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Directors Report of GTN Textiles Ltd.

Mar 31, 2015

Dear members,

The Directors present the TENTH Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2015

FINANCIAL RESULTS (Rs in lacs) PARTICULARS Year Ended

31.03.2015 31.03.2014

REVENUE

Income from operations 18598 28612

Other income 73 62

Changes in Inventories 758 (143)

Total 19429 28531

EXPENSES

a) Cost of materials 12655 19793

b) Employee benefits expense 2580 2443

c) Other expenses 3095 4001

Total 18330 26237

OPERATING PROFIT 1099 2294

Finance Costs 1089 1290

PROFIT/(LOSS) BEFORE DEPRECIATION, 10 1004

AMORTISATION & TAX EXPENSES

Depreciation and Amortisation Expenses 457 611

PROFIT/(LOSS) BEFORE TAX (447) 393

Tax Expenses

a) Current Tax (MAT) - 78

b) MAT credit entitlement - (78)

c) Deferred Taxation 141 197

PROFIT/(LOSS) AFTER TAX (306) 196

DIVIDEND

As explained in detail under performance review, your company has incurred loss for the year and hence the Board is unable to recommend a dividend for the financial year ended 31st March, 2015.

PERFORMANCE REVIEW

The Indian Textile Industry performed reasonably well during the fiscal year 2013-14 and continued the trend in the first two quarters of 2014-15 also. But, from the 3rd quarter of 2014-15, the industry went into tailspin due to a number of factors. One of the major causes was crash in the raw material prices globally by almost 50% and the Indian cotton prices were no exception. Spinning Mills, specially Export Oriented Mills like ours, who are obliged to carry several months requirement of raw cotton for quality reasons incurred substantial value losses on such inventories. The other important factor was significant changes in Chinese procurement policies and substantial reduction in Chinese import of cotton yarn. Consequently, yarn prices also fell significantly leading to lack of parity between cotton and cotton yarn prices. The cotton yarn exports from India into China also dropped by nearly 23%. These factors had a bearish effect on both demand and sales realization resulting in the mills carrying large unsold inventories and incurring losses. Moreover, the situation in respect of fine and superfine yarns which are our company's main product lines continues to suffer from both lack of demand and sales realization which is below the cost of production. Salaries & Wages continued to rise during the year besides hike in power cost, thereby rendering the cost of manufacturing prohibitive.

Your company's total revenues sharply came down to Rs.186.71 crores from Rs.286.74 crores in the previous year due to substantial reduction in exports of outsourced yarns for reasons mentioned above. The operating profit came down to Rs.10.99 crores from Rs.22.94 crores in the previous year. After meeting finance cost of Rs.10.89 crores, the profit before depreciation, amortization and tax expenses was at Rs.10 lacs only and net loss after provision of depreciation and deferred taxation at Rs.3.06 crores.

As regards performance of Aluva Unit in the current year, your Directors regret to inform that it continues to incur substantial losses. As already informed, ever rising high cost of salaries and wages as compared to industry norms has resulted in an unviable and untenable situation. To ensure survival of this unit, it is imperative that these costs are brought down to be at par with the industry.

CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION AND ANALYSIS AND OTHER INFORMATION REQUIRED UNDER THE COMPANIES ACT, 2013 AND LISTING AGREEMENT

As per Clause 49 of the Listing Agreement entered into with the Stock Exchanges, Corporate Governance Report with Auditors Certificate thereon and Management Discussion and Analysis are attached and form part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134 (5) of the Act, and based on the representations received from the management, the directors hereby confirm that :

i) In the preparation of the annual accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures;

ii) they 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 financial year and of the loss of the company for the financial year.

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) they have prepared the annual accounts on a going concern basis.

v) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, in accordance with the provisions of the Companies Act, 2013 and Company's Articles of Association, Shri Mahesh C Thakker retires by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment.

The Board recommends the same for your approval.

Smt. Pamela Anna Mathew has been inducted as an Additional Director effective from 17.03.2015 and hold office only up to the date of forthcoming Annual General Meeting of the company. Based on the recommendation of Nomination and Remuneration Committee, the Board recommends and seeks shareholders approval for appointment of Smt. Pamela Anna Mathew as an Independent Director for a period of 5 years.

Pursuant to the provisions of Section 203 of the Act, the appointment of Shri. B.K Patodia, Chairman and Managing Director,Shri. A.K. Warerkar Chief Financial Officer and Shri. E.K Balakrishnan, Company Secretary were formalized by the Board at its meeting held on 15.5.2014 as the Key Managerial Personnel of the Company.

AUDITORS AND SECRETARIAL AUDIT

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore, were appointed as Statutory Auditors of the Company from the conclusion of the 9th Annual General Meeting (AGM) of the Company held on 19th September, 2014 till the conclusion of the 12th Annual General Meeting to be held in the year 2017, subject to ratification of their appointment at every AGM

Further, pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Shri. MRL Narasimha, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The same is attached as Annexure I and forms an integral part of this Report

There are no disqualification, reservations or adverse remarks or disclaimers in the Auditors and Secretarial Auditors Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in the Annexure II forming part of this report

CORPORATE SOCIAL RESPONSIBILITY

Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company yet the company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

FAMILIRISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given to him, which interalia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, Clause 49 of the Listing Agreement and other relevant regulations and affirmation taken with respect to the same.

The Chairman along with the Management has also one to one discussion with the newly appointed Director to familiarize with the company's operations.

NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the Financial Year 2014-15, forms part of the Corporate Governance Report

INDEPENDENT DIRECTORS DECLARATION

The Non Executive Independent Directors fulfill the conditions of independence specified in Section 149 (6) of the Companies Act, 2013 and Rules made there under and meet with requirement of Clause 49 of the Listing Agreement entered into with the stock Exchanges. A formal letter of appointment to Independent Director as provided in Companies Act, 2013 and the Listing Agreement has been issued and disclosed on the website of the Company viz. www.gtntextiles.com

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

Details of loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism / whistle Blower policy for Directors and employees to report genuine concerns or grievances. The Whistle Blower policy has been posted on the website of the Company (www.gtntextiles.com).

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk mitigation system, which has consistently assessed and strengthened with standard operating procedure. Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

The Audit Committee of the Board of Directors, statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee

RISK MANAGEMENT

The Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. The Company is having a business risk management framework in place, which defines the risk management approach of the company and includes periodic review of such risks and mitigating controls and reporting mechanism of such risks.

NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a frame work in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members.

RELATED PARTY TRANSACTIONS

The transactions entered with related parties for the year under review were on arm's length basis and in the ordinary course of business. The disclosure under form AOC-2 for transactions with related party during the year under review is attached as Annexure III.

The Company has developed a Related Party Transactions framework for the purpose of identification and monitoring of such transaction.

A Statement giving details of Related party transactions are placed before the Audit Committee as also to the Board for review and approval on a quarterly basis.

DEPOSIT FROM PUBLIC

The Company has not accepted any deposits from public and as such no amount on account of principal or interest on deposit from public was outstanding as on the date of the Balance sheet

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 as per Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of Companies (Management & Administration) Rules, 2014 is annexed hereto as Annexure IV and forms part of this report.

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The information required pursuant to Section 134 (3) (q) of the Companies Act, 2013 read with Rule 5 (1) 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 in this regard

PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. There were no employees whose particulars are to be given in terms of Section 134(3)(q) of the companies Act,2013 read with Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerial personnel) Rules, 2014

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India, State Bank of India, Export-Import Bank of India, State Bank of Travancore, Bank of India and Axis Bank Limited and the concerned Departments of the State and Central Government, valuable customer, Employees and Shareholders for their assistance, support and co-operation to the Company.

For and on behalf of the Board

Place : Kochi, B.K PATODIA Date : 27.5.2015 Chairman


Mar 31, 2014

To the Members,

The Directors present the NINTH Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs in lacs)

PARTICULARS Year Ended Year Ended 31.03.2014 31.03.2013

REVENUE

Revenue from operations 28612 20939

Other income 62 35

Changes in Inventories (143) (168)

Total 28531 20806

EXPENSES

a) Cost of materials 19793 14071

b) Employee benefits expense 2443 2179

c) Other expenses 4001 3354

Total 26237 19604

OPERATING PROFIT 2294 1202

Finance Costs 1291 1072

PROFIT / (LOSS) BEFORE DEPRECIATION, 1003 130

AMORTISATION & TAX EXPENSES

Depreciation and Amortization Expenses 611 628

PROFIT/(LOSS) BEFORE TAX 392 (498)

Tax Expenses

a) Current Tax (MAT) 78 -

b) MAT Credit Entitlement (78) -

b) Deferred Tax Charge / (Credit) 197 (142)

PROFIT/(LOSS) AFTER TAX 195 (356)



DIVIDEND

In view of accumulated losses, your Directors regret their inability to recommend dividend for the financial year ended 31st March, 2014.

PERFORMANCE REVIEW

As mentioned in the last year''s Directors report there has been steady demand recovery in textile business from second half of FY 2012-13, both in international as well as domestic market. Accordingly, the year under review witnessed overall improvement in performance of your company, with sales, operating margin and cash profit reporting substantial increase. Exports of the Company showed handsome increase of 66% over previous year to Rs. 179 crores, significant part of which came from outsourced yarn business. Amongst various importing countries, demand from China was main factor leading to export led growth of the industry. However, of late, exports to China have been showing a declining trend for various reasons including uncertainty over cotton stocking policies of that country, which has direct impact on our export prices.

Total income during the year was substantially higher at Rs. 285.31 crores as against Rs. 208.06 crores of the previous year. While Operating profit increased to Rs. 22.94 crores from Rs. 12.02 crores, cash profit stood at Rs. 10.03 crores as compared to Rs. 1.30 crores. After charging depreciation of Rs. 6.11 crores, the profit before tax was at Rs. 3.92 crores as against a loss of Rs. 4.98 crores in previous year. After provision for deferred Tax of Rs. 1.97 crores, the Net profit was at Rs. 1.95 crores in comparison to previous year''s Net Loss of Rs. 3.56 crores.

As mentioned earlier, there are signs of slowdown in exports, besides pressure on domestic prices. Other areas of concern are continued high cost of salaries and wages as compared to Industry norms and ever rising cost of power in Kerala. Under the circumstances, your company will have to strive hard to maintain the current level of performance during current financial year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) appropriate accounting policies have been selected and applied them consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(d) The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE REPORT AND

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Your Directors affirm their commitments to the Corporate Governance Standards prescribed by the Securities and Exchange Board of India (SEBI).

A Report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached.

FIXED DEPOSITS

The company had no unclaimed deposits outstanding as at the close of the financial year.

DIRECTORS

Pursuant to Section 149 of the Companies Act, 2013, the Board at its meeting held on 30th July, 2014 recommended appointment of Shri. B. L. Singhal, Shri. Prem Malik, and Shri. S. Sundareshan as Independent Directors of the Company not liable to retire by rotation for a period of 5 years from the date of its 9th Annual General Meeting subject to approval of the members of the Company. These directors have given the declaration to the Board that they meet the criteria of Independence as provided under section 149 (6) of the said Act and also confirm that they will abide by the provisions as mentioned in Schedule IV of the Companies Act, 2013. The Board recommends the Resolutions for your approval for the above appointments.

Shri CD. Thakker, has resigned from the Board effective from 10.10.2013 due to personal reasons. He has served as Director of the Company for a very long period of 25 years, including erstwhile GTN Textiles Limited. The Board places on record its profound appreciation for his valuable contribution as a Director of the Company.

Shri Mahesh C Thakker has been inducted as an Additional Director effective from 31.10.2013. The Board recommends and seeks shareholders approval for appointment of Shri. Mahesh C Thakker, whose period of office is liable to determination by retirement of Directors by rotation.

Shri N.K. Bafna and Shri R. Rajagopalan, Directors have resigned from the Board effective from 31.7.2014 for personal reasons.

Shri N.K. Bafna has joined the Board of the Company effective from 15.5.2008 and was member of "Audit Committee", "Stakeholders Relationship Committee" and "Nomination and Remuneration Committee" of the Board of Directors.

Shri R. Rajagopalan, has joined the Board of the Company effective from 31.7.2002 (erstwhile GTN Textiles Limited). He was Chairman of "Stakeholders Relationship Committee" and member of "Audit Committee and "Nomination and Remuneration Committee" of the Board of Directors".

The Board places on record its profound appreciation to Shri N.K. Bafna and Shri R. Rajagopalan for their valuable contributions as Independent Directors.

AUDITORS

M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore, who are the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for reappointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. MS Jagannathan & Visvanathan, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the 12th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. There were no employees whose particulars are to be given in terms of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 dated 31st March, 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in Annexure, attached hereto and forms part of this report.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India, State Bank of India, Export-Import Bank of India, State Bank of Travancore, Bank of India and Axis Bank Limited and the concerned Departments of the State and Central Government, Valuable customers Employees and Shareholders for their assistance, support and co-operation to the Company.

For and on behalf of the Board

Place : Kochi, B. K. PATODIA Date : 30th July, 2014 Chairman


Mar 31, 2013

To the Members,

The Directors present the EIGHTH Annual Report together with the Audited Statements of Account for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs in lacs)

PARTICULARS Year Ended Year Ended 31.03.2013 31.03.2012

REVENUE Revenue from operations 20939 14012

Other income 35 39

Changes in Inventories (168) 1014

Total 20806 15065

EXPENSES

a) Cost of materials 14071 9409

b) Employee benefits expense 2179 2054

c) Other expenses 3354 2668

Total 19604 14131

OPERATING PROFIT 1202 934

Finance Costs 1072 951

PROFIT / (LOSS) BEFORE DEPRECIATION, 130 (17) AMORTISATION & TAX EXPENSES

Depreciation and Amortization Expenses 628 632

PROFIT/(LOSS) BEFORE TAX (498) (649) Tax Expenses

a) Current Tax (MAT)

b) Deferred Tax (142) (206)

PROFIT/(LOSS) AFTER TAX (356) (443)

DIVIDEND

As explained in detail under Performance Review, your Company has incurred loss for the year under review, and hence the Board is unable to recommend a Dividend.

PERFORMANCE REVIEW

Last five years beginning from 2008-09 have been the most challenging period in the history of Indian Textile Industry, which faced multiplicity of adverse factors. Barring the year 2010-11 which reported exceptional recovery, rest of the period was mired in adversities arising from global meltdown, continued slowdown in advanced economies and weakening economic growth in India as well as other developing countries. Business related and political factors also took heavy toll on recovery of the textile industry which witnessed severe power constraints, rising interest rates, wide currency fluctuations, besides considerable mismatch in input/output costs resulting from faulty Government Polices relating to export of cotton and cotton yarn.

The first half of the financial year 2012-13 continued to be

affected from some of the above adverse factors, but from the second half of the financial year there was distinct improvement. The Government had announced series of policy measures which included un-hindered export of cotton yarn, continuation of Textile Upgradation Fund Scheme and announcement of Foreign Trade Policy which had many positive features for the textile industry including incentive for incremental exports. Simultaneously demand for cotton yarn has also improved significantly. China became one of the major importers of cotton yarn from India.

The cotton crop at 34 Million bales was also satisfactory to take care of indigenous consumption and yet leave a sizable exportable surplus. The prices of raw cotton which in the beginning of the crop were lower have since settled down at reasonable levels. During the period under review, 8400 spindles were converted to compact technology, thereby taking the compact capacity to 34,896 spindles out of total capacity of 58,864 spindles.

In the year under review, your Company continued its thrust by undertaking outsourced yarn exports to improve both the top line and the margins. This resulted in the total revenue of the Company going upto Rs.209 crores as against Rs.140 crores in the previous year. In spite of increase in power tariff by 30% which resulted in higher power cost of Rs.364 lacs, the Company could report a cash profit of Rs.130 lacs against cash loss of Rs.17 lacs in the previous year. The operating profit went upto Rs.1202 lacs from Rs.934 lacs. At net level, after charging depreciation of Rs.628 lacs, there is a loss of Rs.498 lacs as against loss of Rs.649 lacs in the previous year.

Your Company is hopeful of maintaining the tempo of growth and achieve better results in the current financial year. The areas of concern are continued high cost of salaries & wages as compared to industry norms and ever rising cost of power in Kerala.

PLEDGING OF SHARES

During the year under review, Patspin India Limited (PIL), has gone for a Corporate Debt Restructuring proposal under the CDR system. Your Company is the main promoter of PIL. The scheme has been approved by CDR-EG, Mumbai and as per the approved scheme, your company has to pledge 51% of its holdings in PIL, being 72,86,405 Equity Shares of Rs 10 each , in favour of PIL lenders. Accordingly, your Company has created pledge on 14.05.2013 with the Monitoring Institution (MI) of the CDR Scheme, viz. Central Bank of India.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) appropriate accounting policies have been selected and applied them consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the loss of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(d) the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Your Directors affirm their commitments to the Corporate Governance standards prescribed by the Securities and Exchange Board of India (SEBI).

A Report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached.

FIXED DEPOSITS

The Company had no unclaimed deposits outstanding as at the close of the financial year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Shri C.D Thakker and Shri N.K Bafna, Directors, retire from Office by rotation and are eligible for re-appointment.

STATUTORY AUDITORS

M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore, Auditors of the Company will retire at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. There were no employees whose particulars are to be given in terms of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 dated 31st March, 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in Annexure, attached hereto and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India , State Bank of India, State Bank of Travancore, Bank of India , Axis Bank Limited and Export-Import Bank of India and the concerned Departments of the State and Central Government, valuable Customers, Employees and Shareholders for their assistance, support and co-operation to the Company. For and on behalf of the Board

Place : Kochi, B.K PATODIA

Date : 30th May, 2013 Chairman


Mar 31, 2010

The Directors present the FIFTH Annual Report together with the Audited Statements of Account for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in lacs)

Year ended Year ended 31.3.2010 31.3.2009

INCOME

Net sales / Income from operations 12305 9819

Other operating income (Insurance Claim) 192 -

Other income 9 4

Variation in Stock (987) 283

Total 11519 10106

EXPENDITURE

a) Cost of materials 6411 5452

b) Staff Cost 1483 1381

c) Power Cost 1131 1092

d) Other expenditure 1379 2098

Total 10404 10023

OPERATING PROFIT 1115 83

Interest 758 743

Proft before depreciation and taxation 357 (660)

Depreciation 678 686

PROFIT BEFORE TAX (321) (1346)

Provision for current tax - -

Provision for deferred tax (103) (327)

Provision for Fringe beneft tax - 15

PROFIT AFTER TAX (218) (1034)

Balance brought forward from previous - 387

year

Transfer from General Reserve 218 647

Proft /loss available for appropriations - -

DIVIDEND

As explained in detail under Performance Review, your company has incurred loss for the year under review, and hence the Board is unable to recommend a Dividend.

PERFORMANCE REVIEW

The adverse effect of the global fnancial crisis, which impacted most of the advanced economies of the world, spilled over in the year under review. As such, the operational performance

of your company continued to be affected during the frst half of the year. However, from the third quarter there was a revival in demand for textile products, leading to slow but defnite improvement in capacity utilization and fnancial performance of your company, in the second half of the year. As a result, the turnover has substantially increased to Rs.123.05 crores as compared to Rs.98.19 crores of the previous year. Consequently, there has been a total turnaround from a meager operating proft of Rs.0.83 crores to Rs.11.15 crores in the year under review. However, due to the adverse working of the company during frst half of the year as mentioned earlier, the year under review still ended with substantially lower loss at Rs.3.21 crores as against Rs.13.46 crores in the earlier year.

In the current fnancial year 2010-11, besides recovery in global economic environment, domestic demand for textile products has been very strong giving the much needed positive thrust to the textile industry.

From 1st April 2010, Kerala State Electricity Board has put certain restrictions on power consumption and also levied fuel surcharge, which has led to increase in power cost. Besides, the government has done away with certain incentives available to Textile Industry i.e. 7.67% DEPB, 4% Duty Draw Back and 2% interest subvention. Inspite of above, due to improved market conditions and higher sales realization, your company is hopeful of showing better performance in the year 2010-11 as well.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors confrm that:- (a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) they 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 your Company at the end of the fnancial year and of the proft of the Company for that period;

(c) they have taken proper and suffcient care, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(d) they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Directors affrm their commitments to the Corporate Governance standards prescribed by the Securities and Exchange Board of India (SEBI). A Report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached.

FIXED DEPOSITS

The Company had no unclaimed deposits outstanding as at the close of the fnancial year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Companys Articles of Association, Shri R Rajagopalan and Shri C.D Thakker , Directors, retire from Offce by rotation and are eligible for re-appointment.

AUDITORS

M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore, Auditors of the Company will retire at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. A statement showing the particulars of Employees referred to in sub section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is given in Annexure I, forming Part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in Annexure II, attached hereto and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India , State Bank of India, State Bank of Travancore, Bank of India , Axis Bank Limited, Export-Import Bank of India and IDBI Bank Limited and the concerned Departments of the State and Central Government, valuable Customers, Employees and Shareholders for their assistance, support and co-operation to the Company.

For and on behalf of the Board

B K PATODIA

Chairman

Place : Kochi,

Date : 13th May, 2010

 
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