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Directors Report of Thambbi Modern Spinning Mills Ltd.

Mar 31, 2015

Dear Members,

Performance / Operations

The Directors have pleasure in presenting the 37th Annual Report of the Company, together with financial statements, for the year ended 31st March, 2015.

Financial Results

2014 - 2015 2013 - 2014 Part'culars (Rs. Lakhs) (rs Lakhs)

Revenue from Operation 246.26 131.93

Profit / (Loss) before depreciation and taxation (62.00) (142.12)

Depreciation 40.33 76.78

Profit / (Loss) Before Taxation (102.33) (218.90)

Net Profit / Loss) (102.33) (218.90)

Performance

During the year under review, your company achieved a sales turnover of Rs.105.00 Lakhs compared to sales turnover of Rs.44.00 Lakhs achieved in the previous year. The Company made cash loss of Rs.62.00 Lakhs for the financial year as against cash loss of Rs.142.12 Lakhs in the previous year. The Company has to keep the activities at low level in order to reduce the loss.

Dividend

The Company incurred loss in the financial year. In view of this and the accumulated loss, your directors are unable to recommend any dividend for the year.

Prospects

Our Company is currently involved in trading activity and conversion of yarn. Recently some of the existing buildings have been leased out to generate income out of non operational assets. Your Company will explore to optimize the operations to improve the revenue and profits.

Fund Raising

Equity - Nil

Debt

During the year, your Company has obtained Secured Loan to the tune of Rs. 5.50 Crore from M/s ICICI Home Finance Company Limited. The Company has repaid Rs. 266.76 Crore.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, No employees are drawing remuneration in excess of the limits set out in the said Rules.

Corporate Governance

Your Company is fully compliant with the Corporate Governance guidelines, as laid out in Clause 49 of the Listing Agreement. All the Directors have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company.

The details of the Code of Conduct are furnished in the Corporate Governance Report attached as Annexure-B to this Report. The Managing Director has given a Certificate of compliance with the Code of Conduct, which forms part of Annexure-B, as required under Clause 49 of the Listing Agreement.

The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance, as required under Clause 49 of the Listing Agreement. The Certificate in this regard is attached as Annexure-C to this Report.

The Managing Director / Chief Financial Officer (CEO/CFO) certification as required under Clause 41 of the Listing Agreement is attached as Annexure-D to this Report.

Directors and Key Managerial Personnel

The designation of Mr. R. Jagadeesan, has been changed from Chairman Cum Managing Director to Managing Director w.e.f 11.03.2015.

During the year under review, Ms.Malathi Jagadeesan, Non-Executive Director, retires by rotation at the forthcoming Annual General Meeting, and being eligible offers herself for re-appointment.

Mr.Ashok P Shah and Mr. M. Pugazendhi have been reappointed as Independent Directors for a term of five years from 11.03.2015 to 31.08.2019 on non-rotational basis.

The Reappointment of Mr.Ashok P Shah and Mr. M. Pugazendhi as independent directors and change in designation of Mr. R. Jagadeesan from Chairman cum Managing Director to Managing director have been passed through postal ballot/e-voting w.e.f 11.03.2015.

The Independent Directors of the Company have declared that they meet the criteria of Independence in terms of Section 149(7) of the Companies Act, 2013 and that there is no change in their status of Independence.

Mr.R. Jagadeesan, Managing Director is the "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Auditors

M/s. Sanakaran & Krishnan, Chartered Accountants (Firm Regn. No.003582S) retire at the close of this Annual General Meeting and are eligible for appointment. The Company has received confirmation from M/s. Sanakaran & Krishnan, Chartered Accountants regarding their consent and eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company.

As required under Clause 41 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Audit Committee and the Board of Directors have recommended the appointment of the Auditors for the financial year 2015-16. The necessary resolution is being placed before the shareholders for approval.

Cost Auditor

Appointment of Cost Auditor is not applicable to our Company.

Compliance under Companies Act, 2013

Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company complied with the compliance requirements and the detail of compliances under Companies Act, 2013 are enumerated below:

Extract of Annual Return

An extract of Annual Return in Form MGT-9 as on March 31,2015 is attached as Annexure-G to this Report.

Board Meetings held during the year

During the year, 10 meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached as Annexure-B to this Report.

DirectorsRs. Responsibility Statement

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) in the preparation of the annual financial statements for the year ended March 31,2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

b) for the financial year ended March 31, 2015, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended March 31, 2015.

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual financial statements have been prepared on a going concern basis.

e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Remuneration Policy of the Company

The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided in the Corporate Governance Report which is attached as Annexure-B to this Report.

Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the services of Mr. K N Subramanian, Proprietor, M/s K N Subramanian & Co., Company Secretaries in Practice, Coimbatore to conduct the Secretarial Audit of the Company for the financial year ended March 31st, 2015. The Secretarial Audit Report (in Form MR-3) is attached as Annexure-F to this Report.

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the financial statements.

Related Party Transactions

There were no Transactions with related parties during the financial year 2014-2015.

Corporate Social Responsibility - Not Applicable Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non-independent Directors, considered/evaluated the Boards' performance & Performance of the Managing Director.

The criteria for performance evaluation have been detailed in the Corporate Governance Report which is attached as Annexure-B to this Report.

Vigil Mechanism/ Whistle Blower Policy

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was hosted on the website of the Company.

This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Brief details about the policy are provided in the Corporate Governance Report attached as Annexure-B to this Report.

Deposits

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

Internal Control Systems and their Adequacy

Details of the same are provided in the Management Discussion and Analysis Report attached as Annexure-E to this Report.

Research and Development, Conservation of Energy, Technology Absorption, Foreign Ex- change Earnings and Outgo - Annexure A

Acknowledgement

The Directors wish to express their appreciation for the continued co-operation of the Central and State Governments, bankers, financial institutions, customers, dealers and suppliers and also the valuable assistance and advice received from all the shareholders. The Directors also wish to thank all the employees for their contribution, support and continued co-operation throughout the year.

By Order of the Board of Directors R. Jagadeesan Malathi Jagadeesan Managing Director Director DIN 01153985 DIN 00153952

Salem 15th July 2015




Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 36th Annual Report together with Audited Accounts for the year ended 31st March 2014

Financial Results

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

2013-14 2012-13 Rs. In ''000 Rs. In ''000

Turnover 43,76 3,10,75 Profit/(Loss) before depreciation and taxation (142,12) (211,92) Depreciation 76,78 82,94

Profit /(Loss) Before Taxation (218,90) (294,86)

Net Profit/(LOSS) (218,901) (294,86)

Performance

During the year under review, your company achieved a sales turnover of Rs.44 lakhs compared to the sales turnover of Rs.311 lakhs achieved in the previous year. This is due to severe recession in Textile Industry during the whole year caused by changes in Government policies which led to steep drop in yarn realization compared to increase in cotton prices. In addition to non availability of required working capital, which had been affecting production, the obsolete conditions of machineries also contributed to low level of production. The frequent power disruption and power cuts prevailed during the year badly affected production and the high cost of generating power using diesel gen-sets during the severe power cut period, ranging from ten to twelve hours a day posed serious threat to production and performance. The company made cash loss of Rs.142 lakhs for the financial year as against the cash loss of Rs.212 lakhs in the previous year. The company made net loss of Rs.219 lakhs for the financial year as against net loss of Rs.295 lakhs for the previous year.The loss became inevitable mainly because of abnormal increase in cost of raw materials and power and low production caused by continuous recession in textile industry, shortage of working capital and stiff competition in the market. The company had to keep the activities at low level in order to reduce the loss

Dividend

The Company incurred loss in the financial year. In view of this and the accumulated loss, your directors are unable to recommend any dividend for the year.

Prospects and Future Plans

The Textile Industry has been facing severe recession year after year, for more than a decade now. There is steep increase in cost of raw material and power, which are continuously increasing. The machineries of the company are very old and obsolete and the company has no funds to buy cost-efficient new machines to replace them. The cost of production is high, the yield is low and the company had no adequate working capital required. The operations result in loss due to low selling prices and the cumulative effect of all the above factors. The Government Policy is not conducive to existence and healthy growth of Textile Industry and the prospects for Textile Industry are very bleak.

Your directors are therefore seriously thinking of moving towards trading activity and conversion of yarn and also diversifying to new lines of activities within the objects of the company for the time being, till such time the recession continues in Textile industry. This is essential for the present in order to arrest the loss, which the company is incurring year after year, due to recession in Textile Industry. Once the position of Textile Industry improves, the power supply becomes normal and the company is able to mobilize the required working capital and also funds required for purchasing new modern cost-efficient machinery, the company will make cautious assessment of the situation and consider re-commencing own production of yarn.

Deposits

Your company has not accepted any deposits during the Year.

Directors

There was no change in the Board of Directors during the financial year.

In accordance with the provisions contained in the Articles of Association, Mr. M.Pugazhendhi retires by rotation at the ensuing Annual General Meeting and, being eligible, he offers himself for re-appointment.

Directors'' Responsibility Statement

The Directors confirm that in the preparation of the Annual Accounts for the year ended 31st March, 2014

(i) the applicable accounting standards had been followed and there were no material departures,

(ii) the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year,

(iii) proper and sufficient care had been taken 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) the annual accounts were prepared on a ''going-concern'' basis.

Corporate Governance

In terms of listing agreement with the Stock Exchange, Compliance Report on Corporate Governance is given at Annexure-ll. A certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this Report.

Management Discussion and Analysis of the Operations

The management had a detailed discussion on the operational results for the year ended 31st March 2014 and analyzed the factors that affected production, sales and profit. The management was satisfied with the efforts taken in the situation faced by the company and the adverse market conditions prevailed during the year.

Auditors

The Auditors of the Company, Messrs. Sankaran & Krishnan, Chartered Accountants, Chennai are due to retire at the ensuing Annual General Meeting of the Company. They are eligible for re-appointment. They have consented to act as the Auditors of the Company, if re-appointed.

Cost Auditors

a) Particulars of the cost auditors appointed for the Financial Year : B.Venkateshwar, Cost Auditor, 31/3E, Ramakrishna Nagar, Kavundampalayam, Coimbatore 641030.

b) Due date for filing of the Cost Audit Report: 30.09.2013.

c) Actual date of filing of the Cost Audit Report by the Financial Year 2012-2013 : 26.10.2013

Personnel

During the year under review, none of the employees of the Company was in receipt of remuneration which in the aggregate was in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 and the rules framed these under.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, a statement showing details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is enclosed as Annexure - I.

Industrial Relations

The industrial relations in the Company continued to be cordial during the year.

Acknowledgement

Your Directors place on record their appreciation of the continued co-operation and unstinted support extended to the Company by the Company''s customers, suppliers, employees and shareholders.

By Order of the Board of Directors for Thambbi Modern Spinning Mills Limited

SALEM R.Jagadeesan 30th May 2014 Chairman & Managing Director


Mar 31, 2013

The Members,

The Directors have pleasure in presenting their 35th Annual Report together with Audited Accounts for the year ended 31st March 2013

Financial Results .

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

2012-13 2011-12 In Lakhs In Lakhs

Turnover 3,11 12,15

Profit /(Loss) before depreciation and taxation (2,12) (4,53)

Depreciation 83 1,06

Profit/(Loss) Before Taxation (2,95) (5,59)

Net Profit/(Loss) (2,95) (5,59)

Performance During the year under review, your company achieved a sales turnover of Rs.311 lakhs compared to the sales turnover of Rs.1215 lakhs achieved in the previous year. There was severe recession in Textile Industry during the whole year due to change in Government policies which led to steep drop in yarn realization compared to increase in cotton prices, and non availability of required working capital, all of which contributed to low level of production. Also the power situation in the state continued to pose serious threat and the cost of generating power using diesel gen-sets during the severe power cut period, ranging from ten to twelve hours a day. The Company made Cash loss of t.212 lakhs for the financial year as against the Cash loss of Rs.453 lakhs in the previous year. The company made net loss of Rs.295 lakhs for the financial year, as against net loss of Rs.559 lakhs for the previous year. The profit was drastically affected and loss became inevitable mainly because of abnormal increase in cost of raw materials and power and low production caused by shortage of working capital and stiff competition in the market caused by continuous recession in Textile Industry.

Dividend

The Company incurred loss in the financial year. In view of this and the accumulated loss, your directors are unable to recommend any dividend for the year.

Prospects and Future Plans

During the year under review, the Textile Industry continuously faced severe recession. There was abnormal and steep increase in cost of raw materials and power, which increased the cost of production. Production was low due to lack of required working capital and poor off take in the market caused by stiff competition and recession in Textile Industry. The operations resulted in loss due to low selling prices and the cumulative effect of all the above factors. The Government''s policy is not conducive to existence and growth of Textile Industry and the prospects are quite uncertain. . The position and prospects of textile industry being most uncertain, it is futile to replace the existing old and less-efficient plant and machinery with new modern machinery incurring huge cost. Your directors are, therefore, seriously contemplating to diversify into new lines of activities, within the Objects of the company, to make the company work profitably for the benefit of the shareholders. Till concrete plans crystallize, your Directors will continue to run the company with the existing plant and machinery in the best possible ways so as to improve performance in the current year.

Deposits

Your company has not accepted any deposits during the Year.

Directors

There was no change in the Board of Directors during the financial year.

In accordance with the provisions contained in the Articles of Association, Mrs. Malathi Jagadeesan retires by rotation at the ensuing Annual General Meeting and, being eligible, she offers herself for re-appointment.

Directors'' Responsibility Statement

The Directors confirm that in the preparation of the Annual Accounts for the year ended 31st March, 2013

(i) the applicable accounting standards had been followed and there were no material departures,

(ii) the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year,

(iii) proper and sufficient care had been taken 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) the annual accounts were prepared on a ''going-concern'' basis.

Corporate Governance

In terms of listing agreement with the Stock Exchange, Compliance Report on Corporate Governance and A certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this Report.

Management Discussion and Analysis of the Operations

The management had a detailed discussion on the operational results for the year ended 31 st March 2013 and analyzed the factors that affected production, sales and profit. The management was satisfied with the efforts taken in the situation faced by the company and the adverse market conditions prevailed during the year.

Auditors

The Auditors of the Company, Messrs. Sankaran & Krishnan, Chartered Accountants, Chennai are due to retire at the ensuing Annual General Meeting of the Company. They are eligible for re-appointment. They have consented to act as the Auditors of the Company, if re-appointed.

Cost Auditors

a) Particulars of the cost auditors appointed for the Financial Year : B.Venkateswar, Cost Auditor, 31/3E, Ramakrishna Nagar, Kavundampalayam, Coimbatore 641030.

b) Due date for filing of the Cost Audit Report: 30.09.2012.

c) Actual date of filing of the Cost Audit Report for the Financial Year 2011 - 2012 :06.02.2013 Personnel

During the year under review, none of the employees of the Company was in receipt of remuneration which in the aggregate was in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

Industrial Relations

The industrial relations in the Company continued to be cordial during the year.

Acknowledgement

Your Directors place on record their appreciation of the continued co-operation and unstinted support extended to the Company by the Company''s customers, suppliers, employees and shareholders.

By Order of the Board of Directors

for Thambbi Modern Spinning Mills Limited

SALEM R. Jagadeesan

30th May 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their 34th Annual Report together with Audited Accounts for the year ended 31st March 2012

Financial Results

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

2011-12 2010-11 Rs.In 000 Rs. In 000

Turnover 12,15,18 34,06,39

Profit /(Loss) before depreciation and taxation (453.49) 27,32

Depreciation 105,46 107,97

Profit/(Loss) Before Taxation (558.95) (80,65)

Net Profit/(Loss) (558,95) (80,05)

Performance

During the year under review, your company achieved a sales turnover of Rs.1215 lakhs compared to the sales turnover of Rs.3406 lakhs achieved in the previous year. The steep drop in sales turnover during the current year can be attributed to non operating unit-l from November'2011 onwards mainly on account of power problems, obsolete machinery and non availability of labours. The Industry also faced severe recession during the year due to change in Government policies with respect to yarn exports which led to steep drop in yarn realization compared to increasing cotton prices and non availability of working capital. The Company made Cash loss of Rs.453 lakhs for the financial year as against the Cash Profit of Rs.27 lakhs in the previous year. The company made net loss of Rs.559 lakhs for the financial year, as against net loss of Rs.81 lakhs for the previous year. The profit was drastically affected due to steep increase in cost of raw materials and power and low production caused by shortage of working capital and stiff competition in the market.

Dividend

The Company incurred loss in the financial year. In view of this and the accumulated loss, your directors are unable to recommend any dividend for the year. Your Directors are confident that, barring unforeseen circumstances, the company will wipe out the accumulated loss in a few years and start paying dividend thereafter.

Prospects and Future Plans

The year 2011-12 was a worst year for the Textile Industry. There was steep increase in cost of raw materials and power, which mainly pushed up the production cost. Production was low due to lack of working capital and poor off take in the market caused by stiff competition. Profit dwindled and performance resulted in loss due to lower selling prices and the cumulative effect of all factors mentioned above. The Government's policy is not conducive to existence and growth of Textile Industry and the prospects are quite uncertain. Further, the existing plant and machinery of the company are old and have become less efficient, compared to new modern machines. The position and prospects of textile industry being most uncertain, it is not worthwhile replacing the existing plant and machinery with new modern machinery incurring huge cost. Your directors are, therefore, seriously contemplating to delve into new lines of activities, within the Objects of the company, so as to improve profit, for the benefit of the shareholders. At the same time, till concrete plans crystallize, your Directors will continue to run the company with the existing plant and machinery in the best possible ways so as to improve performance in the current year.

Deposits

Your company has not accepted any deposits during the period.

Directors

There was no change in the Board of Directors during the financial year.

In accordance with the provisions contained in the Articles of Association, Mr. Ashok P. Shah retires by rotation at the ensuing Annual General Meeting and, being eligible, he offers himself for re-appointment.

Directors Responsibility Statement

The Directors confirm that in the preparation of the Annual Accounts for the year ended 31st March, 2012

(i) the applicable accounting standards had been followed and there were no material departures,

(ii) the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year,

(iii) proper and sufficient care had been taken 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) the annual accounts were prepared on a 'going-concern' basis.

Corporate Governance

In terms of listing agreement with the Stock Exchange, Compliance Report on Corporate Governance is given at Annexure-ll. A certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is also placed as Annexure-lll.

Management Discussion and Analysis of the Operations

The management had a detailed discussion on the operational results for the year ended 31st March 2012 and analysed the factors that affected production, sales and profit. The management was satisfied with the efforts taken in the situation faced by the company and the adverse market conditions prevailed during the year.

Auditors

The Auditors of the Company, Messrs. Sankaran & Krishnan, Chartered Accountants, Chennai are due to retire at the ensuing Annual General Meeting of the Company. They are eligible for re- appointment. They have consented to act as the Auditors of the Company, if re-appointed.

Cost Auditors

a) Particulars of the cost auditors appointed for the Financial Year : B.Venkateshwar, Cost Auditor, 31/3E, Ramakrishna Nagar, Kavundampalayam, Coimbatore 641030.

b) Due date for filing of the Cost Audit Report: 30.09.2011.

c) Actual date of filing of the Cost Audit Report by the Financial Year 2010-2011 : 14.11.2011 Personnel

During the year under review, none of the employees of the Company was in receipt of remuneration which in the aggregate was in excess of the limits prescribed under Section 217(2A)ofthe Companies Act, 1956 and the rules framed these under.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, a statement showing details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is enclosed as Annexure - I.

Industrial Relations

The industrial relations in the Company continued to be cordial during the year.

Acknowledgement

Your Directors place on record their appreciation of the continued co-operation and unstinted support extended to the Company by the Company's customers, suppliers, employees and shareholders.

By Order of the Board of Directors

for Thambbi Modern Spinning Mills Limited

R.Jagadeesan

SALEM Chairman & Managing Director

30th May 2012


Mar 31, 2010

The Directors have pleasure in presenting their 32nd Annual Report together with Audited Accounts for the year ended 31st March 2010

Financial Results

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

2009-2010 2008-2009

Rs. in 000 Rs. in 000

Turnover 38,55,85 34,76,35

Profit before depreciation and taxation 1,20,13 2,19,58

Depreciation 64,20 45,81

Profit Before Taxation 55,93 1,73,77

Less Income Tax Paid 0 1,06

Net Profit 55,93 1,72,71

Less provision for FBT 0 1,62

Less Prior Period Expenses 0 2,13

Net Profit after Taxation and FBT Provision 55,93 1,68,96

Dividend

The Company made operating profit during the financial year. However, in view of the accumulated loss, your directors are unable to recommend any dividend for the year. Your Directors are confident that, barring unforeseen circumstances, the company will wipe out the accumulated loss in a few years and start paying dividend thereafter.

Performance

During the year under review, your company achieved a sales turnover of Rs.3856 lakhs compared to the sales turnover of Rs.3476 lakhs achieved in the previous year. The Company made Cash profit of Rs.120 lakhs for the financial year as against the Cash Profit of Rs. 220 lakhs in the previous year. The cash profit was drastically affected due to increase in cost of all inputs and also the interest.

Prospects and Future Plans

The Textile Industry faced problems on all fronts - increasing cotton prices, power shortages, and increase in cost of all essential inputs and services, stiff competition and un remunerative selling prices. All these factors made the functioning of Textile Mills more and more difficult. Your Directors are hopeful that, with the revival of the economy, the Textile Industry will fare well in the coming years.

The Indian Textile Industry is one of the largest and most important sectors in the economy of our country in terms of output, foreign exchange earnings and employment. The Profitability in textile industry is generally low (average 6.1% of sales before interest) compared to 9.5% for all industries, over the last three decades as per RBI bulletin.

The Technology Up-gradation Fund Scheme and the Technology Mission in Cotton launched by Government of India in 1999 have created a positive change for the Textile Industry. The various proactive measures introduced by the Government have given a new lease of life to the ailing Textile Industry. The recovery in the global business has also thrown opportunities to the Textile Industry Domestic market is slowly improving. There are signs that the textile industry can perform well in the coming years if the Government announces comprehensive policy on raw materials, especially fibre, export/import, cost of funding, particularly working capital, power, labour, etc. With the Industrys inherent strength and the needy supportive measures, the Indian Textile Industry could emerge as an ever shining industry in the coming years.

Deposits

Your company has not accepted any deposits during the period.

Directors

There was no change in the Board of Directors during the financial year.

In accordance with the provisions contained in the Articles of Association, Smt. Malathi Jagadeesan retires by rotation at the ensuing Annual General Meeting and, being eligible, she offers herself for reappointment.

Directors Responsibility statement

The Directors confirm that in the preparation of the Annual Accounts for the year ended 31st March, 2010

(i) the applicable accounting standards had been followed and there were no material departures,

(ii) the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made 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 the year,

(iii) proper and sufficient care had been taken 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) the annual accounts were prepared on a going-concern basis.

Corporate Governance

In terms of listing agreement with the Stock Exchange, Compliance Report on Corporate Governance is given at Annexure-ll. A certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is also placed as Annexure-lll.

Management Discussion and Analysis of the Operations

The management had a detailed discussion on the operational results for the year ended 31st March 2010 and analysed the factors that affected production, sales and profit. The management was satisfied with the efforts taken in the situation faced by the company and the adverse market conditions prevailed during the year.

Auditors

The Auditors of the Company, Messrs. Sankaran & Krishnan, Chartered Accountants, Chennai are due to retire at the ensuing Annual General Meeting of the Company. They are eligible for re-appointment. They have consented to act as the Auditors of the Company, if re-appointed.

Personnel

During the year under review, none of the employees of the Company was in receipt of remuneration which in the aggregate was in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 and the rules framed these under.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, a statement showing details of Conservation of Energy, Technology Absorption, Exports and Foreign Exchange Earnings and Outgo is enclosed as Annexure - I.

Industrial Relations

The industrial relations in the Company continued to be cordial during the year.

Acknowledgement

Your Directors place on record their appreciation of the continued co-operation and unstinted support extended to the Company by the Companys customers, suppliers, employees and shareholders.

By Order of the Board for Thambbi Modern Spinning Mills Limited

Salem R. Jagadeesan

04th June 2010 Chairman & Managing Director

 
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