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