Directors Report of Sri Ganapathy Mills Company Ltd.

Mar 31, 2014

LADIES AND GENTLEMEN:

The Directors present herewith their 66th Annual Report together with the Audited statement of accounts for the financial year ended 31st March 2014

GENERAL PERFORMANCE:

During the year under review, the company has achieved a turnover of Rs. 1804.55 lacs against 2149.27 lacs in the previous year and incurred a Net loss of Rs. 297.12 lacs against the Net loss of Rs. 47.18 lacs in the previous year. The poor operating results are due to poor performance of the machineries aged more than 25 years. Adding to this, volatility in the cotton market, severe power cut, has resulted low production and quality which leads to un-remunerative sales prices.

The major financial parameters are given hereunder

Rs. lacs

Description 31-03-2014 31-03-2013

Sales & Other income 1,804.55 2149.27

Operating Expenses 1707.59 1876.91

Operating Profit / Loss 96.96 272.36

Financial Expenses 162.07 148.60

Depreciation 126.45 140.55

Net Profit / Loss before VRS & exceptional items -191.56 -16.79

VRS & exceptional items 105.56 30.39

Net ( )/Profit (-) Loss -297.12 -47.18

DIVIDEND

In view of losses during the year, your directors are unable to recommend any dividend for the year ended 31 03-2014.

FUTURE PROSPECTS

Due to the proposed modernisation of spinning department, the quality and quantity of the product is expected to be improved and over heads cost will be minimized. Thereby the company is exploring the possibility taping export market as well and increase the profitability of the company.

WIND MILL

During the year under review, the 1.25 MW Wind Mill has generated 11,45,538 units, valued at Rs. 55.41 lacs as against 14,92,405 units.

RESPONSIBILITY STATEMENT

Your Directors are to state that, in the preparations of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departure. Your Directors had selected such accounting policies 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.

Your Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities.

Your Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and Analysis Report, which forms part of this report is given as an annexure to this report.

DIRECTORS

Smt. Amutha Rajendran, retire by rotation in the ensuing Annual General Meeting, being eligible she offer her selves for reappointment.

STATUTORY AUDITORS

The Company''s Statutory Auditors M/s Krishnan & Raman, Chartered Accountants retire at the ensuing Annual General Meeting. They have confirmed their eligibility for reappointment in terms of the provisions of Companies Act, 2013 and rules made there under.

The Audit Committee and the Board of Directors recommend appointment of M/s Krishnan and Raman as the Company''s Statutory Auditors for a residual period of three years from the conclusion of the ensuing Annual General Meeting. However, such reappointment is to be confirmed in every Annual General Meeting to be held thereafter on a yearly basis.

REPORT ON CORPORATE GOVERNANCE

A report on Corporate Governance is annexed herewith and it forms part of this Directors Report.

COMPANY SECRETARY

Your directors are making all efforts to appoint a company secretary with required qualification as prescribed under 203 of the Companies Act 2013.

STATUTORY INFORMATION

Energy Conservation & Technology Absorption, R & D activities and Foreign Exchange Earnings & Outgo as required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 19S8 are giver in the Annexure and form part of this report. During the period under review, none of the employees are in receipt of remuneration in excess of the limit set under section 134 of the Companies Act, 2013.

INFORMATION AS PER SECTION 134 OF THE COMPANIES ACT, 2013

Particulars required under Companies (Disclosure of particulars in the report of Board of Directors) Rule, 1988 as amended are furnished in the annexure.

OBSERVATIONS OF THE AUDITORS

With regard to the auditor''s report para no 9a in Annexure I, we wish to report that the company could not pay the provident fund and employees state insurance dues on the respective due dates regularly mainly because of the paucity of funds. We have sought the directions from the department and got the nod for payment of the arrears in installments pending approval of the higher authorities.

With respect to the opinion in the auditor''s report regarding AS 15 in respect of provisioning of gratuity, your directors are taking necessary steps to get the actuarial valuation and provisioning will be done accordingly.

ACKNOWLEDGEMENT

Your Directors express their gratitude for the wholehearted support rendered by the suppliers, The Karur Vysya Bank Ltd, NBFC''s and other Statutory Bodies in all the activities of your Compary.

The Board expresses its warm appreciation for its dedicated employees whom it considers as its valuable asset.

For and On Behalf of the Board

Date : 12.O5.2014 K.Vee.Rajenthiran Place: Sankar Nagar Chairman of the Meeting

---

Mar 31, 2012

The Directors present herewith their 64th Annual Report together with the Audited statement of accounts for the financial year ended 31st March 2012

GENERAL PERFORMANCE:

Due to severe power shortage witnessed during the year and high cotton prices without corresponding increase in the yarn realization, the capacity utilization has lower with reduced profitability. Hence, operations resulted in a net loss of Rs. 376.43 lacs.

The major financial parameters are given hereunder

Rs. lacs Description 31-03-2012 31-03-2011

Sales & Other Income 2322.83 2998.80

Operating Expenses 2379.94 2552.82

Operating Profit / Loss -57.11 445.98

Financial Expenses 136.46 169.07

Depreciation 147.33 170.84

Net Profit / Loss before VRS a exceptional items -340.90 106.07

VRS Expenditure 35.53 10.64

Net ( ) Profit / (-) Loss -376.43 95.43

Exceptional items 0.00 44.65

Net ( ) Profit/ (-) Loss -376.43 50.78

DIVIDEND

In view of losses during the year, your directors are unable to recommend any dividend for the year ended 31- 03-2012.

FUTURE PROPSPECTS

The Textile industry is going through the difficult period. But there appears to be light at the end of the tunnel. The yarn prices have started moving upwards and the cotton prices have stabilized. The demand is also improving Subject to the improvement in the power situation, the Directors hope that the current year operations will be profitable and hope to submit better results in the coming years.

WIND MILL

During the year under review, the generation of power was lower when compared with the previous year figure and generation was 11.21 lacs units, valued at 37.62 lacs.

RESPONSIBILITY STATEMENT

Your Directors are to state that, in the preparations of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departure.

Your Directors had selected such accounting policies 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. Your Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. Your Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and Analysis Report, which forms part of this report is given as an annexure to this report.

DIRECTORS

The following directors retire by rotation in the ensuing Annual General Meeting. Smt. Amutharajendran a Smt. Niranjani Kousigan Being eligible they offer themselves for reappointment.

Sri. R.P.Karthik had resigned the directorship during the year due to pre-occupation. The Board expresses its deep gratitude for the valuable services rendered by him.

Sri. E.Gabriel Jesudason, B.E., has been appointed as additional director as Non-Executive Independent with effect from 05th July 2012 and assigned to the chairman of Audit Committee and member of shareholders / Investors Grievance committee.

AUDITORS

Our Company auditors M/s Krishnan 8t Raman, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment.

REPORT ON CORPORATE GOVERNANCE

A report on Corporate Governance is annexed herewith and it forms part of this Directors Report.

COMPANY SECRETARY

Your directors are making all efforts to appoint a company secretary with required qualification as prescribed under 383 (A) of the Companies Act 1956.

STATUTORY INFORMATION

Energy Conservation a Technology Absorption, R a D activities and Foreign Exchange Earnings a Outgo as required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this report. During the period under review, none of the employees are in receipt of remuneration in excess of the limit set under section 217 (2A) of the Companies Act, 1956.

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) Rule, 1988 as amended are furnished in the annexure.

OBSERVATIONS OF THE AUDITORS

With regard to the auditor's report para no 9 in Annexure I, we wish to report that the company could not pay the provident fund and employees state insurance dues on the respective due dates regularly mainly because of the paucity of funds. We have sought the directions from the department and got the nod for payment of the arrears in installments pending approval of the higher authorities.

ACKNOWLEDGEMENT

Your Directors express their gratitude for the wholehearted support rendered by the suppliers, The Karur Vysya Bank Ltd, NBFC's and other Statutory Bodies in all the activities of your Company.

The Board expresses its warm appreciation for its dedicated employees whom it considers as its valuable asset.

MAY THE LORD GANAPATHY SHOWER HIS BLESSINGS ON THE PROSPECTS OF YOUR COMPANY IN THE YEARS TO COME

For and On Behalf of the Board

Date : 29-08-2012 (sd/-)

K.Vee.Rajenthiran

Place : Sankar Nagar Chairman of the Meeting

---

Mar 31, 2010

The Directors present herewith their 62nd Annual Report together with the Audited statement of accounts for the financial year ended 31st March 2010

GENERAL PERFORMANCE:

The performance during the year had been very encouraging. The market conditions which were very unfavourable up to Oct-Nov2009 turned for the better and early 2010 witnessed a very positive trend. The international as well as domestic markets showed strong signs of revival. However the power situation remained grim. Your company, due to optimum utilization of resources and cost effective management, could improve the productivity and profitability during the year. Due to loss on sale of investments and writing off the entire outstanding balance with M/s Auroknit Export India Ltd, as Bad debts, during the current year, the financial performance of the company resulted in a net loss of Rs. 146.50 lakhs.

The major financial parameters are given hereunder


Description 31-03-2010 31-03-2009

Sale & other income 2464.98 3056.04

Operating Expenses 2097.23 2824.92

Operating Profit 367.75 231.12

Financial Expenses 170.66 179.73

Depreciation 173.01 175.28

Net (+) Profit/(-) loss before VRS & exceptional items 24.08 -123.89

VRS Expenditure 2.63 2.63

Net (+) Profit / (-) loss before exceptional items 21.45 -126.52

Exceptional items 167.95 0.00

[Net (+) profit/ (-) Loss j -146.50 -126.52

DIVIDEND

In View the losses the Directors are not recommending any dividend during the year.

BONUS SHARES:

In order to reward the shareholders on completion of 62 glorious years of your Company, your Directors decided to issue Bonus Shares in the ratio of one equity share for every one equity share held in the Company.

FUTURE PROPSPECTS

The outlook for the current year continuous to be upbeat with both international and domestic markets showing good and robust demand growth. The international rupee parity is also favaourable and with a bright cotton crop anticipated during the current year the textile industry is expected to do well in the coming years. Your directors are taking steps to maximize the capacity utilization and timely and economic raw material procurement to enhance the profitability.

WIND MILL

The company has installed 4 Nos. of 1.00 MW Wind Mills at a project cost of Rs.450 lacs during the year 2006. The overall production on the wind mills during the year was 14.39 units. The income generated from wind mill operations was excellent when compared with previous year. During the current year it was amounted to Rs. 43.62 lacs.

RESPONSIBILITY STATEMENT

Your Directors are to state that, in the preparations of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departure.

Your Directors had selected such accounting policies 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.

Your Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

Your Directors had prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and Analysis Report, which forms part of this report is given as an annexure to this report.

DIRECTORS

The following directors retire by rotation in the ensuing Annual General Meeting.

1. Smt. Niranjani Kousigan 2. Sri. D.Anand Samuel.

Being eligible they offer themselves for reappointment.

AUDITORS

Our Company auditors M/s Krishnan St Raman, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment.

REPORT ON CORPORATE GOVERNANCE

A report on Corporate Governance is annexed herewith and it forms part of this Directors Report.

REPORT ON SECRETARIAL COMPLIANCE

A report on Secretarial Compliance under section 383 (A) of the Companies Act, 1956 is obtained.

STATUTORY INFORMATION

Energy Conservation 6t Technology Absorption, R ft D activities and Foreign Exchange Earnings 6t Outgo as required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this report. During the period under review, none of the employees are in receipt of remuneration in excess of the limit set under section 217 (2A) of the Companies Act, 1956.

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) Rule, 1988 as amended are furnished in the annexure.

ACKNOWLEDGEMENT

Your Directors express their gratitude for the wholehearted support rendered by the suppliers, The Karur Vysya Bank Ltd, NBFCs and other Statutory Bodies in all the activities of your Company.

The Board expresses its warm appreciation for its dedicated employees whom it considers as its valuable asset.

MAY THE LORD GANAPATHY SHOWER HIS BLESSINGS ON THE PROSPECTS OF YOUR COMPANY IN THE YEARS TO COME

For and On Behalf of the Board

(sd) K.Vee.Rajenthiran Chairman of the Meeting

Date : 23-08-2010 Place: Sankar Nagar