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21st ANNUAL REPORT

21st Annual Report

2012

Terry gold (India) Limited

TERRYGOLD (INDIA) LIM

21st Annual Report

2012-2013


ERRYGOLD (INDIA) LIMITED

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21st Annual Report


21st ANNUAL REPORT TERRYGOLD (INDIA) LIMITED

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BOARD OF DIRECTORS

SRI. G. VENKATARATHNAM Director

SRI NEELAM SRI RAMULU Director

SRI S.S.R. KISHEN Managing Director

REGISTERED OFFICE

4th Floor, H.No. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad 500 004

FACTORY

Survey No. 391, 392

Pedakaparthy (Village)

Chityal (Mandal)

Nalgonda District,

Andhra Pradesh.

AUDITORS

C. Ramachandram & Co., Chartered Accountants, 606, 3-6-237,Lingapur La Builde Complex, Himayat Nagar, Hyderabad - 500 029

BANKERS

State Bank of Hyderabad,

Overseas Branch,

Somajiguda, Hyderabad.


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NOTICE NOTICE of the 21st Annual General meeting of the members of TERRYGOLD (INDIA) LIMITED to be held on Saturday,, the 28th September 2013 at 10.00 a.m. at Regd. Office 4th Floor, 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad 500 004, A.P to transact the following business:

ORDINARY BUSINESS

(1) To receive, consider and adopt the audited Balance Sheet as at 31.03.2013 and the

statement of Profit and Loss Account for the year ended on that date along with Directors and Auditors reports thereon.

(2) To appoint a director in place of Sri. G. Venkataratnam who retires by rotation and being eligible offers himself for reappointment.

(3) To appoint Auditors and fix their remuneration M/s C. Ramachandram & C0, Chartered Accountants, Himayat Nagar Hyderabad, the Auditors of the Company retire at this meeting and are eligible for re-appointment.

SPECIAL BUSINESS:

1. To consider and, if thought fit, to pass, with or without modification, the following resolution as a Special Resolution.

RESOLVED THAT in accordance with the provisions of Sections 269, 309, 311 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII thereto, the consent is hereby accorded to the re-appointment of Mr. S S R Kishen as Chairman-cum-Managing Director of the Company, who shall not be liable to retirement by rotation for a period of Five years with effect from 26th August, 2013 without any remuneration. Further resolved that the Board of Directors be and is hereby authorized to take all such steps as may be necessary, proper and expedient to give effect to the above Resolution.

By Order of the Board

SSR Kishen Chairman & Managing Director

Place: Hyderabad Date: 02.09.2013

Notes: (a) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to

attend and vote on his behalf, and the proxy need not be a member. (b) The proxy form should be deposited at the Registered Office of the Company at least

48 hours before the meeting.


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(c) The Register of Members and Share transfer books will remain closed from 26th September 2013 to 28th September 2013 (both days inclusive)

(d) Explanatory Statement pursuant to section 173 (2) of the Companies Act 195annexed as the Board of Directors of the company reappointed Mr. S S R Kishen as Chairman-cum-Managing Director w.e.f 26.08.2013 on expiry of his tenure. Hence the resolution as mentioned in item No.4 proposed for seeking the Member’s approval for the said resolution. None of the Directors of the company concerned or interested in this resolution.



Place: Hyderabad Date: 02.09.2013


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Annexure to the Notice of the 21st Annual General Meeting

EXPLANATORY STATEMENT

Item No.5 As the earlier term of Mr. S S R Kishen as Chairman-cum-Managing Director came to an end on 25th August, 2013, he was re-appointed by the Board for a further period of Five years with effect from 26th August, 2013 without any remuneration. The said appointment requires the approval of the members, inter-alia, Section 269 read with other applicable Sections and Schedule XIII to the Companies Act, 1956. Your Directors commend the Resolution for approval of the shareholders. Accordingly, the Special Resolution under item No.5 of the Notice is submitted to the shareholders for approval.



Place: Hyderabad

Date: 02.09.2013


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DIRECTORS’ REPORT

Dear Members,

The Directors are pleased to present the 21st Annual Report together with the audited Balance Sheet, Statement of Profit and Loss Account and Auditors’ Report for the year ended 31st March 2013.

FINANCIAL RESULTS Rs. In Lakhs

Year ended March 31 2013 2012

Total Revenue 8.67 Nil

Operating, Financial & Other Expenses 6.23

0.79

Loss before Depreciation, Interest and Non-Cash Charges 6.23 0.79

Depreciation & Non-Cash Charges 0 0.00

Interest 0 0.00

Net Loss 6.23 0.79

Operations

As you are aware that the Terry Towel products basically belong to the group of pile fabrics,

wherein additional loose (with lesser tension) yarn is introduced to form loops called as piles to

give a distinct appearance and effect. In the present age, pile formation is microprocessor

controlled with high level of accuracy and distinct features. Towels are subject to changing

fashion and demand new designs with different fabric finish, loop pile and flat structures that are

manufactured on the improved equipment with use of new-age computer based technology of

toweling with 100% Cotton Absorbent Long Looped perfect towels. The capital goods have been

imported from Japan and backed by State-of-Art technology and commenced the commercial

production in 1996 with an Operating Capacity of 800 M T per Annum. We have such strengths

to meet such a wide verity of product range to meet the increasing demands apart from an item of

personal use and in the institutional market such as Hotel Industry, Hospitals, Holiday Homes

Restaurants etc., The Company had suffered a major Fire Accident during August 2000 that

destroyed the Stock and Assets and the Insurance Company repudiated the claim of the Company

for Rs.242.71 Lakhs that had resulted into a major cash crunch. The net worth of the company as

on March 31, 2000 became negative and the Hon’ble BIFR had declared Company as Sick

Industrial unit and registered the Case No.210/2000 on 02.03.2001 and appointed IDBI as


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operating Agency for formulating a rehabilitation package keeping in view the provisions of

Section 18 of the SICA Act. The unit is not operational since December 2004.

Till last decade, Indian terry towel industry was dominated by decentralized Handloom and

Power-loom sectors of Panipat, Karur, Erode, Mumbai, Sholapur, Ahmedabad and Delhi

constituting the share of over 80% of the total production of Towel Industry. But, for the last 10

years, many of the organized sectors have entered in this segment. Organized Sectors are mainly

moving from mid low end to mid high end market whereas decentralized Sholapur, Panipat are

concentrating more on low end and domestic market. Some of the high quality power loom

fabrics from decentralized sectors are being slowly accepted in leading markets of USA and EU.

Many of the Indian companies are also expected to enter in the World Market predominantly

through acquisition and branding with this segment in the years to come. The estimated annual

production terry towels are 100,000 tons and will likely to go up to 115,000 tons with ongoing

expansion in the country.

Revival Efforts

The Company is having two Secured creditors being IDBI & State Bank of Hyderabad. IDBI had

assigned its debit to SASF, Mumbai. SBH has assigned its debt to ASREC India Ltd.. On the

confirmation of Assignment of Debit by SBH in favour of ASREC (India) Ltd (ASREC) the

Company had reached an OTS with Deutsche Bank being the Attorney holder of ASREC on

02.03.2007 for full & final settlement of dues. The Company had also reached a Settlement OTS

with the other secured being SASF (IDBI) on 18.06.2007. The issues related to the Charged

Documents are needed to be sorted-out as the investors identified by the promoters are willing to

infuse the funds as they are keen to revive the unit as the envisaged arrangement has a firm back

arrangement of the entire production.

The Secured Creditors were appraised on the present agitated political situation on Telangana

and no new investment is taking place in this sector as nobody is willing to lock-up funds and

wait for protracted legal battle as permission by the BIFR was made available to the secured

creditors to pursue its recovery suits. This being considered favorably by Hon’ble AAIFR and

stayed the impugned order of BIFR. Your Directors are fully confident to resolve the pending

issues and revive the operations shortly. Pending finalization of issue of charged documents, no

interest was provided on principal outstanding loans for the year under review.


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Future Prospects

The usage of towels in domestic market is constantly increasing with the expansion of hospitality

services and opening of Trade Centers and Malls. The Market for Terry Towel has been growing

rapidly. The Indian domestic Textiles industry is worth Rs.1,75,000 Crore. The Terry Towel

Sector is zooming with the new EXIM Policy and increase in demand from US Markets. USA is

the World’s single largest buyer for Made-ups and Terry Towels. India, China and Pakistan

together supply 65% towels, 81% of sheets and 79% of comforters imported by USA. While

India has a dominant position in America’s terry towel import with a share of around 26%,

India’s home textile contributes around 22% i.e. US $ 4.1 billion to India’s textile export of US $

19 billion. However, the share of terry towel is just 5.8% of total home textile export i.e. US $

255 million in 2005-06 and US $ 239 million in 2006-07, and there is a room to grow. Till recent

time, marketing effort was concentrated in USA, but many are looking for other markets of the

EU and other parts of the World. In view of this the Company is confident of serving new

markets with higher profitability on its revival.

Public Deposits:

Your Company has not accepted deposits from the public during the year under review and there

are no outstanding deposits as on 31st March 2013.

Personnel:

There are no employees drawing remuneration as provided in section 217 (2A) of the Companies

Act, 1956 whose particulars forming part of this report is to be annexed.

Auditors

M/s C. Ramachandram & Co., Chartered Accountants retire at the conclusion of the ensuing

Annual General Meeting and are eligible for reappointment.

Audit Committee

The audit committee consists of two independent Directors viz., G. Venkataratnam, Sri Neelam

Sriramulu and Sri S.S.R.Kishen. The audit committee met four times during the year and

recommended the accounts for approval by the Board.


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Directors’ Responsibility Statement:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect

to Directors’ Responsibility statement, it is hereby confirmed:

1) That in the preparation of the accounts for the financial year ended 31st March, 2013

the applicable accounting standards have been followed along with proper explanation

relating to material departure;

2) That the Directors have selected such accounting policies and applied them

consistently and made judgments and estimates that were reasonable and prudent so as

to give a true and fair view of the state of affairs of the company at the end of the

financial year and of the loss of the company for the year under review.

3) That the Directors 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.

4) That the Directors have prepared the accounts for the financial year ended 31st March

2013 on a going concern basis.

Listing

The shares of the company are listed on Hyderabad, Madras and Bombay Stock Exchanges. The

Listing fee to Bombay Stock Exchange from 2001-02, the Hyderabad Exchange from 2000-01

and Madras Stock Exchange from 1997-98 is outstanding.

Conservation of Energy, Technology Absorption, Foreign Exchange:

Particulars required to be disclosed under the Companies (Disclosure of Particulars in the Report

of Board of Directors) Rules 1988 are annexed hereto.

Corporate Governance:

The report on Corporate Governance is enclosed as an Annexure to this report.


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PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND

OUTGO

There was no Foreign Exchange Earnings or outgo during the period under review.

II. Statement containing particulars pursuant to Companies (Disclosures of Particulars in

the Report of Directors) Rules, 1988 and forming part of Directors Report.

Since there were no operations in the unit during the period under review, there were no

Particulars under this item.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and

cooperation extended by industrial Development Bank of India (SASF-Cell), State Bank of

Hyderabad, ASREC (India) Ltd. and their nominees and other Central and State Government

Agencies. Your Directors also wish to place on record their sincere appreciation to the

shareholders for their continued confidence, patronage and support to the management of the

Company. For and behalf of the Board Place: Hyderabad S.S.R.KISHEN Date: 02.09.2013 Chairman and Managing Director


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ANNEXURE TO THE DIRECTORS’ REPORT Particulars required under the companies (Disclosure of particulars in the report of Board of Directors) Rules 1988. Since there was no activity in the unit during the year under review there are no particulars under this item.

REPORT ON CORPORATE GOVERNANCE

(Pursuant to clause 49 of Listing Agreement)

1. Philosophy Company’s Philosophy on Corporate Governance is to attain fairness, transparency, accountability, commitment and quality in all its relationships with shareholders customers, Government, lenders and Public at large. The Company will strive to improve these qualities as a continuous process. 2. Composition of Board of Directors During the period under review there were three directors on the Board of your Company of which one is an Executive Promoter Director and two are non-executive Independent Directors as detailed below: 1. Executive Director Promoter : Sri. S.S.R. Kishen 2. Non Executive Directors

Independent: Sri. G. Venkataratnam Independent: Sri. N. Sriramulu

Attendance of each Director in Board Meetings and Last AGM Board Meetings

Name of Director No. of Meetings held

Meetings attended

Attendance at previous AGM

Sri. S.S.R. Kishen 5 5 Yes

Sri. G. Venkataratnam 5 5 Yes

Sri. N. Sriramulu 5 5 Yes


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During the year under review, five Board meetings were held on 17.08.2012, 27.10.2012, 28.01.2013, 30.4.2013, 14.08.2013. Number of other Directorships and Board Committees in which he is a member or Chairman:

No. of other Memberships of Boards No. of other memberships of Committees

Name of Director As Chairman As member As Chairman As member

Sri. S.S.R. Kishen 1 1 0 2

Sri. G. Venkataratnam 0 0 1 2

Sri. N. Sriramulu 0 0 1 2

3. Audit Committee

The Audit Committee meeting the requirements of section 292A of the Companies Act, 1956 and Clause 49 of the listing Agreement constitutes of Sri. G. Venkataratnam, Sri. Neelam Sriramulu and Sri S.S.R.Kishen, the majority of whom are Independent Directors. The Audit Committee met four times during the year under review, and un-audited results declared were NIL as the company was under BIFR and there were no activities and has approved the annual accounts of the year ended 31st March, 2013 . 4. SHARE HOLDERS / INVESTORS GRIEVANCE COMMITTEE

The Shareholders & investor grievance committee, constituted by Sri. G. Venkataratnam, Sri. Neelam Sriramulu and Sri S.S.R.Kishen the majority of whom are Independent Directors. The Managing Director personally supervises the Share Transfers and correspondence of the Share holders. The Company has received 5 complaints / letters during the financial year from the Share holders and the same were replied to their satisfaction. There were no requests pending for dematerialization as on 31.03.2013. 5. REMUNERATION OF DIRECTORS

No remuneration was paid to the Managing Director during the year under review. Similarly no remuneration was paid to the non-executive Directors during the financial year 2012-13 6. ANNUAL GENERAL MEETINGS

Details of the past three AGMs held are given below:

Financial year (ended) Date Time Venue

31-Mar-12 30.09.2012 10.am 4th Floor, H No.6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad. – 500 004




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7. DISCLOSURES

There was no occasion to pass special resolutions through postal ballot on any of the matters specified under clause 49 of the Listing Agreement. During the last three years there were no strictures imposed on the Company by the stock exchange or SEBI or any statutory authority on any matter related to capital markets. Listing Fee is pending to be paid to Bombay Stock Exchange from 2001-02, Hyderabad Stock Exchange from 2000-01 and Madras Stock Exchange from 1997-98.

8. MEANS OF COMMUNICATION

The quarterly financial results were not published in any newspaper during the year due to financial stringency. The un-audited quarterly results have been “Nil” in view of disbanding of the unit as a sick unit and no financial, productive business activities took place during the year under review. 9. MANAGEMENT DISCUSSION & ANALYSIS

The Company has been under the purview of BIFR ever since it was declared a sick unit in 2000-01 in Case No.210/2000. The Company remained non-operational since December 2004 and is in the process of reaching a fresh OTS with both the secured creditors and is in the process of submitting a viable revival proposal to the BIFR and to the OA. 10. INTERNAL CONTROL SYSTEM

The company had adequate Internal Control Systems commensurate with the size and nature of its business against theft, misuse and loss.

11. GENERAL SHAREHOLDERS INFORMATION

(a) 21st AGM Date: 28-9-2013 (b) Day: Saturday, (c) Time: 10.00 am (d) Venue: At 4th Floor, H.N 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad 500

004 (e) Financial Calendar: 1st April to 31st March (f) Date of Book Closure: 26.09.2011 to 27.09.2011 (g) Regd. Office & Admn. Office: 4th Floor, H.N 6-2-966/5/1, Hill Colony,

Khairatabad, Hyderabad 500 004 (h) Plant location: Survey No. 391, 392 Pedakaparthy (Village) Chityal (Mandal)

Nalgonda District, Andhra Pradesh (i) Listing of shares: Mumbai stock exchange, Madras stock exchange, Hyderabad

stock exchange. (j) Scrip code no.: BSE 514478 (Mumbai – trading suspended)


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(k) Address for Registrar and Share Transfer Agents for Demat Services: Venture Capital & Corporate Investment Limited H.No12-1-0134 (MIG-134),2nd Floor Bharath Nagar Colony, Hyderabad-500 018. Physical Shares (in house): TERRYGOLD (INDIA) LIMITED, 4th Floor, H.N 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad 500 004

(i) Un-audited Results: Qtr. Ended 30.06.2012,30.09.2012, 31.12.2012, 31.03.2013 21th AGM for 2011-2012 in September 2012 (l) Distribution of share holding as on 31-03-2013

Equity Shares No. of Shareholders % No. of Shares held %

01-500 20,765 95.63 25,05.800 19.06

501-1000 448 2.06 3,93,300 3.43

1001-2000 246 1.13 4,05,800 3.65

2001-3000 102 0.47 2,63,400 2.37

3001-4000 22 0.1 82,200 0.74

4001-5000 40 0.18 1,89.400 1.71

5001-10,000 48 0.22 3,64,900 2.96

10001 & above 34 0.33 46,97,100 65.75

Total 21,067 100 1,11,01,900 100

(m) Shareholding pattern as on 31.03.2013

Particulars No. of Shares Held %

Indian Public 4136200 37.26

Indian FI 641100 5.77

Mutual Funds, Banks 29,400 0.26

Foreign Collaborators (NRI) 2952798 26.60

Promoters 3342402 30.11

Total 11101900 100.00

(n) Dematerialization of Shares: The Shares of the Company are compulsorily under

Demat from by all categories of investors. (o) Address for correspondence: Shareholders can correspond at the registered office

of the Company at Hyderabad for all queries, share transfers and others.

CEO’s Compliance Certificate on Code of Conduct Declaration by the Director under Clause 49 of the Listing Agreement I, S.S.R.Kishen, Managing Director of Terrygold (India) Limited hereby declare that all the members of the Board of Directors and Senior Management personnel have affirmed compliance with the Code of Conduct for the year ended 31st March, 2013 . Place: Hyderabad S.S.R.Kishen Date: 02.09.2013 Managing Director


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AUDITOR’S CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE

GOVERNANCE To The Members TERRYGOLD (INDIA) LIMITED We have examined the compliance of conditions of corporate governance by TERRYGOLD (INDIA) LIMITED for the year ended 31-03-2013 as stipulated in clause 49 of Listing Agreement of the said company with Stock Exchanges. The compliance of conditions of corporate governance is the responsibility of the management. Our examination has been in the manner described in the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India and has been limited to a review of the procedures and implementation thereof, adopted by the company for ensuring compliance with conditions of Corporate Governance as stipulated in the said Clause.. It is neither an audit nor an expression of opinion on the financial statements of the Company. We certify that the company has complied with the conditions of Corporate Governance to the extent indicated only in the report and has not fully complied with the stipulations of the Listing Agreement. On the basis of our verification and as certified by the compliance officer we have to state that no investor grievances were remaining unattended/pending for more than thirty days. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.

For C. RAMACHANDRAM & CO., Chartered Accountants

FRN:002864S Place: Hyderabad Date: 02.09.2013

C. RAMACHANDRAM Partner

MembershipNo.025834


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INDEPENDENT AUDITORS’ REPORT To, The Members,

TERRYGOLD (INDIA) LIMITED.

Report on the financial statements

We have audited the accompanying financial statements of TERRYGOLD (INDIA)

LIMITED. which comprise the Balance Sheet as at March 31, 2013, and the Statement of

Profit and Loss for the year ended, and a summary of significant accounting policies and

other explanatory information.

Management’s responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give

a true and fair view of the financial position, financial performance of the Company in

accordance with the Accounting Standards referred to in sub-section (3C) of section 211

of the Companies Act, 1956 ( ‘the Act”). This responsibility includes the design,

implementation and maintenance of internal control relevant to the preparation and

presentation of the financial statements that give a true and fair view and are free

from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our

audit. We conducted our audit in accordance with the Standards on Auditing issued by the

Institute of Chartered Accountants of India. Those Standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement. An audit involves

performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal

control relevant to the Company’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances.


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An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of the accounting estimates made by management, as well as evaluating

the overall presentation of the financial statements. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to

the explanations given to us, the financial statements give the information

required by the Act in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at

March 31, 2013; and

ii. in the case of Statement of Profit & Loss, of the Loss for the year ended on that

date.

Emphasis of Matter

a) The company has not provided depreciation on fixed assets during the

year under review. Due to such non provision, loss for the current

financial year has been understated by Rs.10,632,727/- and the accumulated

losses of the company are lower by that amount consequently the value of

the net block of the fixed assets has been overstated by an amount of

Rs.10,632,727/- as on the date of the balance sheet (Refer Note No.8 of

Financial Statements)

b) The company has also not provided interest on secured creditors from

01.04.2005 to 31.03.2013 since reached One Time Settlement with them

(Refer Note No.4 of Financial Statements)


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Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order,2003(“the Order”) issued by the

Central Government of India in terms of sub-section (4A) of section 227 of the Act, we

give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the

Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books;

c) The Balance Sheet and statement of accounts dealt with by this report are in

agreement with the books of account;

d) In our opinion, the Balance Sheet and statement of accounts dealt with by this

report comply with the Accounting Standards referred to in sub-section (3C) of

section 211 of the Companies Act, 1956.

e) On the basis of the written representations received from the Directors, as on

March 31, 2013 and taken on record by the Board of Directors, we report that

none of the Directors is disqualified as on March 31, 2013 from being appointed

as a Director in terms of clause (g) of sub-section (1) of section 274 of the

Companies Act, 1956;

For C RAMACHANDRAM & CO Chartered Accountants FRN:002864S

C. RAMACHANDRAM

Partner

Membership No. 025834

Place : Hyderabad

Date: 02.09.2013


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C.RAMACHANDRAM & CO., Chartered Accountants

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements

of our report of even date to the members of TERRRYGOLD (INDIA) LIMITED on the

financial statements for the year ended 31st March, 2013

1. a) The Company has maintained fixed assets register. We are informed that the fixed assets

register is being updated.

b) As explained to us, the fixed assets have not been physically verified by the management.

The discrepancies between book records and physical verification, if any, will be

reconciled after updating work is complete.

c) In our opinion, the company has not disposed off substantial part of fixed assets during the

year and the going concern status of the company is not affected.

2 The company is not in operation since December, 2004 and hence there is no Inventory.

3. a) The Company has not granted any loans, secured or unsecured to the companies, firms or

other parties covered in the register maintained U/s.301 of the Companies Act, 1956.

Clauses (b), (c) & (d) are not applicable to the Company.

b) The Company has taken unsecured loan from one party covered in the register maintained

under section 301 of the Companies Act, 1956. The maximum amount involved during

the year was Rs.NIL- and the year end balance of loan taken from such party was

Rs.11, 580,074

c) In our opinion, the rate of interest and other terms and conditions of such loans are not

prima-facie prejudicial to the interest of the company.

d) The loan is repayable on demand.

4. In our opinion and according to the information and explanations given to us, there is

adequate internal control system commensurate with the size of the Company and the

nature of its business with regard to purchases of inventory, fixed assets and with regard to

the sale of goods. During the course of our audit, we have not observed any continuing

failure to correct major weaknesses in internal system.

5. In our opinion and according to the information and explanations given to us, there are no

contracts or arrangements referred to in section 301 of the Companies Act 1956, which

need to be entered in the register required to be maintained under that section.


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6. The Company has not accepted any deposits from the public within the meaning of

Sections 58-A and 58AA or any other relevant provision of the Companies Act 1956 and

the rules framed there under.

7. Since the company is non-operational the internal audit system is not in place.

8. According to the information and explanation given to us, the particulars of un-disputed

amounts payable in respect of income tax, wealth tax, sales tax, excise duty and other

statutory dues, which were in arrears for over six months as on March 31, 2013 are as

follows:

Nature of Dues Amount in Rs.

Bonus payable under the Payment of the Bonus Act, 1965, outstanding from 2001-02

647,674

Panchayat tax payable from March 2002 69,000

Excise duty payable 904,760

9. In our opinion, the accumulated losses of the company are more than 50% of its net worth.

The Company has incurred cash losses during the financial year covered by audit and for the

immediately preceding financial year.

10. According to the records of the Company examined by us and the information and

explanation given to us, the Company has reached One Time settlement with both the secured

creditors.

11. The Company has not granted any loans and advances on the basis of security by way of

pledge of shares, debentures and other securities.

12. In our opinion, the company is not a chit fund or a Nidhi mutual benefit fund/society.

Therefore, the provision of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003

are not applicable to the company.

13. In our opinion, the company is not dealing in or trading in shares, securities debentures and

other investments. Accordingly, the provisions of clause 4(xiv) of the Companies

(Auditor’s Report) Order, 2003 are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us the company

has not given any guarantee for loans taken by others from banks or financial institutions

during the year.

15. The Company has not raised any new terms loans during the year.

16. According to the information and explanations given to us and on an overall examination of

the balance sheet of the Company, we report that no funds raised on short-term basis have

been used for long-term investment.


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17. The Company has not made any preferential allotment of shares to parties and companies

covered in the register maintained under section 301 of the Act during the year.

18. The Company has not issued any debentures during the year.

19. The Company has not raised any money by way of public issue during the year.

20. In our opinion and according to the information and explanations given to us, no fraud on

or by the Company has been noticed or reported during the year that causes the financial

statement to be materially misstated.

For C.RAMACHANDRAM & CO., Chartered Accountants FRN:002864S

C.RAMACHANDRAM Partner Membership No.025834

Place: Hyderabad. Date: 02.09.2013


22

Terrygold (India) Limited

Balance Sheet as on 31.03.2013

Particulars Notes 31 March, 2013 31 March, 2012

` `

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 3 111,019,000 111,019,000 Reserves and Surplus 4 (811,966,287) (812,210,611)

(701,947,287) (701,191,611) SHARE APPLICATION MONEY 1,500,000 1,500,000

Non-current liabilities

Long-term borrowings 5 809,136,055 809,136,055 Trade payables 6 11,572,128 11,572,128

Other long-term liabilities 6 17,794,619 18,089,551

838,502,802 838,797,734 Current liabilities

Other current liabilities 7 61,798 33,708

61,798 33,708

TOTAL 139,117,313 139,139,831

ASSETS

Non-current assets

Fixed assets

Tangible assets 8 135,128,823 135,294,655

CWIP 9 1,639,117 1,639,117 Long-term loans and advances 10 1,120,855 1,120,855

Trade receivables 11 1,080,872 1,080,872

138,969,667 139,135,499

Current assets

Cash and bank balances 12 40,112 4,332

Other current assets 13 107,534

147,646 4,332

TOTAL 139,117,313 139,139,831

The accompanying notes are an integral part of the financial statements For and on Behalf of the Board As per our report of even date

For C.RAMACHANDRAM &CO., S.S.R KISHEN Chartered Accountants FRN: 002864S

CHAIRMAN & MANAING DIRECTOR

C.RAMACHANDRAM N SRIRAMULU Partner Membership No. 025834

DIRECTOR

Place : Hyderabad Date: 02/09/2013


23

Terrygold (India) Limited

Statement of Profit & Loss for the year period ended 31-03-2013

PARTICULARS

Note no. 31 March, 2013 31 March, 2012

` `

Continuing operations

Income

Revenue from Operations (gross) - -

Less: excise duty - -

Revenue from operations(net) - -

Other income 14 867,803 -

Total Revenue (I) 867,803 -

Expenses: Employee benefits expenses - -

Other expenses 15 623,479 61,183

Exceptional items - 24,271,255

Total (II) 623,479 24,332,438

Earning before interests. Tax, depreciation and amortization

(EBITDA) (I-II)

244,324 (24,332,438)

Profit/(loss) before tax 244,324 (24,332,438)

Tax expenses Deferred tax - -

Profit/(loss) for the year from

continuing operations (A) 244,324 (24,332,438)

Earnings per equity share(nominal

value of share Rs.10/- (31 March,

2011:Rs.10/-)

0.22 (2.195)

As per our report of even date For C.RAMACHANDRAM &CO Chartered Accountants FRN: 002864S

For and on Behalf of the Board

S.S.R.KISHEN CHAIRMAN &MANAGING DIRECTOR

C.RAMACHANDRAM Partner Membership No. 025834 Place: Hyderabad, Dt:02/09/2013

N.SRIRAMULU DIRECTOR


24

Notes forming part of the Accounts for the year ended March 31, 2013

1. Significant Accounting Policies:

a. Method of Preparation of accounts:

Accounts are prepared on historical cost convention, in accordance with the normally

accepted accounting principles.

b. Fixed Assets:

Fixed assets are stated at their original cost of acquisition, including taxes, freight and other

incidental expenses incurred in connection with the erection / commissioning / construction

of the said assets, less accumulated depreciation.

c. Inventories:

Inventories are valued at cost or net realizable, whichever is lower.

d. Depreciation:

Depreciation is computed on straight-line basis in accordance with the provisions of Schedule

XIV to the Companies Act, 1956.

2. The Company is a Sick unit and is before the Hon’ble BIFR in Case No.210/2000. The

company has reached OTS with both the secured creditors and submitted a viable revival

proposal to the Hon’ble BIFR.

3. Pending finalization of one time settlement with banks no interest was provided on principal

outstanding loans from 01.04.2005 to 31.03.2013.

4. Claims not accepted as debt by the company and pending in courts / appeals.

a) Liability if any on alleged sale and leaseback transaction.

b) Appeals against the Arbitration awards and Decreetal orders of the Learned Single Judge

are pending before the Division Bench in the High Court Judicature at Madras

c) Claim of Central Excise Department amounting to Rs.25.74 Lakhs pending in appeal.


25

5. The Company declared a Lay-Off with effect from December 06, 2004. Pending final

settlement, no provision has been made in the books of account for terminal benefits like

gratuity, bonus and leave encashment.

6.

a) The term Loans from Industrial Development Bank of India and State Bank of Hyderabad

are secured by joint equitable mortgage of land and buildings, hypothecation of plant &

machinery and other movable assets, excluding book debts, and on the personal guarantee

of some of the directors of the Company.

b) The working capital loans from State Bank of Hyderabad are secured by a first charge on

all goods, book debts and movable assets of the Company and on the personal guarantee

of some of the directors. The working capital term loan is secured by a second charge on

the fixed assets of the Company.

c) SASF Cell (IDBI had accepted the OTS Proposal of the Company on 18.06.2007 and also

had accepted the down payment of Rs.15.00 Lakhs arranged by the Company. As such,

the Company has not provided compound and penal interest on term loan for the year

under review.

d) Reportedly SBH has assigned its debt to ASREC India Ltd. on 07.11.2006. Deutsche

Bank being the power of attorney holders of ASREC had reached OTS with the Company

on 02.03.2007. As such, the Company has not provided compound and penal interest on

term loan from SBH for the year under review.

6. Redundant fixed Assets of Rs.96.19 Lakhs (approx) have been given to another EOU, after

obtaining permissions from VEPZ / Central Excise authorities, on a returnable basis without

any rental charges.

a) Claims made by the Company

b) Claim filed by the Company against the Revenue Divisional Officer, Nalagonda under

National Highway Act 1956 US 3(a), 3(d) and 3(b) is pending for finalization.

7. No confirmations have been obtained for sundry creditors, debtors and other balances

outstanding.


26

8. As regards to the compliance of provision relating to the dues to the small scale industries in

terms of companies (Amendment) Act, 1999 the company has sent letters to the creditors to

confirm whether they are SSI Units. The company is yet to receive the confirmations from

them. Hence, the company could not quantify the dues, if any, to the small-scale industries/

ancillary undertakings.

9. The company has not made any related party transaction during the Financial Year under

review. However the Outstanding balance of un-secured loan taken from the Managing

Director as at March 31, 2013 was Rs.11,501,829

10. Segment Reporting: The Company has not performed any operations during the year under

review and hence Segment Reporting is not applicable.

11. Earnings Per Share: The Company has incurred Profit of 244324 /- during the year under

review and hence EPS is 0.022

12. Deferred taxation:

Even though, the company has unabsorbed depreciation, carry forward of losses and

adjustments under section 43 B of Income tax Act, 1961 deferred tax asset as per the

Accounting Standard - 22 " Accounting for taxes on income" issued by the Institute of

Chartered Accountants of India, has not been recognized in the Books of account as the

company is 100% EOU and eligible for tax exemption u/s 10A of income tax Act, 1961 and

also generation of sufficient taxable income in near future is uncertain. In view of the appeal

preferred against the order of BIFR as detailed in Note No. 2 and also considering the fact

that deferred tax assets are more than the deferred tax liabilities, no provision has been made

in respect of deferred tax liability. Taking a more prudent view deferred tax assets have not

been recognized in the books of account.

13. Additional information pursuant to the provisions of Paragraphs 3 & 4 of Schedule VI to the Companies Act, 1956:

a. Licensed capacity 1125 MT of Terry Towels/annum

b. Installed capacity 1100 MT of Terry Towels/annum

Quantity (Kgs) Value in (Rs.)

c. Opening stock Nil Nil

d. Production Nil Nil

e. Turnover (net of returns) Nil Nil

f. Closing stock Nil Nil

g. Consumption of raw material Nil Nil


27

14 Professional charges include payments to Statutory Auditors as under:

For Statutory Audit Rs.28090

15. Additional information pursuant to the provisions of Paragraphs 3 & 4 of Schedule VI to the Companies Act, 1956.

16. Previous year's figures are rearranged or regrouped wherever necessary.

17. As there was no production ability no depreciation is charged for the year

18. Signatures on Schedules 1 to 11

As per our report of even date attached

For C Ramachandram & Co For and on behalf of the Board Chartered Accountants FRN:002864S

C. Ramachandram N.SRIRAMULU S.S.R.KISHEN

Partner Director Managing Director

Membership No.025834

Place: Hyderabad

Date : 02.09.2013


28

3. Share Capital

Particulars

31 March, 2013 31 March,

2012

Rs Rs

Authorized shares

11,500,000 (31 March 2012: 11,500,000) equity shares of

Rs.10/- each

115000000 115000000

Issued, subscribed and fully paid-up shares

11,101,900 (31 March 2012: 11,101,900) equity shares of

Rs.10/- each 111,019,000

111,019,000

Total issued, subscribed and fully paid-up share capital 111,019,000 111,019,000

a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity shares

Particulars

31 March,

2013

31 March,

2013

31 March,

2012

31 March,

2012

No of shares Amount in Rs. No of shares

Amount in

Rs.

At the beginning of the period 11,101,900 111,019,000 11,101,900 111,019,000

Outstanding at the end of the period 11,101,900 111,019,000 11,101,900 111,019,000

(b). Terms/rights attached to equity

shares

The company has only one class of equity shares having a par value of Rs.10/- per share .Each holder of equity shares is entitled to one vote per share The company declares and pays Dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the Approval of the share holders in the ensuing Annual General Meeting.

During the year ended 31-03-13 the amount of per share dividend recognized as distributions to equity share holders was Rs.nil .

In the event of liquidations of the company the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all Preferential amounts .The distribution will be in proportion to the number of equity shares held by the shareholders


29

4. Reserves and surplus

Particulars 31 March,2013 31 March,2012

Capital reserve

State Subsidy

2,000,000

2,000,000

Surplus/deficit) in the statement of

profit and loss

Balance as per last financial statements (814,210,611)

(789,878,173)

Profit for the year 244324 (813966287) (24,332,438) (814,210,611)

Net surplus in the statement of profit

and loss (813,966,287)

(814,210,611)

Total reserves and surplus (811,966,287)

(812,210,611)

5. Long-term borrowings

Particulars

Non-current portion

31 March,

2013

31 March,

2012

Term loans

Secured

Banks

797,634,226

797,634,26

797,634,226

797,634,26

Loans and Advances from Related

Parties

Unsecured

11,501,829

11,501,829

11,580,074

11,501,829

Net Amount

809,214,300

809,136,05


30

6. Other long-term

liabilities

Particulars 31 March,

2013

31 March,

2012

Trade payables (including acceptances) (refer note 45 for details of dues to micro and small enterprises)

11,572,128 11,572,128

Lease rentals Payable 11,296,591 11,296,591

Advances from customers

3,960,600 3,960,600

Other Liabilities 2,537,428 2,832,360

Total 29,366,747 29,661,679

7. Other

currentliabilities

Particulars 31 March,

2013

31 March,

2012

Auidt fee payable 28090 22472

Expenses payable 11236

Total 28,090 33,708

8. Tangible assets

Particulars

Gross Block Depreciation Net Block

As at 01.04.12

Additions/ Deductions Adjustments

As at 31.03.13

As at 01.04.12

For the year

As at 31.03.13

As at 31.03.13 As at 31.03.12

Land 3307984 (205832) 3102152 - - - 3102152 3,307,984

Buildings 18352290 100000 (60000) 18392290 5855930 - 5855930 12536360 12496360

Plant & Machinery 216565656 - 216565656 87103650 - 97390519 119175137 129462006

Office Equipment 375255 - 375255 197328 - 215153 160102 177927

Furniture & Fixtures 446118 - 446118 262807 - 291046 155072 183311

Vehicles (Cars) 20375 - 20375 19728 - 20375 - 647

239067678 - 239067678 92826476 - 103773023 135294655 146240555

CWIP 1639117 - 1639117 - - - 1639117 1639117

Total 240,706,795 - 240,706,795 92,826,476 - 103,773,023 136,933,772 147,879,672

Previous Year 240,706,795 - 240,706,795 92826476 - 103773023 136933772 147880319


31

9. Loans and advances

Particulars 31 March, 2013 31 March, 2012

Advances recoverable in cash or kind

Secured, considered good - -

Unsecured, considered good 1,061,859 1,061,859

1,061,859 1,061,859

Other loans and advances -

Balances with statutory/government authorities 58,996 58,996

58,996 58,996

Total 1,120,855 1,120,855

10.Other Non-Current Assets


Long term trade payables

Unsecured, considered good 1,080,872 1,080,872

Total 1,080,872 1,080,872

11 Other current assets


TDS receivables 107,534 -

Total 107,534 -

12. Cash and bank balances


Cash and cash equivalents

Balances with banks: - -

Cash on hand 40,112 4,332

Total 60,059 4,332


32

13.Other income


Compensation received 867,803 -

Total 809,505 -

14.Other expenses


Printing & Stationery 12,500 1,250

Communication expenses 11,540 2,540

Rates & taxes 517,144 -

Traveling& Conveyance 26,542 18,542

Office Maintenance 19,932 2,412

AGM / EGM expenses 1,520 1,520

Miscellaneous expenses 6,211 1,2447

Audit Fees 28,090 33,708

Total 623,479 27,475

Payment to auditor


As auditor:

Audit fee 28,090 22,472

-

Total 28,090 22,472


33

BALANCE SHEET ABSTRACT AND COMPANY GENERAL BUSINESS PROFILE

I. Registration Details:

Registration No.01-13446 State Code No.01

Balance Sheet date 31-03-2013

II. Capital Raised during the year (Amount in Rs. thousands)

Public Issue Rights Issue

Nil Nil

Bonus Issue Private Placement

Nil Nil

III. Position of Mobilization and Development of funds (Amount in Rs. thousands)

Total Liabilities Total Assets

139117 139117

SOURCES OF FUNDS:

Paid Up Capital Reserve & Surplus

112519 (811966)

Secured Loans Unsecured Loans

797634 11501

APPLICATION OF FUNDS:

Net fixed Assets Investments

136767 Nil

Net Current Assets Misc. Expenditure

85 Nil

Accumulated Loss

545554


34

IV. Performance of Company (Amount in Rs. thousands)

Turnover Total Expenditure

Nil 623

Profit before Tax Profit after Tax

244 244

Earnings per share in (Rs.) Dividend Rate %

0.022 Nil

V. Generic Name of three Principal products/ service of company (As per monetary

Terms)

Items Code No. : 580219

(ITC Code No.) Products description: terry towels.

-----------------------------------------------------------------------------------------------------------------

As per our Report of even date For and on behalf of the Board

For C.RAMACHANDRAM & CO, S.S.R.KISHEN

CHARTERED ACCOUNTANTS MANAGING DIRECTOR

FRN:002864S

C. RAMACHANDRAM N SRIRAMULU

PARTNER DIRECTOR

Membership No.025834

Place: Hyderabad

Date: 02.09.2013


35

TERRYGOLD (INDIA) LIMITED

4th Floor, H.No. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad –500 004

Attendance Slip

21st Annual General Meeting

Please complete this attendance slip and hand it over at the entrance of the venue. I/We hereby record my/our presence at the 21st Annual General Meeting of the Company held at the Registered Office of the Company at 4th Floor, H.No. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad –500 004 on Saturday, 28 September, 2013 at 10.00 A.M. Regd. Folio No. _________________________ Full Name of the Shareholder ________________________________________

(In Block Letters) Signature ____________________________________________________ sFull Name of the Proxy __________________________________________________________________ (In Block Letters) Signature ____________________________________________________

TERRYGOLD (INDIA) LIMITED

4th Floor, H.N. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad –500 004

Proxy Form 21 st Annual General Meeting

Regd Folio No. _______________________________________________ I/We_______________________________________________________________ Of_________________________________________________________________ Being a member/members of TERRYGOLD (INDIA) LIMITED, hereby appoint ___________________________________ Of ______________________ Or failing him ___________________________________________ Of __________________________________ ________________________ As my/our proxy in my/our absence to attend and vote for me/our behalf at the 21st Annual General Meeting of the Company to be held at the Registered Office of the Company at 4th Floor, H.N. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad –500 004 on Friday 28th September, 2012 at 10.00 A.M. and at any adjournment thereof. Signed this _________________________________________ day of _____________________________, 2013 Signature ____________________________________________________ Note: a) The proxy must be deposited at the Registered Office of the Company 4th Floor, H.N. 6-2-966/5/1,

Hill Colony, Khairatabad, Hyderabad –500 004 not less than 48 hours before the time fixed for holding the meeting.

b) Persons attending the Annual General Meeting are requested to bring their copies of the Annual Report.

c) The proxy form to be effective should be duly completed in all respects and signed across the revenue stamp.

Affix Re.1/- Revenue Stamp


36

BOOKPOST

To

TERRYGOLD (INDIA) LIMITED 4th Floor, H.No. 6-2-966/5/1, Hill Colony, Khairatabad, Hyderabad –500 004