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Directors Report of Sri Nachammai Cotton Mills Ltd.

Jun 30, 2014

Dear Members,

The Directors are hereby presenting this 34th Annual Report together with the Audited Statement of Accounts for the Year ended 30th June,2014.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below:

Particulars 30.06.2014 30.06.2013

Profit before Interest and Depreciation 13,75,26,303 13,98,33,855

Interest -6,19,13,960 -6,49,39,149

Depreciation -3,98,42,234 -3,94,27,398

Profit before tax 3,57,70,109 3,54,67,308

Tax expense:

Deferred Tax (Liability) / Asset -90,10,145 -2,99,823

Excess income tax provision reversed - 2,69,152

Income tax paid for prior year -6,68,501 -

Profit transferred to Balance Sheet 2,60,91,463 3,54,36,637

Dividend : Due to inadequacy of Profit, the Company is unable to declare any Dividend for the year 2013-14.

REVIEW OF OPERATIONS

The Company turned around during the current year with a Net Profit before tax being Rs. 357.70 lakhs as compared to Net Profit before tax being Rs. 354.67 lakhs during the year 2012-13.

During the current year, the company is expected to improve its performance.

FIXED DEPOSITS : Your Company has not accepted any fixed deposit from public, after 01.04.2014, in accordance with the New Companies Act, 2013.

NEW COMPANIES ACT, 2013

The Ministry of Corporate Affairs has replaced the erstwhile Companies Act, 1956, with the new Companies Act, 2013.

DIRECTORS : As per Section 149 and other applicable provisions of the Companies Act, 2013 and Clause 49 (ii) of the Listing Agreement, appointment of Independent Directors is required.

The Companies Act, 2013 ("the Act") provides for appointment of Independent Directors. Sub-section (10) of Section 149 of the Act (effective from April 1st, 2014) provides that an Independent Director shall hold office for a term up to five (5) consecutive years on the Board of the Company.

The tenure of office of Shri P.Palaniappan, Chairman cum Managing Director and Smt. PUmayal, Joint Managing Director expires on 18th December, 2014. The Board of Directors, at their meeting held on 21st August, 2014, re-appointed them as Chairman cum Managing Director and Joint Managing Director of the Company respectively for a period of five (5) consecutive years effective from 19.12.2014 to 18.12.2019. Their appointment and remuneration are being placed before you at the ensuing Annual General Meeting for your consideration and approval.

Smt. RM. Umaiyal, Director is liable to retire by rotation and is eligible for re-appointment. Smt. Vasantha, was appointed as an Additional Director of the Company with effect from 21.08.2014.

A brief resume, expertise, shareholding in the company and details of other entities in which the Directors are interested as stipulated under Clause 49 of the Listing Agreement entered with the Stock Exchange, form part of the Notice of the ensuing Annual General Meeting.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors as required by the Companies Act.

DIRECTORS RESPONSIBILITY STSTEMENT

As per Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts for the year ended 30.06.2014:

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors 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 for the financial year ended 30.06.2014 and of the PROFIT 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 provisions 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 for the year ended 30.06.2014 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreement with Stock Exchange are annexed as part of the Annual Report.

LISTING

The Equity Shares of the Company are listed in Mumbai Stock Exchange and the Company has duly paid the Annual listing fees for the year 2014-15.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), for holding Shares in Electronic mode (De-mat) of our Shareholders and is also the Registrar for Share Transfer Services for physical segment.

AUDITORS

M/s. M.S. Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

PARTICULARS OF EMPLOYEES

In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs. 60 lakhs or more per annum and Rs.5 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988, a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, and all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

Selam By Order of the Board, 21st August, 2014 P.Palaniappan, Chairman cum Managing Director,


Jun 30, 2013

The Director are Hereby presenting 33rd Annual Report together with Audit Statent of Account For the Year anded 31th june 2013

FINANCIAL RESULTS FOR THE YEAR

The Financeal resuts the year under review are funsihed below

Fartlcutars 30.06.2013 30.06.2012

Interst 13.98.33.855 1.47.88.586

Depreoanon

before tax

Tax expense: 15,975

Excess incogs Tax vision reversed

Profit transferred to Balance Sheet

Dividend Rrofil the Company is unable to declare any tor be year 2012-13.

a Thece was a sustained demand Eor cotton yam during the last year. b Increase In capacity utiiizaUon due fa reduction o

b. Timely coverage of good cotton at

During he company is expend to Improve its perfe measures and improved

FIXED DEPOSITS: No Fixed Deposit remained unclaimed as on 30.05.2013.

DIRECTORSRESPONSIBIUTYSTATEMENT

per Httrrtd Section 21W of tfe Compel Act, U& Ihs BOffd of preparation of Annual Accounts for the year ended 30.05.2013,'' oilier irregularities, have prepared the A,oual Aaaunts for antfal 30.08.2013 on a QBnfl concern basis.

CORPORATEGOVERNANCE

Reports on Management Discussion and Analysis and Caspar ate Co vernanoe along wiih a certificate horn ihe auditor of the Company regaling compliance in accordance with Clause-49 of (be Listing Agreement with Slock Exchange arc annexed as pari of the Annua! Report.

LISTING

The Equity Sh fines of (he Company sre listed in M umbai Stecf^ Exchange an d 1 ha Company has du ly paid |ho Annual tisflng fees for Ihe year 201344.

Mfo Cameo Corporate Services Limited, Chennai is Ihe Regislrar for providing depositary services Ihrotjgh National Securities Depository Limited (MSD L} and Central Depository Services (I ndia} Limited (C DSL) for holding Shares in Electronic mode (De< ma t) by 0ur Shareholders and also Registrar for Share Transfer Services for physical segmenl,

AUDITORS

Auditors rellreai the ensuing Annual General Meolingand lliey are eligible for re-appoinlnieiil. costajditors

The Board of Director has reappointed Shri V. Balasubramanian, CoeE Accountants, Coimbatore as (li e Cost Auditors of the Company u nder Section 233B of the Companies Ad, 1556, for the year 2013-14. The Cost Audilors Report for the year ended 30* June, 2012. (he due dato of ftl Inrj the Cos! Audit Report was 31" Ja nua ry, 2013, and the actual dale of f iting (he cost audit report was 31.01.2013,

PARTICULARS OF EMPLOYEES

In accordance with Section 217{2A) of the Companies Act, 1955, read wffh Companies (Particulars of Employees) Rutos 1375, as amended, there are no employees who are in receipt of remuneration of Rs.SO lakhs or more per annum and Rs,5 lakhs or more perrnonlh.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREfGN EXCHANGE EARNINGS AND OUTGO

in aorordonce wiih Ihe Com panics {Disclosure of particulars in Ihe Report of the Board of Directors) Rules 19&) a Statement showing details of Conservation of Energy, Tech notagv absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record ihefr deep sense of appreciation for the tromsidous suppori from (he Bankers Mfe. Indian '' Ovemeas Benk, thfr shareholders, doposllors, all our suppliers and cuslDrnors. The Board also wishes (o place on record lliolr appreciation tho conlribu lion m ade by the employees at all levels.

For and on behalf of the Board of Directors Salem PPALARJIAPPAN

22nd Augusl, 2013 Chairman cum Managing Director


Jun 30, 2012

TO THE SHAREHOLDERS

The Directors are hereby presenting this 32nd Annual Report together with the Audited Statement of Accounts for the Year ended 30th June, 2012.

FINANCIAL RESULTS FOR THE YEAR

The financial results for Hie year under review are furnished betow:



Particulars 30.06.2812 30.06.2011

Profit before Interest and Depreciation 1,80,50,726 7,90,21,945

Interest (8,69,59,551) (7.18,26,960)

Depreciation (3,71,54,977) (3,17,66,492)

Loss before tax (10,60,63,802) (2,45,71,507)

Tax expense:

Current Tax (MAT) - 51,94,388

MAT credit entitlement - (51,94,388)

Deferred Tax (Liability)/Asset 2,86,15,975 (89,69,095)

Excess income tax provision reversed - 9,64,088

Loss transferred to Balance Sheet (7,74,47,827) 3,25,76,514



Dividend: Due to inadequacy of Profit, the Company is unable to declare any Dividend for the year 2011-12

REVIEW OF OPERATIONS

The disparity between the cotton prices and yarn prices prevailed for most part of the year leading to huge losses in the year under review. With the RBI continuing its policy of increasing interest rates, there was a sharp increase in financing costs. Energy costs continued to remain high in view of the critical power situation ftat prevailed trough the financial year. Salaries and wages continued to escalate in line with increased demand for human capital and increases in tfie cost of Swig. AM these factors added to the pressure on the bottom line. Hence resulting in a loss of Rs. 774.48 lakhs.

FIXED DEPOSITS: No Fixed Deposit remained unclaimed as on 30.06.2012.

DIRECTORS

The Directors Shri S. Ravichandran and Shri PL. Subbiah retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement is attached.

Shri Amarthlal A. Gandhi, tendered his resignation from directorship due to his ill health on 15.102011.

The Board expresses its appreciation for the services rendered by Shri Amarthlal A. Gandhi during his tenure as director towards the growth of the Company.

The Particulars of the Directors proposed to be appointed or re-appointed are given in the Report on Corporate Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per amended Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts forthe year ended 30.06.2012

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors 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 atthe end of the financial year ended 30.06.2012and of the 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 provisions 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 for the year ended 30.06.2012 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2012-2013, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also RegistrarforShareTransferServicesforphysical segment.

EROSION OF NET WORTHS THE REASON FOR THE EROSION

The year 2011-12 was a very tough year for the textile industry. Our Company was also affected and it resulted in 50% erosion of peak net worth Of the Company calculated in accordance with Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985. The reasons for erosion are as follows.

a. The disparity between cotton prices and yam prices prevailed during the year under review which led to losses.

b. The demand for yarn had dropped significantly due to slowdown in the US, the economic crisis in Europe and uncertain domestic and world economic scenario.'

c. The power situation had deteriorated in Tamil Nadu. There were 12 hours power shedding, 2 days power holidays per week and 40% demand cut for HTIine industries. Hence, energy costs perkg of yam had gone up significantly.

d. The financing costs had gone up significantly because of RBI poiicyon bankrates.

STEPS TAKEN FOR IMPROVEMENT:

The Promoters converted their Unsecured loans amounting to Rs. 15 Crores into Preference Shares Capital by issuing 10% Cumulative Redeemable Preference Shares to improve the Net worth of the Company.

The Cotton prices have since stabilized and the yarn markets are also significantly improving. This will help the Company to fetch better prices.

Further, due to reduction in unsecured loans the finance costs will also come down.

REPORTING TOWFR:

Due to erosion of 50% of peak net worth during the immediately preceding four financial years, calculated in accordance with Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985, the Company has to report such erosion to the Board for Industrial and Financial Reconstruction and the Company will take steps to report the same within the time stipulated.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

COST AUDITORS: The Board of Directors has re-appointed Shri V. Balasubramanian, Cost Accountant, Coimbatore as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for the year 2012-13. The Cost Auditors Report for the year ended 30" June, 2011, the due date of filing the Cost Audit Report was 31" December, 2011, and the actual date of filing the cost audit report was 24.12.2011.

PARTICULARS OF EMPLOYEES : In accordance with Section 217(2A-of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs.60 lakhs or more peranrtum and Rs.5 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN

EXCHANGECARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas -Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors,

Salem, P.PALANIAPPAN,

23rd August, 2012. Chairman cum Managing Director.


Jun 30, 2010

The Directors are hereby presenting this 30th Annual Report together with the Audited Statement of Accounts for the Year ended 30th June, 2010.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below: 30.06.2010 30.06.2009

Rs. Rs.

OPERATING PROFIT BEFORE INTEREST 13,04,06,733 2,09,51,772 AND DEPRECIATION

Less: Interest 4,65,89,107 4,33,68,567

Depreciation 2,16,74,134 1,98,31,057

6,82,63,241 6,31,99,624

PROFIT/(LOSS) BEFORE TAX 6,21,43,492 (4,22,47,852)

Less: Deferred Tax (Liability) / Asset (1,05,15,176) 1,55,06,507

Fringe Benefit Tax for prior year -- (54,219)

PROFIT/(LOSS) AFTER TAX 5,16,28,316 (2,67,95,564)

lncrease/(Provision for Diminution) in Value of investments 3,13,500 (2,64,248)

Less/(Add) Loss Brought forward (5,81,68,245) (39,108,433)

Less: Transfer from General Reserve -- 8,000,000

Balance of Loss Carried Forward (62,26,429) (5,81,68,245)

Dividend: Due to inadequacy of Profit, the Company is unable to recommend any Dividend for this year 2009-10 and the situation is expected to improve in the current year,

REVIEW OF OPERATIONS

The Company turned around during the current year with Net profit before tax being Rs. 621.43 lakhs as compared to Net loss before tax being Rs. 422.48 lakhs during the year2008-09,The profit during the year was onaccount of the following factors,

a. There was a sustained demand for cotton yarn during the last year at higher price levels world wide.

b. Increase in capacity utilisation due to reduction of power cut.

c. Timely coverage of good cotton at lower prices.

d. Additional spindleage in our Aunit from 27840 to 33600 spindles.

During the current year, the company is expected to improve its performance by enhanced production with a reduction in power cut from 30 % to 20%, energy conservation measures, improved yarn prices and positive signs of revival of the current world economy, coupled with the full utilization of additional spindleage.

FIXED DEPOSITS : As on 30.06.2010, three deposits amounting to Rs.33,000/- remaining unclaimed on the due dates and since paid.

DIRECTORS

The Directors Sri. Perumal Madhavagopal and Sri A.AIagappan retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.The details as required under Clause 49 of the Listing Agreements attached.

Sri.A. Annamalai was appointed as Whole Time Director with effect from 01,09.2010.

Sri. S. Ravichandran and Sri. PL. Subbiah were appointed as Additional Directors with effect from 27.08.2010.

The Particulars of the Directors proposed to be appointed or re-appointed are given in the Report on Corporate

Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

As per amended section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of

Annual Accounts for the year ended 30.06.2010

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors 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 financial year ended 30.06.2010 and of the Profit 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 provisions 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 for the year ended 30.06.2010 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2010-2011, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also Registrator Share Transfer Services for physical segment.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

PARTICULARS OF EMPLOYEES: In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs. 24 lakhs or more per annum and Rs.2 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption. Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors Salem, R PALANIAPPAN

27th August, 2010. Chairman cum Managing Director




Jun 30, 2009

The Directors are hereby presenting this 29 Annual Report together with the Audited Statement of Accounts for the Year ended 30th June,2009.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below:

30.06.2009 30.06.2008 Rs. Rs.

OPERATING PROFIT BEFORE INTEREST 2,20,65,805 3,86,01,660 AND DEPRECIATION

Less: Interest 4,33,68,567 4,55,95,760

GROSS LOSS 2,13,02,762 69,94,100

Add: Depreciation 1,98,31,057 1,98,82,215

LOSS BEFORE TAX (4,11,33,819) (2,68,76,315)

Deferred Tax Asset/(Liability) 1,55,06,507 1,21,00,672

Fringe Benefit Tax (38,299) (59,671)

Fringe Benefit Tax for prior year (15,920) (5,350)

Excess Income Tax provision reversed -- 1,06,000

LOSS AFTER TAX (2,56,81,531) (1,47,34,664)

Bonus and Exgratia for Prior year (11,14,033) (13,81,380)

Dimunition in value of investments (2,64,248) (49,252)

Deficit transferred to Balance Sheet (2,70,59,812) (1,61,65,296)

REVIEW OF OPERATIONS

During the year under review, the turnover of the Company decreased by 3.70%. Gross Loss before depreciation increased from Rs 69.94 lakhs to Rs.213.02 lakhs. The loss was on account of the following factors.

? Shortage of power and erratic power supply in Tamilnadu resulting in under utilisation of the plant and also higher costs due to usage of captive power plants.

? Lower price realisation and slow movement of yarn due to global meltdown.

? Higher raw material input costs due to minimum support price of cotton being enhanced by 40% during the year and also higher price of imported cotton due to appreciation of dollar versus the rupee.

During the current year, the company is expected to improve its performance by enhanced production with a reduction in power cut from 40 % to 20%, energy conservation measures, improved yarn prices and positive signs of revival of the current world economy.

FIXED DEPOSITS : As on 30.06.2009, one deposit amounting to Rs. 3,000/- remaining unclaimed on the due dates and close follow up is being made to obtain instruction from the depositor.

DIRECTORS

The Directors Smt. RM. Umaiyal and Shri. A. Annamalai retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement is attached. The Particulars of the Director proposed to be appointed or re-appointed are given in the Report on Corporate Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per amended section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts for the year ended 30.06.2009

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors 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 financial year ended 30.06.2009 and of the 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 provisions 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 for the year ended 30.06.2009 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2009-2010, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s.Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also Registrarfor Share Transfer Services for physical segment.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligiblefor reappointment.

PARTICULARS OF EMPLOYEES : In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs.24 lakhs or more per annum and Rs.2 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors, Salem, P. PALANIAPPAN

24th August, 2009 Chairman cum Managing Director

 
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