Directors Report of Tejassvi Aaharam Ltd.

Mar 31, 2014

DEAR MEMBERS,

The Directors have pleasure In presenting the Twentieth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2014.

1. OPERATING RESULTS: (Rs. In lakhs) Current Year Previous Year 31.03.2014 31.03.2013

Other Income 1.11 2190.00 1.11 2190.00

Total Expenditure 13.86 35.51

interest 241.04 178.32

Gross Profit/(Loss) after Interest but Before Depreciation and (253.79) 1976.17 Taxation

Depreciation 13.24 54.78

Net Profit/(Loss) (267.03) 1921.39

The Directors report that the Net Loss of the Company for the year under report is Rs,267.03 lakhs as against Net Proflt of Rs. 1921.39 Lakhs of previous year. Your Directors report that the Milt is not functioning with effect from 23.10.2007.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

The Board of Directors consists of both Executive and Non-executive/lndependent Directors who have vide and varied experience in different disciplines of Corporate functioning.

Pursuant to the provisions Section 149 and 152 of Companies Act, 2013 Mr.R. Vijay kumar and MrK.AIagirisamy proposed to be re-appointed as Independent Directors of the Company at the ensuing Annual General Meeting.

A brief resume, expertise, shareholding in the Company and details of other Directorship of these Directors as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange forms part of the Notice of ensuing Annual General Meeting. ''

4. DIRECTORS'' RESPONSIBILITY STATEMENT-

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

5 INDEPENDENT AUDITOR''S OBSERVATION ON ACCOUNTS:

In respect of observation made by Auditors Under Opinion (i), (ii) & (iii) of Independent Auditors Report, which are self-explanatory and require no further explanation.

6. PUBLIC DEPOSITS:

The Company does not have any Public deposit as at 31st March, 2014

7 MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. REPORT ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE:

In terms of the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal)Act 2013, which came Into force with effect from .23,04.2013, your Directors Report that forming an Internal Compliance Committee, will not arise, since the company is not having any women employee.

9. AUDITORS:

The Company s Auditors M/s. D. Sampathkumar & Co., Chartered Accountants, Chennai, are retiring at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act 1956, there are no employee who are drawing a remuneration of Rs.60,00,000/- or more per annum or Rs.5,00,000/- or more per month during the year ended 31st March, 2014,

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988;

A. CONSERVATION OF ENERGY: Not applicable.

B. TECHNOLOGY ABSORPTION: Not Applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, and the Share holders for their continued co-operation

On behalf of the Board of Directors For STERLING SPINNERS LTD.

Place : Chennai. (K.S.VENUGOPALA) Date : 27.08.2014 CHAIRMAN CUM MANAGING DIRECTOR

D. SAM PATH KUMAR & CO. Phone: [phone] CHARTERED ACCOUNTANTS Now No. 5, South Boag Road, T. Nagar, Chennai-600 017

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Mar 31, 2013

The Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2013.

1. OPERATING RESULTS :

(Rs. in lakhs) Current Year Previous Year 31.03.2013 31.03.2012

Other Income 2190.00 2.12

2190.00 2.12

Total Expenditure 35.51 31.61

Interest 178.32 7.81

Gross Profit/(Loss) after Interest but

Before Depreciation and Taxation 1976.17 37.30

Depreciation 54.78 75.66

Net Profit / (Loss) 1921.39 (112.96)

Your Directors report that the Net Profit of the Company for the year under report is Rs.1921.39 lakhs after taking into account of interest waiver by M/s SIPCOT of Rs. 2152.50 Lakhs as against Net loss of Rs. 112.96 Lakhs of previous year. Your Directors report that the Mill is not functioning with effect from 23.10.2007

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review"*

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Sri. R.Vijaykumar, Director will retire by rotation and being eligible offers himself for re-appointment.

4. INDEPENDENT AUDITOR''S OBSERVATION ON ACCOUNTS:

i) In respect of observation made by Auditors Under Opinion (i),(ii) & (iil) of Independent Auditors Report, which are self-explanatory and require no further explanation.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R.Vijaykumar, Director, Sri.K.AIagiriswami, Director and Sri.K.S.Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. SHAREHOLDERS / INVESTORS'' GRIEVANCES COMMITTEE:

The Shareholders / Investors'' Grievances Committee was constituted with Mr.K.AIagiriswami as Chairman, Mr.R.Vijaykumar as Member and Mr.K.S.Venugopala as Member and Compliance Officer.

The scope of the Committee is to look into the Shareholders/Investors'' Complaints / Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines / scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review-on 17th July, 2012 and 21st January, 2013 to review the status of complaints from the Shareholders / Investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2012-2013.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for transfer/transmission

Non-receipt of Balance Sheet

Others

Total Nil

The above shows that complaints received were ''Nil'' and Pending Complaints were ''Nil''.

Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE.

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. REPORT ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE:

In terms of the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 which come into force with effect from 23.04.2013, your Directors Report that forming an Internal Compliance Committee will not arise, since the company is not having any Women employees.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 profit of the Company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

10. AUDITORS:

M/s. D. Sampathkumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

11. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, no employee was in receipt of remuneration of Rs.60,00,000/- per annum during the year ended 31st March, 2013.

12. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY: Not applicable.

B. TECHNOLOGY ABSORPTION: Not Applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

13. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, Suppliers, Deale/s and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors

For STERLING SPINNERS LTD.,

Place : Chennai K.S. VENUGOPALA

Date : 23.08.2013 Chairman-cum-Managing Director

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Mar 31, 2012

The Directors have pleasure in presenting the Eighteenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2012.

1. OPERATING RESULTS:

(Rs. in lakhs) Current Year Previous Year 31.03.2012 31.03.2011

Other Income 2.12 99.54

2.12 99.54

Total Expenditure 31.61 8.43

Interest 7.81 514.62 Gross Profit/Loss) after Interest but

Before Depreciation and Taxation 37.30 (423.51)

Depreciation 75.66 75.66

Net Profit/(Loss) (112.96) (499.17)

Your Directors report that the Net Loss of the Company for the year under report is Rs. 112,96 lakhs as against Net Loss of Rs. 499,17 Lakhs of previous year Your Directors report that the Mill is not functioning with effect from 03.11.2007 due to disconnection of power supply by TNEB.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Sri. K. AIagiriswamy, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITOR''S OBSERVATION ON ACCOUNTS:

i) In respect of observation made by Auditors Under Clause 4 (a) (i) and (ii)) of Auditors Report, which are self-explanatory and require no further explanation.

ii) In respect of qualification made by the Auditors'' Under Clause 4 (a) (iii), the Company will take steps to obtain remaining confirmation letters for balance Short Term Loans and Advances and Trade Payables.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri. R. Vijaykumar, Director, Sri. K. AIagiriswami, Director and Sri. K. S. Venugopala, Chairman-cum-Managing Director with Sri. R. Vijaykumar as its, Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri. R. Vijaykumar, Director, Sri. K. AIagiriswami, Director and Sri. K. S. Venugopala, Chairman-cum-Managing Director with Sri. R. Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. SHAREHOLDERS/INVESTORS'' GRIEVANCES COMMITTEE:

The Shareholders/Investors'' Grievances Committee was constituted with Mr. K. AIagiriswami as Chairman, Mr. R. Vijaykumar as Member and Mr. K. S. Venugopala as Member and Compliance Officer.

The scope of the Committee is to look into the Shareholders/Investors'' Complaints/Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines/scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review- on 16th July, 2011 and 22nd January, 2012 to review the status of complaints from the Shareholders/Investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2011-2012.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for - transfer/transmission

Non-receipt of Balance Sheet -

Others -

Total Nil

The above shows that complaints received were ''Nil'' and Pending Complaints were ''Nil''. Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS'' RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare;

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS:

M/s. D. Sampathkumar & Co. Chartered Accountants will retire as Auditor at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, no employee was in receipt of remuneration of Rs. 60,00,000/- per annum during the year ended 31st March, 2012.

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY: Not applicable.

B. TECHNOLOGY ABSORPTION: Not Applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD.,

K.S. VENUGOPALA Chairman-cum-Managing Director

Place : Chennai Date : 22.08.2012

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Seventeenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2011.

1. OPERATING RESULTS:

Current Year Previous Year (Rs. in lakhs)

Other Income 99.54 84.96

99.54 84.96

Total Expenditure 8.43 6.97

Interest 514.62 471.75 Gross Profit/(Loss) after Interest but Before Depreciation and Taxation (423.51) (393.76)

Depreciation 75.66 35.66

Income Tax for Earlier year written off - -

Net Profit / (Loss) (499.17) (469.42)

Your Directors report that the Net Loss of the company for the year under report is Rs.499.17 lakhs as against Net Loss of Rs.469.42 Lakhs of previous year. Your Directors report that the Mill is not functioning with effect from 03.11.2007 due to disconnection of power supply by TNEB.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the company''s Articles of Association, Sri. R.Vijaykumar, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS'' OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditor''s Report, the Company''s has made a reference before BIFR on 28.05.2001 and the company has been declared as Sick Industrial Company by the BIFR on 06.05.2003. However the proceedings before BIFR were abated as per the order of BIFR on 22.4.2010 and the company has filed on appeal against the above said order of BIFR on 15.09.2010 with AAIFR which is pending.

(ii) In respect of qualification made by the Auditors under Clause 4 (a) (ii) the company will take steps to obtain remaining confirmation letters for balances of Loans and Advances, Sundry Debtors and Sundry Creditors.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R.Vijaykumar, Director, Sri.K.AIagiriswami, Director and Sri.K.S.Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. SHAREHOLDERS / INVESTORS'' GRIEVANCES COMMITTEE:

The Shareholders / Investors'' Grievances Committee was constituted with Mr.K.AIagiriswami as Chairman, Mr.R.Vijaykumar as Member and Mr.K.S.Venugopala as Member and Compliance Officer.

The scope of the Committee is to look into the Shareholders/Investors'' Complaints / Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines / scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review - on 18th July, 2010 and 20th January, 2011 to review the status of complaints from the Shareholders / Investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2010-2011.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for transfer/transmission -

Non-receipt of Balance Sheet -

Others -

Total Nil

The above shows that complaints received were ''Nil'' and Pending Complaints were ''Nil''. Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS'' RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS:

M/s. D. Sampathkumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, no employee was in receipt of remuneration of Rs.60,00,000/- per annum during the year ended 31st March, 2011.

11. INFORMATION AS PER SECTION 217 C\) fe) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988: .

A CONSERVATION OF ENERGY: Not applicable

B. TECHNOLOGY ABSORPTION: Not Applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors

For STERLING SPINNERS LTD.,

Place : Chennai K.S. VENUGOPALA

Date : 22.08.2011 Chairman-cum-Managing Director

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Mar 31, 2010

The Directors have pleasure in presenting the Sixteenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2010.

1. OPERATING RESULTS:

Current Year Previous Year

(Rs. in lakhs)

Other Income 84.96 53.16

84.96 53.16

Total Expenditure 6.97 17.00

Interest 471.75 359.03

Gross Profit/(Loss) after Interest but

before Depreciation and Taxation (393.76) (322.87)

Depreciation 75.66 75.66

Income Tax for Earlier year written off - 0.15

Net Profit/(Loss) (469.42) (398.68)



Your Directors report that the Net Loss of the Company for the year under report is Rs.469.42 lakhs as against Net Loss of Rs. 398.68 Lakhs of previous year. Your Directors report that the Mill is not functioning with effect from 03.11.2007 due to disconnection of power supply by TNEB.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Sri. K.AIagiriswami, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditors Report, the Company has made a reference before BIFR on 28.05.2001 and the Company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. However, the proceedings before BIFR were abated as per the order of BIFR on 22.04.2010 and the Company has filed an appeal against the above said order of BIFR with AAIFR which is pending.

b) In respect of qualification made by Auditors under Clause 4 (a) (ii) of Auditors Report, the comments are self-explanatory. Further the Company has settled OTS dues with M/s. TIIC on 21.07.2010 and the Company is taking steps to reach One Time Settlement with M/s.SIPCOT.

c) In respect of qualification made by the Auditors under Clause 4 (a) (iii), the Company will take steps to obtain remaining confirmation letters for balances of Loans and Advances, Sundry Debtors and Sundry Creditors.

d) In respect of comments made by the Auditors under clause ix (c) we have to report that Honble Madras High Court has set aside the order of the Regional Provident Fund Commissioner, Madurai. Hence, there are no Provident Fund payable by the company Further, under clause (x) and (xi) of the Annexure to the Auditors Report, no explanation has been offered since the same are self explanatory.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri. R.Vijaykumar, Director, Sri. K.AIagiriswami, Director and Sri. K S .Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the CompaniesAct, 1956.

6. SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE:

The Shareholders / Investors Grievances Committee was constituted with Mr .K.AIagiriswami as Chairman, Mr. R.Vijaykumar as Member and Mr.K.S.Venugopala as Member and Compliance Officer.

The scope of the Committee is to look into the Shareholders/Investors Complaints / Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines / scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review - on 20th July, 2009 and 22nd January 2010 to review the status of complaints from the Shareholders / Investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2009-2010.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for transfer/transmission -

Non-receipt of Balance Sheet -

Others -

Total Nil

The above shows that complaints received were Nil and Pending Complaints were Nil.

Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the CompaniesAct, 1956, your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 profit or loss of the Company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS:

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956 No employee was in receipt of remuneration of Rs.24,00,0007- per annum during the year ended 31st March, 2010.

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY: Not applicable

B. TECHNOLOGY ABSORPTION: Not Applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors

For STERLING SPINNERS LTD.,

Place : Chennai K.S. VENUGOPALA

Date : 01.09.2010 Chairman-cum-Managing Director

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Mar 31, 2009

The Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2009.

1. OPERATING RESULTS:

Current Year Previous Year (Rs. in lakhs)

Net Sales / Income from Operations - 175.49

Other Income 53.16 8.28

53.16 183.77

Total Expenditure 17.00 215.88

Interest 359.03 297.60 Gross Profit/(Loss) after Interest but

before Depreciation and Taxation (322.87) (329.71)

Depreciation 75.66 75.66

Income Tax for Earlier year written off 0.15 0.28

Net ProfitV(Loss) (398.68) (405.65)

Your Directors report that the Net Loss of the Company for the year under report is Rs.398.68 lakhs as against Net Loss of Rs.405.65 Lakhs of previous year. Your Directors have to report that the Mill is not functioning with effect from 03.11.2007 due to disconnection of power supply by TNEB.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Sri. R.Vijaykumar, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditors Report, the Company has made a reference before BIFR on 28.05.2001 and the Company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. The rehabilitation package has yet to be approved. The accounts have been prepared on a going concern basis.

b) In respect of qualification made by Auditors under Clause 4 (a) (ii) of Auditors Report, the comments are self-explanatory. Further the Company is taking steps to reach One Time Settlement with M/s.SIPCOT and M/s.TIIC also.

c) In respect of qualification made by the Auditors under Clause 4 (a) (iii), the Company will take steps to obtain remaining confirmation letters for balances of Loans and Advances, Sundry Debtors and Sundry Creditors.

d) In respect of comments made by the Auditors under clause ix (c), (x) and (xi) of the Annexure to the Auditors Report, no explanation has been offered since the same are self explanatory.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the CompaniesAct, 1956. The Committee comprises of Sri. R.Vijaykumar, Director, Sri.K.AIagiriswami, Director and Sri.K.S.Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The roie, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the CompaniesAct, 1956.

6. SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE:

The Shareholders Investors Grievances Committee was constituted with Mr.K.AIagiriswami as Chairman, Mr.R.VijayKumaras Member and Mr.K.S.Venugopala as Member and Compliance Officer.

The scope of the Committee is to look into the Shareholders Investors Complaints Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review- on 23rd July, 2008 and 23rd January 2009 to review the status of complaints from the Shareholders Investors and the redressal measures . taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2008-2009.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for transfer/transmission

Non-receipt of Balance Sheet

Others

Total Nil

The above shows that complaints received were Nil and Pending Complaints were Nil. Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the CompaniesAct, 1956, your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that 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 profit or loss of the Company for that year;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS:

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956 No employee was in receipt of remuneration of Rs.24,00,000/- per annum or Rs.2,00,000/- per month during the year ended 31st March, 2009.

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s.Tamil Nadu Industrial Investment Corporation Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors

For STERLING SPINNERS LTD.

Place : Chennai K.S. VENUGOPALA Date : 22.06.2009 Chairman-cum-Managing Director

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Mar 31, 2007

The Directors have pleasure in presenting the Thirteenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2007.

1. OPERATING RESULTS:

Current Year Previous Year (Rs. in lakhs)

Net Sales / Income from Operations 361.77 370.21 Other Income 1091.95 20.36 1453.72 390.57 Total Expenditure 442.58 382.87 Interest 229.97 301.17 Gross Profit/(Loss) after Interest but before Depreciation and Taxation 781.17 (293.47) Depreciation 75.66 75.66 Provision for Fringe Benefit Tax 0.28 0.09 Net Profit/(Loss) 705.23 (369.22)

Your Directors wish to inform that the Company has achieved a Turnover of Rs.361.77 lakhs in the Current Year as against Rs.3 70.21 Lakhs turnover of previous year. Your Directors report that the Net Profit for the Company for the year under report is Rs.705.51 lakhs as against Loss of Rs.369.13 Lakhs of previous year. While taking account of waiver off Interest of Rs. 547.08 lakhs obtained from M/s. PNB and Rs. 353.94 lakhs of TIIC an account of One Time Settlement.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS;

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Sri. R. Vijaykumar, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS;

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditors Report, the Company has made a reference before BIFR on 28.05.2001 and the Company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. The rehabilitation package is yet to be approved. The accounts have been prepared on a going concern basis since the Company is running the business inspite of sickness of the Company.

b) In respect of Qualification made by Auditors under Clause 4 (a) (ii) of Auditors Report. The comments are self explanatory Further the Company is taking steps to reach One time settlement with M/s. SIPCOT.

c) In respect of qualification made by the Auditors under Clause 4 (a) (iii), the Company will take steps to obtain remaining confirmation letters for balances of Loans and Advances, Sundry Debtors and Sundry Creditors.

d) In respect of comments made by the Auditors under clause ix (c), (x) and (xi) of the Annexure to the Auditors Report, no explanation has been offered since the same are self-explanatory.

5. AUDIT COMMITTEE: An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R. Vijaykumar, Director, Sri. K. Alagiriswami, Director and Sri. K.S. Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE : The Shareholders / Investors Grievances Committee was constituted with Mr. K. Alagiriswami as Chairman, Mr. R. Vijaykumar as Member and Mr. K.S. Venugopala as Member and Compliance Officer.

The Scope of the Committee is to look into the Shareholders/Investors Complaints / Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines / scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review - on 28th July, 2006 and 30th January, 2007 to review the status of complaints from the Shareholders/investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2006-2007.

Nature of Complaints No. of Complaints

Non-receipt of shares sent for transfer/transmission Non-receipt of Balance Sheet Others Total Nil

The above shows that complaints received were Nil and Pending Complaints were Nil Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

0 that in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) that they 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 financial year and of the profit or loss of the Company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS:

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES :

In terms of the requirement of Section, 217 (2A) of the Companies Act , 1956, No employee was in receipt of remuneration of Rs, 24,00,0007- per annum during the year ended 31 st March 2007.

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY:

1) POWER AND FUEL CONSUMPTION 2006-2007 2005-2006

(i) ELECTRICITY PURCHASED Units 49.45 Lakhs 54.18 Lakhs Total Amount Rs. 209.05 Lakhs Rs.221.96 Lakhs Rate/Unit Rs. 4.23 Rs. 4.10 (ii) OWN GENERATION THROUGH DIESEL GENERATION: Units 0.32 Lakhs 0.75 Lakhs Total Amount Rs.4.00 Lakhs Rs. 8.33 Lakhs Rate/Unit Rs.12.46 Rs.11.10 2 a) Consumption per Kg. of Production 3.12 Per Unit 3.12 per Unit b) Cost of Consumption per Kg. of Production Rs.13.34 Rs. 13.09

B. TECHNOLOGY ABSORPTION;

The Company has taken steps in carrying out Research & Development Activities in the areas of:

a) Grading of Cotton for specific count and quality of yarn.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimising the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO;

During the year under review, there is neither Foreign Exchange Earnings nor out go.

12. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. Tamil Nadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, M/s. Textool Company Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD.,

Place : Chennai VENUGOPALA Date : 29.6.2007 Chairman-cum-Managing Director

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Mar 31, 2006

ANNUAL REPORT 2005-2006

DIRECTORS' REPORT

Your Directors have pleasure in presenting the 12th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2006.

1. OPERATING RESULTS:

(Rs. in lakhs) Current Year Previous Year

Net Sales / Income from Operations 370.21 686.95 Other Income 20.30 11.31 390.51 698.26 Total Expenditure 382.15 734.54 Interest 301.17 354.72 Gross Profit/(Loss) after Interest but before Depreciation and Taxation (292.81) (421.00) Depreciation 75.66 75.53 Net Profit/(Loss) (368.47) (496.53)

Your Directors wish to inform that the Company has achieved a Turnover of Rs.370.21 lakhs in the Current Year as against Rs.686.95 Lakhs turnover of previous year. Your Directors report that the Net Loss of the Company for the year under review is decreased to Rs.368.47 lakhs from Rs.496.53 Lakhs of previous year due to increase in gross revenue and also due to decreased in interest on Term Loans and Working Capital Loan to Financial Institution and Bank etc., respectively.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Sri. K. Alagiriswami, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS' OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditor's Report, the Company has made a reference before BIFR on 28.05.2001 and the Company has. been declared as Sick Industrial Company by the BIFR on 6.5.2003. The rehabilitation package is yet to be approved. The accounts have been prepared on a going concern basis since the Company is running the business inspite of sickness of the Company.

b) In respect of qualification made by Auditors under Clause 4 (a) (ii) of Auditor's Report, due to sickness of the Company, the Company is not able to repay the principal and to pay interest to the Financial Institutions and Bank.

c) In respect of qualification made by the Auditors under Clause 4 (a) (iii), the Company will take steps to obtain remaining confirmation letters for balances of Loans and Advances, Sundry Debtors and Sundry Creditors.

d) In respect of comments made by the Auditors under clause ix (c), (x) and (xi) of the Annexure to the Auditor's Report, no explanation has been offered since the same are self-explanatory.

5. AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R. Vijaykumar, Director, Sri. K. Alagiriswami, Director and Sri. K.S. Venugopala, Chairman-cum-Managing Director with Sri. R. Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. SHAREHOLDERS / INVESTORS' GRIEVANCES COMMITTEE :

The Shareholders / Investors' Grievances Committee was constituted with Mr. K. Alagirisamy as Chairman, Mr. R. Vijay kumar as Member and Mr. K.S. Venugopala as Member and Compliance Officer.

The Scope of the Committee is to look into the Shareholders/Investors' Complaints / Grievances relating to transfer of shares, non-receipt of Balance Sheet and issue of Duplicate Share Certificates. In addition, the Board shall also from time to time to provide requisite guidelines / scope of work for the Grievance Committee and the Committee will discharge such other functions as are required under the provisions of the Listing Agreement and Companies Act, 1956.

The Committee met twice during the year under review - on 28th July, 2005 and 30th January, 2006 to review the status of complaints from the Shareholders / investors and the redressal measures taken by the Company.

The following table shows the nature of complaints received from the Shareholders during the year 2005-2006.

Nature of Complaints No. of Complaints

Non-receipt of shares sent - for transfer/transmission

Non-receipt of Balance Sheet -

Others -

Total Nil

The above shows that complaints received were 'Nil' and Pending Complaints were 'Nil'

Both the above meetings were attended by all the members of the Grievance Committee.

7. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of Corporate Governance are annexed and form part of the Annual Report.

8. DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) that they 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 financial year and of the profit or loss of the Company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

9. AUDITORS: M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

10. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, No employee was in receipt of remuneration of Rs, 24,00,000/- per annum during the year ended 31st March 2006.

11. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY:

1) POWER AND FUEL CONSUMPTION 2005-2006 2004-2005 (i) ELECTRICITY PURCHASED Units 54.18 Lakhs 55.95 Lakhs Total Amount Rs. 221.96 Lakhs Rs. 223.45 Lakhs Rate/Unit Rs. 4.10 Rs. 3.99

(ii) OWN GENERATION THROUGH DIESEL GENERATION:

Units 0.75 Lakhs 0.61 Lakhs Total Amount Rs. 8.33 Lakhs Rs. 6.96 Lakhs Rate/Unit Rs.11.10 Rs.11.42

2) a) Consumption per Kg. of Production 3.12 Per Unit 4.06 per Unit

b) Cost of Consumption per Kg. of Production Rs. 13.09 Rs. 16.54

B. TECHNOLOGY ABSORPTION:

The Company has taken steps in carrying out Research & Development Activities in the areas of:

a) Grading of Cotton for specific count and quality of yarn.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimizing the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor out go.

12. ACKNOWLEDGMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. Tamil Nadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, M/s. Textool Company Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors

For STERLING SPINNERS LTD.,

Place : Chennai K. S. VENUGOPALA Date : 19.06.2006 Chairman-cum-Managing Director

ANNEXURE TO THE DIRECTORS' REPORT

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Mar 31, 2005

Our Directors have pleasure in presenting the Eleventh Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2005.

1. OPERATING RESULTS: Current Year Previous Year (Rs. in lakhs)

Net Sales/Income from Operations 686.95 1073.68

Other Income 11.31 4.76

698.26 1078.44

Total Expenditure 764.54 1070.73

Interest 354.72 295.89

Gross Profit/(Loss) after Interest but before Depreciation and Taxation (421.00) (288.18)

Depreciation 75.53 75.36

Net Profit/(Loss) (496.53) (363.54)

Your Directors wish to inform that the company has achieved a Turnover of Rs.686.95 lakhs in the Current Year as against Rs. 1073.68 Lakhs turnover of previous year. Your Directors report that the Net Loss of the Company for the year under review is increased to Rs.496.53 lakhs from Rs.363.54 Lakhs of previous year due to decrease in gross revenue and also due to increase in interest on Term Loans and Working Capital Loan to Financial Institution and Bank, etc. respectively.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the companys Articles of Association, Sri. R.Viyaykumar, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (a) (i) of Auditors Report, the Company has made a reference before BIFR on 28.05.2001 and the company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. The rehabilitation package has yet to be formulated. The accounts have been prepared on a going concern basis since the company is running the business inspite of sickness of the company.

b) In respect of qualification made by Auditors under Clause 4 (a) (ii) of Auditors Report, due to sickness of the company, the company is not able to repay the principal and to pay interest to the Financial Institutions and Bank.

c) In respect of qualification made by the Auditors under Clause 4 (a) (iii), the company will take steps to obtain remaining confirmation letters for balances of loans and advances Sundry Debtors and Sundry Creditors.

d) In respect of comments made by the Auditors under clause ix (c), x and xi of the Annexure to the Auditors Report, no explanation has been offered since the same are self-explanatory.

5. AUDIT COMMITTEE: An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri. R. Vijaykumar, Director, Sri. K. Alagiriswami, Director and Sri. K.S. Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of corporate Governance are annexed and form part of the Annual Report.

7. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) that 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 profit or loss of the company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

8. AUDITORS:

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

9. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended upto date is given below:

Statement showing the particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules 1975.

Name Designation Remuneration Qualification before joining the Company

Sri.K.S.Venugopala Chairman-cum- Rs.14,40,000/- M.Com., Managing Per Annum Director of Savorit Limited and continuing the same without any remuneration.

Name Experience Date of Age Employment of Commencement Employment Sri.K.S.Venugopala 35 years 24.03.1995 56 Rendering services as Chairman-cum- Managing Director

10. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY:

1) POWER AND FUEL CONSUMPTION 2004-2005 2003-2004

(i) ELECTRICITY PURCHASED

Units 55.95 Lakhs 50.67 Lakhs

Total Amount Rs. 223.45 Lakhs Rs.201.61 Lakhs

Rate/Unit Rs. 3.99 Rs. 3.98

(ii) OWN GENERATION THROUGH DIESEL GENERATION

Units 0.61 Lakhs 0.80 Lakhs

Total Amount Rs. 6.96 Lakhs Rs. 5.02 Lakhs

Rate/Unit Rs. 11.42 Rs. 6.26

2) a) Consumption per Kg. of Production 4.06 Per Unit 5.36 per Unit

b) Cost of Consumption per Kg. of Production Rs. 16.54 Rs. 21.50

B. TECHNOLOGY ABSORPTION:

The Company has taken steps in carrying out Research & Development Activities in the areas of:

a) Grading of Cotton for specific count and quality of Yarn.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimizing the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO;

During the year under review, there is neither Foreign Exchange Earnings nor out go.

11. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. The Tamil Nadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, M/s. Textool Company Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD., Place : Chennai K.S.VENUGOPALA Date : 28.07.2005 Chairman-cum-Managing Director

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Mar 31, 2004

The Directors have pleasure in presenting the Tenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2004.

OPERATING RESULTS:

(Rs. in lakhs)

Current Year Previous Year

Net Sales/Income from Operations 1073.68 783.62

Other Income 4.76 6.45

1078.44 790.07

Total Expenditure 1070.73 784.62

Interest 295.89 260.64

Gross Profit/(Loss) after Interest but before Depreciation and Taxation (288.18) (255.19)

Depreciation 75.36 75.30

Income Tax for Earlier year written off - 1.27

Net Profit/(Loss) (363.54) (331.76)

The Directors wish to inform that the company has achieved a Turnover of Rs.1073.68 lakhs in the Current Year as against Rs.783.62 Lakhs turnover of previous year. Your Directors report that the Net Loss of the Company for the year under review is increased to Rs.363.54 lakhs from Rs. 331.76 Lakh of previous year due to increase in interest on Term Loans and Working Capital Loan to Financial Institution and Bank etc., respectively.

DIVIDEND

The Directors do not recommend any dividend for the under review.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the company's Articles of Associations. Sri. K. Alagiriswami, Director will retire by rotation and being eligible offers himself for re-appointment.

AUDITORS' OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under Clause 4 (i) (a) of Auditor's Report. The Company has made a reference before BIFR on 28.05.2001 and the company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. The rehabilitation package has yet to be formulated. The accounts have been prepared on a going concern basis since the Company is running the business inspite of sickness of the company.

b) In respect of qualification made by Auditors under Clause 4 (i) (b) of Auditor's Report, due to sickness of the company, the Company is not able to repay the principal and to pay interest to the Financial Institutions and Bank.

c) In respect of qualification made by the Auditors under Clause 4 (i) (c), the Company will take steps to obtain remaining confirmation letters for balances of loans and advances Sundry Debtors and Sundry Creditors. d) In respect of comments made by the Auditors under clause 9 (c), 10 and 11 of the Annexure to the Auditor's Report, no explanation has been offered since the same are self explanatory.

AUDIT COMMITTEE:

An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R. Vijaykumar, Director, Sri. K. Alagiriswami, Director and Sri. K.S. Venugopala, Chairman-cum-Managing Director with Sri.R.Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are conformity with the requirements of the Companies Act, 1956.

MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of corporate Governance are annexed and form part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies Act, 1956, Your Directors declare:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) That 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 profit or loss of the company for that period;

iii) That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

AUDITORS:

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGMENT:

The Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. Tamil Nadu Industrial Investment Corporation Limited, M/s. Punjab Notional Bank, M/s. Textool Company Limited. Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD.,

Place : Chennai K.S. VENUGOPALA Date : 30.07.2004 Chairman cum Managing Director

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Mar 31, 2003

Your Directors have pleasure in presenting the Ninth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2003.

1. OPERATING RESULTS: Current year Previous year (Rs.in lakhs)

Net Sales/Income from Operations 783.62 716.24 Other Income 6.45 22.97

790.07 739.21

Total Expenditure 784.62 768.42

Interest 260.64 203.07

Gross Profit/(Loss) after Interest but

before Depreciation and Taxation (255.19) (232.28)

Depreciation 75.30 75.22

Income Tax for Earlier year written off - 1.27

Net Profit/(Loss) (331.76) (307.50)

Your Directors wish to inform that the company has achieved a Turnover of Rs.783.62-lakhs in the Current Year as against Rs.716.24 Lakhs turnover of previous year. Your Directors report that the Net Loss of the Company for the year under review is increased ot Rs.331.76 lakhs from. Rs. 307.50 lakhs of previous year due. to increase in interest on term loans and working capital loan to Financial Institution and Bank etc., respectively.

2. DIVIDEND

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the companys Articles of Association, Sri. R.Vijaykumar, Director will retire by rotation and being eligible Offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under clause 3 (a) (i) of Auditors Report, the Company has made a reference before BIFR on 28.05.2001 and the company has been declared as Sick Industrial Company by the BIFR on 6.5.2003. The accounts have been prepared on a going concern , basis since the company is running the business inspite of sickness of the company.

b) In respect of qualification made by Auditors under clause 3 (a) (ii) of Auditors Report, due to sickness of the company, the company is not able to repay the principal and to pay interest to the Financial Institutions and Bank.

c) In respect of qualification made by the Auditors under clause 3 (a) (iii), the company will take steps to obtain remaining confirmation letters for balances of loans and, advances, Sundry Debtors and Sundry Creditors.

5. AUDIT COMMITTEE: An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R.Vijaykumar, Director, Sri.K. Alagiriswamy, Director and Sri. K.S.Venugopala, Chairman-cum-Managing Director with Sri. R.Vijaykumar as its chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE:

A report on Management Discussion and Analysis and a Status report on the compliance of corporate Governance are annexed and for part of the Annual Report.

7. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies, Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) that they 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 financial year and of the profit or loss of the company for that period;

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

8. AUDITORS;

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

9. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975 as amended upto date is given below:

Statement showing the particulars of Employees pursuant to section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules 1975.

Name *Designation Remuneration Qualification

Sri.K.S.Venugopala Chairman-cum- Rs.14,40,000/- M.Com., Managing Per Annum Director

Name Experience Date of Age Employment Commencement before joining Employment the Company

Sri.K.S.Venugopala 33 years 24.03.1995 54 Rendering services as Chairman-cum- Managing Director of Savorit Limited and continuing the same without any remuneration.

10. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY :

1) POWER AND FUEL CONSUMPTION 2002 - 2003 2001 - 2002

(i) ELECTRICITY PURCHASED

Units 41.99 Lakhs 32.76 Lakhs

Total Amount Rs. 167.93 Lakhs Rs. 137.45 Lakhs

Rate/Unit Rs. 4.00 Rs. 4.20

(ii) IN OWN GENERATION THROUGH DIESEL GENERATION:

Units 1.68 Lakhs 3.64 Lakhs

Total Amount Rs. 6.99 Lakhs Rs. 24.03 Lakhs

Rate/Unit Rs. 4.16 Rs. 6.60

2. a) Consumption per Kg. of Production 4.45 Per Unit 5.08 per unit

b) Cost of Consumption per Kg. of Production Rs. 17.83 Rs. 22.57

B. TECHNOLOGY ABSORPTION:

The Company has taken steps in carrying out Research & Development Activities in the areas of:

a) Grading of Cotton for specific count and quality of yam.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimising the process parameters to achieve the best quality of yam to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

11 ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamil Nadu Limited, M/s.Tamil Nadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, M/s.Textool Company Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD., Place: Chennai K.S.VENUGOPALA Date: 11.06.2003 Chairman-cum-Managing Director

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Mar 31, 2002

Your Directors have pleasure in presenting the Eighth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2002.

1. OPERATING RESULTS:

Current year Previous year (Rs.in lakhs)

Net Sales/Income from Operations 716.24 1217.10

Other Income 22.97 5.95

739.21 1223.05

Total Expenditure 768.42 1178.40

Interest 203.07 208.50

Gross Profit/(Loss) after Interest but before Depreciation and Taxation (232.28) (163.85)

Depreciation 75.22 75.01

Net Profit/(Loss) (307.50) (238.86)

Your Directors wish to Worm that the company has achieved a Turnover of Rs.716.24 lakhs in the Current Year as against Rs. 1217.10 Lakhs turnover of previous year. Your Directors report that the Net Loss of the Company for the year under review is increased to Rs.307.50 lakhs from Rs.238.86 lakhs of previous year due to sickness of the company.

2. DIVIDEND:

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the companys Articles of Association, Sri.K.Alagiriswamy, Director will retire by rotation and being eligible offers himself for re-appointment.

4. AUDITORS OBSERVATION ON ACCOUNTS:

a) In respect of qualification made by Auditors under clause 3 (a) (i) of Auditors report, the company is awaiting further directions from BIFR and the Company will comply the same. The accounts have been prepared on a going concern basis since the company is running the business inspite of sickness of the Company

b) In respect of qualification made by Auditors under clause 3 (a) (ii) of Auditors Report, due to sickness of the company, the Company is not able to repay the principal and to pay interest to the Financial Instutitions and Banks.

c) In respect of qualification made by the Auditors under clause 3 (a) (iii), the company will take steps to obtain confirmation letters for balances of loans and advances. Sundry Debtors and Sundry Creditors and will submit to the Auditors at the time of next year Audit.

5. AUDIT COMMITTEE: An Audit Committee of the Board of Directors has been constituted as per Section 292A of the Companies Act, 1956. The Committee comprises of Sri.R.Vijaykumar. Director, Sri.K.Alagiriswami, Director and Sri.K.S.Venugopaal,Chairman-cum-Managing Director, with Sri R. Vijaykumar as its Chairman.

The role, terms of reference and the authority and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 1956.

6. CORPORATE GOVERNANCE: Your Directors have to inform that your company is required to comply with the requirements of corporate Governance by 31st March, 2003. The company is taking necessary steps in this regard.

7. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies, Act, 1956, Your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) that they 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 financial year and of the profit or loss of the company for that period:

iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

8. AUDITORS;

M/s.S.Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

9. PARTICULARS OF EMPLOYEES:

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975 as amended upto date is given below:

Statement showing the particulars of Employees pursuant to section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of employees) (Rules 1975.

Name Designation Remuneration Qualification

Sri.K.S.Venugopaal Chairman-cum- Rs.14,40,000/- M.Com. Managing Per Annum Director

Name Experience Date of Age Employment before joining the Company Employment

Sri.K.S.Venugopaal 32 years 24.03.1995 52 Rendering services as Chairman-cum- Managing Director of Savorit Limited and continuing the same without an remuneration.

10. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT. 1956:

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

A. CONSERVATION OF ENERGY:

1) POWER AND FUEL CONSUMPTION 2001 - 2002 2000 - 2001

i) ELECTRICITY PURCHASED:

Units 32.76 Lakhs 38.05 Lakhs

Total Amount Rs. 137.45 Lakhs Rs. 154.82 Lakhs

Rate/Unit Rs. 4.20 Rs. 4.07

ii) IN OWN GENERATION THROUGH DIESEL GENERATION:

Units 3.64 Lakhs 8.87 Lakhs

Total Amount Rs. 24.03 Lakhs Rs.41.64 Lakhs

Rate/Unit Rs. 6.60 Rs. 4.69

2. a) Consumption per Kg. of Production 5.08 per Unit 6.76 per Unit

b) Cost of Consumption per Kg. of Production Rs.22.57 Rs.28.28

B. TECHNOLOGY ABSORPTION:

The Company has taken steps in carrying out Research & Development Activities in the areas of:

a) Grading of Cotton for specific count and quality of yarn.

b) Evaluation and maintenance of quality of Yam at various stages of processing and optimising the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

11. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude to the Central and State Governments, M/s.State Industries Promotion Corporation of Tamil Nadu Limited, M/s.Tamil Nadu Industrial Investment Corporation Limited, M/s.Punjab National Bank, M/s. Textool Company Limited, Suppliers, Dealers and the share holders for their continued co-operation and support.

On behalf of the Board of Directors For STERLING SPINNERS LTD., place: chennai K.S.VENUGOPAAL Date: 29.06.2002 Chairman-cum-Managing Director S.DHANYAKUMAR & CO., PHONE: [phone] Chartered Accountants 3, SOUTH BOAG ROAD T.NAGAR CHENNAI-600017

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Mar 31, 2001

The Directors have pleasure in presenting the Seventh Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2001.

1. OPERATING RESULTS :

Current year Previous year (Rs. in lakhs)

Net Sales / Income from Operations 1217.10 1246.39 Other Income 5.95 5.05

1223.05 1251.44 Total Expenditure 1178.40 1146.97 Interest 208.50 174.70

Gross Profit / (Loss) after Interest but before Depreciation and Taxation (163.85) (70.23) Depreciation 75.01 75.43 Net Profit / (Loss) (238.86) (145.66)

The Directors wish to inform that the Company has achieved a Turnover of Rs. 1217.10 lacs in the current year as against Rs. 1246.39 lacs turnover of previous year. The Directors report that the Net Loss of the Company for the year under review is increased to Rs. 238.86 lacs from Rs. 145.66 lacs of previous year due to Production and Technical problems on account of Labour Turnover, high financial charges and marketing problems due to recessionary tendency in the Textile Industry.

2. REFERENCE TO BIFR :

The Company has became a Sick Industrial Company as on 31.03.2001 within the meaning of Clause (o) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board of Directors have decided to make a reference under Section 15 of the said Act to BIFR for the determination of the measures which shall be adopted with respect to the Company.

3. DIVIDEND :

The Directors do not recommend any dividend for the year under review.

4. DIRECTORS :

Sri R. Vijaykumar, has been appointed as Additional Director of the Company with effect from 23.11.2000. Being appointed as Additional Director of the Company, he can hold the office of Directorship upto the conclusion of the Seventh Annual General Meeting of the Company. Hence, necessary resolution has been moved for the appointment of Sri R. Vijaykumar, as Director of the Company, who is liable to retire by rotation.

Sri P.S. Ramamurthy, resigned as Director of the Company with effect from 19.01.2001. The Directors place on record the valuable services rendered by Sri P.S. Ramamurthy, during his tenure as Director of the Company and convey their appreciation to him.

Sri P. Balakrishnan, has been appointed as Additional Director of the Company with effect from 29.01.2001 and vacated the said Directorship with effect from 29.03.2001. The Directors place on record the services rendered by Sri P. Balakrishnan during his tenure as Director of the Company.

5. AUDITORS :

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

6. INDUSTRIAL RELATIONS :

The Directors recognize the services rendered by the employees and wish to record Board's appreciation for the sincere work rendered by them.

7. PARTICULARS OF EMPLOYEES :

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended upto date is given below :

Statement showing the particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975

B. TECHNOLOGY ABSORPTION :

The Company has taken steps in carrying out Research & Development Activities in the areas of :

a) Grading of Cotton for specific count and quality of Yarn.

b) Evaluation and maintenance of quality of yarn at various stages of processing and optimising the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO :

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

D. The Board of Directors have to state Under section 217 (2AA) that Applicable Accounting Standards had been followed, adopted accounting principles and applied and prepared the Annual Accounts as a going concern basis and applied them consistently so as to give a true and fair view of the state of affairs of the Company as on 31.03.2001 and losses of the Company for the year ended 31st March, 2001. The Board has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the Company's Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

E. ACKNOWLEDGEMENTS :

The Directors wish to place on record their gratitude to the Central and State Governments, M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. Tamilnadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, M/s. Textool Company Limited, Suppliers, Dealers and the Share holders for their continued co-operation and support.

Place : Chennai On behalf of the Board of Directors Dated : 11.05.2001 of STERLING SPINNERS LTD. K.S. VENUGOPAAL CHAIRMAN-CUM-MANAGING DIRECTOR.

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Mar 31, 2000

The Directors have pleasure in presenting the Sixth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2000.

OPERATING RESULTS :

Current year Previous year (Rs. in Lakhs)

Net Sales/Income from Operations 1246.39 1116.57

Other Income 5.05 4.56

1251.44 1121.13

Total Expenditure 1146.97 1208.37

Interest 174.70 208.94

Gross Profit/(Loss) after Interest but before Depreciation and Taxation (70.23) (296.18)

Depreciation 75.43 75.57

Net Profit/(Loss) (145.66) (371.75)

The Directors wish to inform that the Company has achieved a Turnover of Rs.1246.39 lakhs in the Current Year as against Rs.1116.57 lakhs turnover of previous year. The Directors report that the Net Loss of the Company for the year under review is reduced to Rs.145.66 lakhs from Rs.371.75 lakhs of previous year on account of remedial measures taken. Despite the fact that still there is a general recession in the Textile Industry and still the Company has to overcome the low productivity on account of labour turnover, high financial charges and on account of mismatch between the cost of the raw material and selling price.

DIVIDEND :

The Directors do not recommend any dividend for the year under review.

DIRECTORS :

Sri R.K. JHAVER, resigned as Director of the Company with effect from 27.09.1999. The Directors placed on record the valuable services rendered by Sri. R.K. Jhaver during his tenure as Director of the Company and conveyed their appreciation to him.

Sri P.S. RAMAMURTHY, has been appointed as Additional Director of the Company with effect from 27.09.1999. Being appointed as Additional Director of the Company, he can hold the Office of Directorship up to the conclusion of the Sixth Annual General Meeting of the Company. Hence, necessary resolution has been moved for the appointment of Sri.P.S. Ramamurthy, as Director of the Company, who is liable to retire by rotation.

AUDITORS :

M/s. S. Dhanyakumar & Co., Chartered Accountants will retires as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

INDUSTRIAL RELATIONS :

The Directors recognize the services rendered by the employees and wish to record Board's appreciation for the sincere work rendered by them.

PARTICULARS OF EMPLOYEES :

In terms of the requirement of Section, 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended upto date is given below :

Statement showing the particulars of Employees pursuant to section 217(2-A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975.

Name Design Remune- Quali- Experi Date of Age Employment ration fication enc Commence- joining the ment of Company Employment

Sri Chairman Rs.8,40.000/- M.Com. 30 years 24.03.1995 51 Rendering K.S. cum P.A. services as Venu- Managing Chairman- gopal Director cum-Manag ing Direc tor of Savorit Limited and continuing the same without any remu- neration.

INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956 :

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 :

A. CONSERVATION OF ENERGY :

POWER AND FUEL CONSUMPTION 1999-2000 1998-99

ELECTRICITY :

a) PURCHASED :

Units 33.66 Lakhs 29.57 Lakhs

Total Amount Rs. 97.50 Lakhs Rs. 75.54 Lakhs

Rate/Unit Rs. 2.99 Rs. 2.55

b) OWN GENERATION

Units 15.48 Lakhs 18.60 Lakhs

Total Amount Rs. 53.75 Lakhs Rs. 63.10 Lakhs

Rate/Unit Rs. 3.47 Rs. 3.39

c) THROUGH STEM TURBINE/GENERATOR

2. a) Consumption per Unit of Production 3.79 Units 4.55 Units

b) Cost of Consumption per Unit of Production Rs. 11.88 Rs. 13.10

B. TECHNOLOGY ABSORPTION :

The Company has taken steps in carrying our Research & Development Activities in the areas of :

a) Grading of Cotton for specific count and quality of yarn.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimising the process parameters to achieve the best quality of yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO :

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

D. POTENTIALLY SICK INDUSTRIAL COMPANIES PROCEEDINGS :

The Board of Directors have to recall that the Company has eroded 50% (fifty percent) or, more of its peak networth as on 31st March, 1999. Accordingly, the Company has initiated proceedings as contemplated under Section 23 of the Sick Industrial Companies (Special Provision) Act, 1985 and the members of the company considered the position of the same in the Extra-Ordinary General Meeting of the Company held on 15.11.1999. The Director have further informed that the Company has reported the above said Erosion of Loss of 50% of Networth to the BIFR on 22nd November, 1999. The Company has taken remedial measures and still the company is suffering with low productivity on account of labour turnover and high financial charges and on account of mismatch between the cost of the raw material and selling price.

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Mar 31, 1999

The Directors have pleasure in presenting the Fifth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 1999.

1. OPERATING RESULTS :

Current Previous

year year

(Rs.in lakhs)

Net Sales/Income from Operations 1116.57 941.83

Other Income 4.56 2.17

1121.13 944.00

Total Expenditure 1208.37 779.07

Interest 208.94 174.22

Gross Profit/(Loss) after Interest but before Depreciation and taxation (296.18) (9.29)

Depreciation 75.57 58.58

Net Profit (Loss) (371.75) (67.87)

The Directors wish to inform that the Company has achieved a Turnover of Rs.1116.57 lakhs in the Current Year as against Rs.941.83 lakhs turnover of previous year. The Directors have to report that the company's profitability is under strain due to recessionary trend and sluggish markets in general and due to low productivity on a account of labour turnover, heavy interest payments and unable to reap the benefits from the market either from purchase of cotton or from sale of yarn due to lack of adequate resources.

2. DIVIDEND :

The Directors do not recommend any dividend for the year under review.

3. DIRECTORS :

Sri. K.S. Kamalakannan, and Sri. M. Paramasivam resigned as Directors of the company with effect from 28.06.1999.

The Directors place on record the valuable services rendered by Sri. K.S. Kamalakannan and Sri. M. Paramasivam during their tenure as Directors of the company and convey their appreciation to them.

In accordance with the provisions of the Companies Act, 1956 and the company's Articles of Association, the Directors have to inform that Sri. K. Alagiriswami, Director is to retire by rotation at the Fifth Annual General Meeting and being eligible, offers himself for re-appointment.

4. AUDITORS :

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

5. INDUSTRIAL RELATIONS :

The Directors recognize the services rendered by the employees and wish to record Board's appreciation for the sincere work rendered by them.

6. PARTICULARS OF EMPLOYEES :

In terms of the requirement of Section. 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975 as amended upto date is given below :

Statement showing the particulars of Employees pursuant to Section 217(2-A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 and forming part of Directors for the year ended 31st March, 1999.

Name Designation Remuneration Qualification

Sri K.S. Venugopaal Chairman-cum- Rs 8,40,000 M.Com., Managing Director P.A.

Experience Date of Age Employment before Commencement joining the Company of Employment

29 years 24.03.1995 50 Rendering services as Chairman-cum-Managing Director of Savorit Limited and continuing the same without any remuneration

7. INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 :

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 :

B. TECHNOLOGY ABSORPTION :

The Company has taken steps in carrying out Research & Development Activities in the areas of :

a) Grading of Cotton for specific count and quality of yarn.

b) Evaluation and maintenance of quality of Yarn at various stages of processing and optimising the process parameters to achieve the best quality yarn to cope with the International Standards.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO :

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

D. GENERAL :

You are well aware of the fact that the textile industries are passing through a very critical and unprecedented recessionery trend and that the company is also suffering due to the sluggish market condition, mismatching between the purchase and sale prices and low productivity. However with great difficulty the Board of Directors are keeping the wheels of company running without stoppages.

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Mar 31, 1998

The Directors have pleasure in presenting the Fourth Annual Report together with the Audited Accounts of the company for the year ended 31st March, 1998.

OPERATING RESULTS : (Rs. in lakhs)

Current Previous year year

Net sales/Income from operations 941.83 255.65 Other Income 2.17 5.21

944.00 260.86

Total Expenditure 779.07 241.51 Interest 174.22 57.79 Gross Profit/(Loss) after Interest but before depreciation and Taxation (9.29) (38.44) Depreciation 58.58 24.02

Net Profit/(Loss) (67.87) (62.46)

The Directors wish to inform that the company has achieved a Turnover of Rs. 941.83 lakhs despite recessionary trend and sluggish market conditions faced by the Textile Industry. The Directors are hopeful of achieving better performance in the ensuing year.

DIVIDEND :

The Directors do not recommend any dividend for the year under review.

DIRECTORS :

During the year there is no change in the Directorship on the Board of the Company. Shri. M. Paramasivam, Director who retires by rotation and being eligible, offers himself for re-appointment.

AUDITORS :

M/s. S. Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

INDUSTRIAL RELATIONS :

During the year under report, the Company continued to have harmonious and cordial relations with its employees and the Directors recognise the services rendered by the employees and wish to record Board's appreciation for the sincere work rendered by them.

Particulars of Employees in terms of the requirement of Sec. 217(2A) of The Companies Act 1956, read with Companies (Particulars of Employees) Rules 1975 as amended upto date :-

None of the employees of the company during the year under report was paid a remuneration which in aggregate of Rs. 3,00,000/- per annum or Rs. 25,000/- per month for any part of the year.

INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956.

Particulars required under company's (Disclosure of Particulars in the report of Board of Directors) Rules 1988 :

TECHNOLOGY ABSORPTION :

The Company has taken steps in carrying out Research & Development Activities in the areas of :-

(a) Grading of Cotton for Specific Count and quality of yarn and

(b) Evaluation and maintenance of quality of yarn at various stages of Processing and optimising the process parameters to achieve the best quality yarn to cope with the international standards.

FOREIGN EXCHANGE EARNINGS AND OUTGO :

During the year under review, there is neither Foreign Exchange Earnings nor outgo.

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Mar 31, 1997

The Directors have pleasure in presenting the Third Annual Report together with the Audited Accounts of the company for the year ended 31st March, 1997.

FINANCIAL RESULTS:(Rs.in lakhs) 1996-97 Profit before Interest & Depreciation 19.35 Less: (a) Interest & Financial charges 57.79 (b) Depreciation 24.02 Profit +/Loss (-) Before Tax (62.46) Less: Provision for Taxation Profit +/Loss (-) after Tax (62.46) 81.81 REVIEW OF OPERATIONS: The Company has commenced its commercial production on 5th July, 1996 with 4032 Spindles and has achieved the Production capacity of 12096 Spindles during March, 1997 in stages.

It took almost nine months to get all the machineries erected and commissioned since the company was forced to extend the date of allotment money payable by the shareholders on account of depressed stock Market and tight money market conditions.

FUTURE PROSPECTS: Consistent with the progressive policies of the company, the capacity utilisation is to be improved besides adding up of value additions for the end product. The company is contemplating on an Expansion Programme for adding another 4032 Spindles with additional Combers for getting the finer variety of yarn. This, the Directors expect would yield better results in the ensuing year.

RESOURCES: As contemplated in the Prospectus dated 3.1.96, Term Loans sanctioned aggregating to Rs.600 lakhs comprising Rs.300 lakhs from SIPCOT, Rs.150 lakhs from TIIC and the balance Rs.150 lakhs from PNB were received and invested into the project by the Company.

Moreover the sanction of working capital limit upto Rs.230 lakhs by Punjab National Bank has helped the Company in meeting the working capital requirements.

Further Plans are on the anvil to raise necessary resources for the proposed Expansion Programme.

DIVIDEND This being the First year of Commercial Operations, the Board could not consider recommending any Dividend.

DIRECTORS: During the year there is no change in the Directorship on the Board of the Company. Shri.K.Alagiriswami, Director who retires by rotation and being eligible, offers himself for re-appointment.

AUDITORS: M/s. S.Dhanyakumar & Co., Chartered Accountants will retire as Auditors at the ensuing Annual General Meeting and are eligible for re-appointment.

INDUSTRIAL RELATIONS: During the year under report, the Company continued to have harmonious and cordial relations with its employees.

WOMEN WORKERS' SUBSIDY: The Directors are happy to inform you that M/s. SIPCOT has sanctioned women workers' subsidy amounting to Rs.3.15 lakhs during the period under report as the Company has provided, employment to women workers, Thus the Socio-economic objective of the Government is being carried out by the company by providing job opportunities to the Women Workers.

PARTICULARS OF EMPLOYEES IN TERMS OF THE REQUIREMENT OF SEC. 217 (2A) OF THE COMPANIES ACT 1956, READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) RULES 1975 AS AMENDED UPTO DATE: None of the employees of the company during the year under report was paid a remuneration which in aggregate of Rs.3,00,000/- per annum or Rs.25,000/- per month for any part of the year.

INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956. Particulars required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(A) CONSERVATION OF ENERGY: The supply of power of 500 KVA from TNEB was given only on 31.3.97 and until then the unit was mining on Diesel generated power.

Now that the Expansion Scheme is on the anvil, we would be needing an additional 500 KVA of Power for which necessity steps were taken and we do not envisage any difficulty in getting the Power Supply.

Apart from this, the Directors have requested SITRA to conduct Energy Audit in order to conserve Energy in the areas where it is possible.

Power & Fuel Consumption (a) Electricity Purchased Units and Amount - Nil (b) Own Generation For the period under report, an amount of Rs. 26.57 lacs was spent towards diesel power for producing 2,64,256 kgs of Yarn (Rs. 10.06 per kg of Yarn/3.50 per unit)

(B) TECHNOLOGY ABSORPTION The Company is yet to carry out Research & Development Activities and it is proposed to introduce the same in the areas of: (a) Grading of Cotton for Specific Count and quality of yarn and (b) Evaluation and maintenance of quality of yarn at various stages of Processing and optimising the process parameters to achieve the best quality yarn to cope up with the international standards.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO : - During the period under review, there is neither Foreign Exchange earnings nor outgo.

ACKNOWLEDGEMENTS: The Directors acknowledge with gratitude the excellent assistance and support rendered by M/s. State Industries Promotion Corporation of Tamilnadu Limited, M/s. Tamilnadu Industrial Investment Corporation Limited, M/s. Punjab National Bank, Tamilnadu Electricity Board, Suppliers, Dealers and Shareholders without which it would not have been possible to implement the Project. The Directors also wish to place on their appreciation of the devoted services rendered by the employees of the Company at all levels.

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Mar 31, 1996

No Information Available.