The Directors are presenting this twenty second Annual Report together
 with the Audited Statement of Accounts for the fifteen months financial
 period ended on 31 st March, 2010
 
 
 
                                      For the fifteen   For the six 
                                       months period    months period
                                      ended 31.03.2010  ended 31.12.2008
 
 Sales                                     73.14             81.06
 
 Job work/Labour charges                  739.44            271.50
 
 Other Income                              13.55              2.09
 
 Operating Expenses                       825.63            219.56
 
 Increase/Decrease in stock of 
 finished goods and work in process        12.77              4.22
 
 Profit (loss) before Depreciation 
 and interest and extraordinary items     208.19            124.45
 
 Interest                                   2.64              3.60
 
 Depreciation                             102.37             42.41
 
 Investment written off *                      -            265.40
 
 Profit/(loss) before Tax                 103.18           (186.96)
 
 Profit/(Loss) after Tax                  102.73           (187.49)
 
 
 
 *Investment in East Butterfly, Tashkent, Uzbekistan.
 
 DIVIDEND:
 
 In view of the accumulated losses your Directors regret their inability
 to recommend a dividend for the financial period under review.
 
 DIRECTORS:
 
 Mr.M.Padmanabhan, Director retires from the Board by rotation under the
 Companies Articles of Association and, being eligible, offer himself
 for reappointment.
 
 REVIEW OF OPERATIONS:
 
 Due to non-availability of working capital the Company could carry out
 only limited operations, mainly job work of pressure cookers and vacuum
 flasks to Gandhimathi Applia ces Ltd., an Associate of the Company.
 
 PROSPECTS FOR THE CURRENT YEAR:
 
 As stated earlier, due to working capital constraints, the Company is
 unable to stand alone for its production and marketing. Therefore, to
 avoid loss of production, loss of employment, loss of revenue to
 Central and State Governments, the Company prayed before the Honble
 Board for Industrial and Financial Reconstruction (BIFR) for its
 demerger/merger; with its associate Company, Gandhimathi Appliances
 Ltd. The Honble Bench of BIFR approved in principle the Companys
 proposal. Accordingly, a Modified Draft Rehabilitation cum Merger
 Scheme (MDRMS) duly recommended by the Monitoring Agency (IFCI Ltd) has
 been submitted to Honble BIFR (which is being submitted to
 shareholders for their approval at the forthcoming Annual General
 Meeting of the Company as a Special Resolution). The MDRMS is expected
 to be approved by Honble BIFR during the course of the current
 financial year.
 
 STATUS REGARDING REHABILITATION:
 
 Honble Board for Industrial and Financial Reconstruction (BIFR) vide
 its order dated 15.7.2009 has granted in-principle approval for the
 Companys merger with its Associate, Gandhimathi Appliances Ltd. The
 Company has since submitted a Modified Draft Rehabilitation cum Merger
 Scheme duly recommended by its Monitoring Agency (IFCI Ltd), which is
 presently under consideration of the Honble BIFR.
 
 CORPORATE GOVERNANCE:
 
 As the Company has been unlisted as per directions of Honble BIFR,
 Clause 41 of the Listing Agreement with regard to Corporate Governance
 is not applicable.
 
 AUDITORSREPORT:
 
 The Auditors have remarked that the accounts for the period have been
 prepared on the assumption of the Going Concern basis. As mentioned
 in Note 3 to Schedule 13, forming part of the accounts, since Honble
 BIFR vide its order dated 15.7.2009 has already grantedjn-principle
 approval for the Companys merger with its Associate, Gandhimathi
 Appliances Ltd and the Modified Draft Rehabilitation cum Merger Scheme
 submitted by the Company duly recommended by its Monitoring Agency is
 presently under consideration of the Honble BIFR, the accounts for the
 period have been prepared on a Going Concern basis.
 
 Referring to Annexure B to the Auditors Report, the arrears of sales
 tax dues of Rs.202.43 lakhs payable to the Tamil Nadu Sales Tax
 Authorities is being arranged for payment as soon as possible, as per
 provisions of the Modified Rehabilitation Scheme (MRS-07) sanctioned by
 Honble BIFR.
 
 Annexure C to Auditors Report pertaining to Central Excise dues of
 Rs.22.04 lakhs has been disputed by the Company and the same is pending
 for final orders of CESTAT, Chennai.
 
 Referring to note 4f (ii) of the Auditors1 Report, the reason for not
 making provision for interest payable amounting to Rs. 39 lakhs has
 been explained vide note 6 of Schedule 13, notes on accounts.
 
 AUDITORS:
 
 Messrs.Rudhrakumar Associates, Chartered Accountants, hold office till
 the conclusion of the forthcoming Annual General Meeting and being
 eligible, offer themselves for reappointed.
 
 FIXED DEPOSITS:
 
 The Company has not accepted any deposits from the public and, as such,
 there are no outstanding deposits in terms of the Companies (Acceptance
 of Deposits) Rules, 1975.
 
 PARTICULARS OF EMPLOYEES [SECTION 217 (2A)]:
 
 There was no employee covered by the provisions of Section 217(2A) of
 the Companies Act, 1956.
 
 REPORT ON ENERGY CONSERVATION AND R&D ACTIVITIES:
 
 Information relating to energy conservation, foreign exchange earned
 and spent an research and development activities undertaken by the
 Company in accordance with the provisions of section 217(1 )(e) of the
 Companies Act, 1956 read with Companies (Disclosure of particulars in
 the Report of Board of Directors) Rules 1988 are given in Annexure A
 of the Directors Report.
 
 DIRECTORSRESPONSIBILITY STATEMENT:
 
 Statement under sub-section (2AA) of Section 217 of the Companies Act,
 1956 (The Act).
 
 In the preparation of the Annual Accounts:
 
 i.  the applicable accounting standards have been followed.
 
 ii.  the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for the financial year. 
 
 iii.  proper and sufficient care has 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.
 
 iv.  Going concern basis has been followed in the preparation of
 annual accounts.
 
 The financial statements have been audited by Messrs.Rudhrakumar
 Associates, Chartered Accountants, the Statutory Auditors and their
 report is attached to the Accounts.
 
 PERSONNEL:
 
 The spirit of trust, transparency and team work has enabled the Company
 to build a tradition of partnership and harmonious industrial
 relations. Your Directors record their sincere appreciation of the
 dedication and commitment of the employees at all levels, despite
 severe financial constraints.
 
 ACKNOWLEDGEMENTS:
 
 Your Directors acknowledge with gratitude the co-operation and
 assistance given by M/s.Gandhimathi Appliances Ltd, in providing job
 work and undertaking marketing of the Companys products through their
 regular trade channels. They are also indebted to the State and Central
 Governments, business associates and others for their continuing
 support, when the Company is passing through a rough weather.
 
 
 
                                        For and on behalf of the Board 
 Chennai-600018                                   V.M.LAKSHMINARAYANAN
 
 Date: 04.08.2010                         Chairman & Managing Director