Gangotri Textiles

The Directors have pleasure in presenting the Nineteenth Annual Report
 of the Company along with the audited statement of accounts for the
 year ended 31st March 2008.
 
 FINANCIAL RESULTS                              (Rs. in Lakhs)
 
 PARTICULARS                                  31.03.2008    31.03.2007
 
 Sales Turnover                                 15883.75      16536.50
 
 Profit before interest, depreciation and tax    2058.84       2490.04
 
 Less :
 
 Interest                                        2006.52        848.11
 
 Depreciation                                    1454.74       1194.58
 
 Loss before tax                                -1402.42        447.35
 
 Add / Less :
 
 Taxes of prior years                              17.26           -
 
 Prior year expenses                                 -            5.13
 
                                                -1419.68        442.22
 
 Add :
 
 Surplus brought forward                          147.69         35.94
 
 Taxes of prior years                                -            7.78
 
 MAT Credit entitlement                              -           91.60
 
 Prior year adjustments Income                      3.09           -
 
 Investment fluctuation reserve                     0.02           -
 
 TOTAL                                          -1268.88        577.54
 
 APPROPRIATIONS :
 
 Provision for Tax - Income Tax                     -            51.00
 
 Provision for Tax - Wealth Tax                     1.00          1.00
 
 Provision for Tax - FBT                           12.00         10.00
 
 Provision for Deferred Tax - 31-3-2008          -547.65        157.07
 
 Proposed Dividend - 31.3.2007                      -           163.07
 
 Corporate Dividend Tax                             -            27.71
 
 Transfer to General Reserve                        -            20.00
 
 Surplus carried over to Balance Sheet / Transfer
 
 from General Reserve                            -734.23        147.69
 
 TOTAL                                          -1268.88        577.54
 
 PERFORMANCE
 
 As is the normal practice, the performance of the Company during the
 year under review is dealt with exhaustively in the Management
 Discussion and Analysis, which forms part of the Annual Report, that is
 being circulated.
 
 DIVIDEND
 
 In view of the loss incurred by the Company during this financial year,
 the Directors are not recommending any Dividend for the financial year
 ended 31st March, 2008.
 
 CAPITAL
 
 You will find that the Paid-up Capital of the Company as on 31.3.2008
 is Rs.16,30,73,170/-. representing 3,26,14,634 Equity Shares of Rs 5 /-
 each. As already reported last year, the Promoters were allotted and
 issued 16,00,000 Share Warrants of Rs 5/- each on 1-3-2006 subject to
 the condition that 10 % of the Warrant amount amounting to Rs 80,00,000
 /- to be paid at the time of allotment and the balance 90 % of the
 Warrant amount amounting to Rs 7,20,00,000 /- to be paid within a
 period of 18 months ie on or before 1-9-2007. Since the Promoters
 failed to pay the balance 90% of the amount within the stipulated time,
 the initial payment of Rs 80,00,000 /- made by them was forfeited.
 Hence the Paid-up Capital of the Company remains at Rs 16,30,73,170/-.
 
 PROJECT
 
 The Company has completed the project of establishing its Weaving and
 Processing Division, as also expansion in the Ring Spinning Division at
 Pushpathur Village. It has also installed the Wind Mills. All these
 expansion schemes are in line with the project as given in the
 Prospectus which has been subsequently revised in consultation with the
 Lead Managers to Issue and which fact has been intimated to the Stock
 Exchanges and also made a note of in the quarterly results published
 from time to time.
 
 As at the end of the year, the Companys Open End Spinning Units are
 functioning at Kittampalayam, Ponnandampalayam and Village Alate in the
 District of Kolhapur in Maharashtra. The total rotors functioning in
 all the three put together is 5904. The Ring Spinning Unit with 17376
 spindles is functioning at Pushpathur Village in Palani Taluk.
 
 Waste Processing unit, which has been established as part of the
 expansion scheme is functioning at Mopperipalayam Village. The Washing,
 Weaving and Processing units are functioning at SIPCOT Industrial
 Growth Centre, at Perundurai. The stitching unit is functioning at
 Peelemadu, Coimbatore.
 
 PROSPECTS
 
 Textile Industry, for the past more than a year and half, is undergoing
 unprecedented adverse conditions.  There has been a steep increase in
 prices of Cotton.  All representations to the Government to stop
 exports of cotton to facilitate softening of price have not yet yielded
 any results in the wake of Globalisation. The yarn prices have not been
 remunerative at all and the movement is also very sluggish. The power
 situation is matter of grave concern. While there are frequent
 obstructions in the power supply by Electricity Board, Captive
 Generation either with Diesel Oil as fuel or Furnace Oil as fuel is
 prohibitively costly. On the labour front, there is absolutely shortage
 of skilled labour. Recent steps taken by the Government of Tamil Nadu
 in so far as the apprentice front do not augur well for the future of
 the Industry.
 
 On the whole, the Textile Industry whether it is Spinning, Weaving,
 Processing or Garmenting is at cross roads and time alone can prove
 whether this Industry, which meets one of the basic requirements, will
 survive.
 
 DEPOSITS
 
 Public deposits accepted by your Company are well within the prescribed
 limits of the provisions of Section 58A of the Companies Act, 1956 and
 all the rules and procedures connected with the acceptance of deposits
 have been complied with fully. There are no unclaimed or overdue
 deposits in the Company.
 
 LISTING AND DELISTING
 
 As already informed in the last year Report, the Company has applied
 for De-listing of its Equity Shares from 1) Madras Stock Exchange
 Limited 2) Coimbatore Stock Exchange Limited and 3 )The Calcutta Stock
 Exchange Association Limited in view of the fact that trading
 activities in the above stock exchanges have become negligible.
 However, the shares are continued to be listed in 1) Bombay Stock
 Exchange Limited and 2)National Stock Exchange of India Ltd which have
 got reach across the length and breadth of the Country. Intimation for
 de-listing of the shares has come from Madras Stock Exchange Limited
 and intimation from Coimbatore Stock Exchange Limited and The Calcutta
 Stock Exchange Association Limited are still awaited.
 
 The company has paid the listing fee to the National Stock Exchange of
 India Ltd and the Bombay Stock Exchange Ltd for the financial year
 2008-2009 already.
 
 DIRECTORS RESPONSIBILITY STATEMENT In terms of the requirement of
 Section 217 (2AA) of the Companies Act, 1956, the Directors hereby
 confirm:
 
 i. That in the preparation of Annual Accounts, the applicable
 Accounting Standards have been followed;
 
 ii. That 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 as at 31st March, 2008 and of the loss of the
 Company for the year ended on that date.
 
 iii. That the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provision of the Act, for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 iv. That the Directors have prepared the Annual Accounts on a going
 concern basis.
 
 DIRECTORS
 
 Two Directors, Mr. C.R. Swaminathan and Mr. S. Palanisamy are due to
 retire at the ensuing 19th Annual General Meeting and being eligible
 offer themselves for reappointment. The necessary particulars as
 required are given in the meeting notice.
 
 AUDITORS
 
 M/s Thakker & Sanghani, Chartered Accountants and M/s Srikishen & Co,
 Chartered Accountants, the Auditors who have been appointed to hold
 office till the conclusion of this Annual General Meeting have given
 the necessary certificates envisaged under Section 224 (IB) of the
 Companies Act, 1956. They are entitled to be re-appointed.
 
 GENERAL
 
 There are no employees falling under Section 217 (2A) of the Companies
 Act, 1956.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to thank and record their appreciation to all the
 Bankers of the Company for their valuable financial support extended to
 the Company. Your Directors also wish to thank the suppliers and all
 others who have contributed their mite either directly or indirectly to
 the Companys growth and prosperity. Your Directors record their
 appreciation of the co-operation and contribution made by the employees
 at all levels towards the progress of the Company.
 
 
                                    By Order of the Board 
                                    For GANGOTRI TEXTILES LIMITED
 
 Coimbatore                MOHANLAL TIBREWAL    MANOJ KUMAR TIBREWAL
 28.06.2008                Executive Director   Managing Director