in their meeting held on 14-2-2013 have reviewed the above said SARFAESI Notice and recorded the same. As already informed, the Company proposed to sell the Weaving & Processing Unit at Perundurai (Unit 8) and the Ring Spinning Unit at Pushpattur (Unit 4 and Unit 9) and settle the outstanding loan with the amount realized as One Time Settlement (OTS) .

The Company has offered an One Time Settlement proposal and the same was rejected by the Lenders and they have preferred to file a case in the Debt Recovery Tribunal . (DRT) The Company will file counter as and when summon is received from DRT.

DEPOSITS

There are no deposits outstanding as on 31 March 2013 remaining unclaimed or unpaid. The company has complied with all the requirements of Sec.58A of the Companies Act and the rules there under in so far as the deposits which were in existence during the earlier period is concerned.

CORPORATE GOVERNANCE

A separate Report on the Corporate Governance is enclosed as part of this Annual Report. The Auditors of the Company have also given their certificate relating to compliance of Corporate Governance and this report is annexed to the report of Corporate Governance as is required by the Listing Agreement.

LISTINGS

The company''s shares are listed both in National Stock Exchange of India Ltd and Mumbai Stock Exchange Ltd. The company has paid listing fee to both the exchanges. The company has already applied for de-listing of its equity shares to Calcutta Stock Exchange Association Ltd and Coimbatore Stock Exchange Ltd. Though all the formalities have been completed and reminders have been sent, reply from these two stock exchanges are awaited. However no listing fee has been paid to these two stock exchanges.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the requirement of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

1) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed;

2) that the Directors have selected 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 accounting year namely March 31, 2013 and of the profit / loss of the Company for that year;

3) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) that the Directors have prepared the Annual Accounts on a going concern basis.

Reply to the Qualifications / Observations of the Statutory Auditors:

a) Due action is being taken by the Management to recover the dues / confirmation.

b) Relating to the transaction of Job Work at Unit- 3, Unit-4 and Unit- 9 efforts being initiated to obtain the concurrence of the Lenders as per the guidance given by the Board of Directors.

c) In spite of the Company being out of CDR Package, the company is awaiting necessary confirmation / demand of the Interest from the Bank. As soon as the same is received, the higher provision of Interest will be made in the accounts.

d) Due to financial and other resource constraints, the Management had a temporary setback and every earnest effort is being made to set right the Internal Control.

DIRECTORS

Mr.Ullas R Sanghvi, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

AUDITORS

M/s.Thakker & Sanghani, Chartered Accountants, retire at the ensuing Annual General Meeting and they have given necessary certificate in terms of Section 224 (1) (b) of the Companies Act, 1956. They are entitled to be re-appointed.

GENERAL

There are no employees falling under Section 217 (2A) of the Companies Act, 1956. The information pursuant to the Company (disclosure to particulars in the report of Board of Directors) Rules 1988 to the extent applicable is attached.

ACKNOWLEDGEMENT :

Your Directors wish to thank and record their appreciation to all the Bankers of the Company for their valuable financial support extended to the Company as also for the valuable advice and guidance. Your Directors also wish to thank the suppliers and all others who have extended their valuable support during times of turbulence. Last but not the least, your Directors express their heartfelt thanks for the employees at all levels who have stood by the Company in these testing times.

By Order of the Board

For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL

MANAGING DIRECTOR

Coimbatore MOHANLAL TIBREWAL

23-5-2013 EXECUTIVE DIRECTOR


Mar 31, 2010

The Directors present the Twenty First Annual Report of the Company along with the audited statement of accounts for the year ended 31st March 2010.

FINANCIAL RESULTS Rupees in Lakhs

PARTICULARS 31.03.2010 31.03.2009

Sales Turnover 14,294.03 12,027.44

Profit/ (loss) before interest, depreciation

and tax 992.29 (1,395.80)

Less: Interest 2,760.18 3,817.69

Depreciation 1,801.17 1,798.58

Net loss for the year (3,569.06) (7,012.07)

Add: Loss brought forward from previous year (3,641.47) -

Taxes of prior years - 0.70

Prior year adjustment - income - 0.89

Investment Fluctuation Reserve reversed 0.23 -

Less: Taxes of prior years (0.33) -

Investment fluctuation reserve - (0.23)

Prof it / Loss available for Appropriation (7,210.63) (7,010.70) APPROPRIATIONS

Provision for Taxation Wealth Tax 0.50 0.50

Provision for Taxation - FBT - 12.00

Provision for Deferred Tax withdrawn (326.67) (2,090.96)

Deficit carried over to Balance Sheet (6,884.46) (4,932.24)

(7,210.63) (7,010.70)

PERFORMANCE

The performance during the year under review, the conditions prevailing in the industry in general, and the troubles and turmoil that the Company has been undergoing for the past 2 to 3 years are all matters covered by Management Discussion and Analysis which forms part of the Board Report. However, your Directors wish to state that while the year under review was better compared to the situation obtaining in 2008-09, still the level of working and the level of profitability is not sufficient not only to put the company out of red but also to service the existing loss. Your Directors are exploring the possibilities of restructuring loans in consultation with the Bankers and other lenders.

DIVIDEND

In view of the huge loss, your Directors are not in a position to recommend any dividend whatsoever.

PROJECT

The project which the Company undertook has been completed excepting Ring Spinning Unit where some items of machinery are yet to be purchased and installed. The whole project has been delayed not only due to suppliers equipments but also because of absolute dearth of funds which the Company is experiencing as a result whereof even if the suppliers were in a position to deliver, the Company was forced to defer the deliveries.

PROSPECTS

The prospects of the Spinning Industry appear to have improved but the improvement is yet to be seen in real terms in so far as the cloth market is concerned. The cloth prices which were good for about three months, in the year 2010, have suddenly dropped and at the moment, they are not remunerative.

With these circumstances prevailing in the industry in general and the financial constraints of the Company is facing, in particular, the Company can come out of the present difficult situation only if a major restructuring is done by bringing down the liabilities to sustainable level. For this, hiving off of some of the units may be inevitable and as and when any decision is taken, the shareholders will be approached for their permission as required by law.

FINANCE

The Company has been undergoing a very difficult period in view of the huge losses that it has incurred and at the same time it has also incurred capital expenditure. Because the Company was not able to service the debts even to the extent of interest, the first CDR Scheme was put in place and it was expected that by this time situation would have improved and the Company will be able to meet its commitments. However, such a situation is not to be. The Company has been having discussions with the bankers for second CDR Scheme or modification of the terms contained in the first CDR Scheme itself. At this point in time, the CDR Empowered Group has agreed for deferment of payment of all principal for a period of 18 months within which period the Company is expected to hive off of some of its units which will fetch monies in, in order to reduce the debt burden to sustainable levels. Every effort is being made towards this end and as has been stated, as and when any final decision is taken, which cannot be taken without the consultation and approval of the banks, the shareholders will also be approached for sanction of such hive off.

DEPOSITS

There are no fixed deposits outstanding as on 31st March 2010 remain unclaimed or unpaid. The Company has complied with all the requirements of Section 58A of the Companies Act, 1956 and all the rules thereunder in so far as the deposits which were in existence during the earlier previous year is concerned.

LISTING

The Companys shares are listed both in National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The Company has paid listing fee to both the Exchanges.The Company has already applied for de-listing of its Equity Shares in 1) The Calcutta Stock Exchange Association Ltd and 2) Coimbatore Stock Exchange Ltd and the order for de-listing is still awaited from them.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the requirement of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

i. that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed;

ii. that 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 the accounting year (namely March 31, 2010) and of the profit of the Company for that year;

iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

iv. that the Directors have prepared the Annual Accounts on a going concern basis.

DIRECTORS

Mr.A.S.Ravichandran, who was appointed as a Director has resigned during the year. Mr. R.P. Joshua , the Nominee Director of the Lending Banks has been appointed as Nominee Director with effect from 30-10-2009. Mr. Ullas R Sanghvi is retiring by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.

AUDITORS

M/s. Thakker & Sanghani, Chartered Accountants, retire at the ensuing Annual General Meeting and they have given necessary Certificate in terms of Section 224 (1) (b) by the Companies Act, 1956. They are entitled to reappointment.

GENERAL

There are no employees falling under Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors wish to thank and record their appreciation to all the Bankers of the Company for their valuable financial support extended to the Company as also for the valuable advice and guidance given by them for putting the Corporate Debt Restructuring Scheme in place. But for their co-operation this would not have been possible. Your Directors also wish to thank the suppliers and all others who have extended their valuable support during times of turbulence. Last but not the least, your Directors express their heartfelt thanks for the employees at all levels who have stood by the Company in these testing times.

By order of the Board

For GANGOTRI TEXTILES LIMITED

MANOJ KUMAR TIBREWAL

Managing Director

Coimbatore MOHANLAL TIBREWAL

19-05-2010 Executive Director

 
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