The Directors have pleasure in presenting their report and audited accounts for the financial year 2013-2014

                                                        (Rs. In lakhs)

                                               2013-2014     2012-2013

Sales/Other Operating Income                      396.81        388.68

Other Income                                       93.94         60.37

Gross Income                                      490.75        456.05

Profit before Tax                                  15.17         18.95

Provision for Taxation                              4.21        - 4.73

Profit for the year                                19.38         14.22

Add: Transfer to Capital ReserveRemission of Secured Loan                           2.74

Add: Loss brought forward                        2115.70       2129.92

Accumulated Loss as on 31st March                2099.06       2115.70

Your Company could achieve a gross revenue of Rs.490.75 lakhs (Note no.:14&15 (456.05 lakhs), consisting of (i) Sales revenue of Rs.396.81 lakhs (388.68 lakhs), (ii) Rental income of Rs.65.97 lakhs (42.00 lakhs) and (iii) Miscellaneous income of Rs.27.97 lakhs (25.37 lakhs). (Figures in brackets for the previous year) After adjustment and taxation, your Company's net profit this year stands at Rs. 19.38 lakhs against a profit of Rs. 14.22 lakhs for the previous year.

With regard to the trading segment, by concentrating on the essential aspects of sales, your company could maintain and slightly improve upon the sales revenue during the year compared to the previous year, which is an achievement considering the combination of adverse factors faced during the last year. Sales during the year suffered on account of long drawn strike in the textile sector in the grey fabric sourcing area in towns around Erode and Tirupur, which affected the availability of fabric for processing.. This was followed by high rise in grey fabric prices as a consequence of the labour settlement. Subsequently there was a long drawn disruption in processing, on account of Pollution Control Problems which lasted for two months, during which period no processing could be undertaken. Owing to such uncertainties, prices of grey fabric and charges for processing have been increasing more frequently than ever before. Unable to so frequently increase the prices of finished fabric to match the increase of grey fabric prices and processing charges, your company had to suffer on the profit margin. The suppliers do not give a firm commitment for either the prices or for the delivery period. As your Company has been maintaining minimum stock to reduce blocking of resource through inventory, there have been more frequent times during the year when supplies could not be ensured on demand, thus some orders were also lost.

In the past the Company had the benefit of some special orders demanding intricate specifications, which were executed through the inbuilt technological competence of the Company. The demand stands considerably reduced and no new sources could be traced. Also export of made- up items used to be a good source of income in the past, which during the year is nil. Despite all the adverse factors, your company has been able to make its presence felt in the market and the Company's products which are mainly bleached mull of limited items are still in demand, though in comparatively small quantum, for its superior quality.

The other segment that came as a rescue and contributed to the increased revenue is income from rent which has increased from Rs.42 lakhs during the previous year to Rs.66 lakhs during the year. Considering the trend of lean trading activities, the immediate and apparently viable alternative appears to lay emphasis on generation of more income from godown renting. While your Company is making all out efforts in attracting more and more lessees, the buildings are knowingly more than seven decades old with wood and tile roof structure and do not offer modern facilities for warehousing. It is by taking advantage of the open space for movement and parking including for containers that attracted the present lessees. But the goods stored are mainly hardware items than modern items of white goods/electronics etc. Also the buildings before being rented out needs major repairs, alterations and modifications including partitions to provide minimum of storing and logistics conveniences involving considerable initial expenditure. The expenditure on repair of buildings before being rented out during the year comes to Rs.40 lakhs against a rent income of Rs.66 lakhs. Once the income from the rent is stabilized, demolition and reconstruction of some of the buildings would be taken up, for which survey and preliminary planning are afoot.

After the Processing Operator who was doing process operation in the mill premises discontinued their activities, the Mill had virtually no manufacturing activities. Your Company has located another party with whom a lease agreement has been entered into for them to conduct process operation in our Mill premises, so that manufacturing activities commences in the Mill premises.

Your Company is passing through a stage where the surplus generated through the limited activities of trading and renting help meeting the expenses related to a an ongoing Company like Stock Exchanges, Share Transfer Management, Factory License, Pollution Control Board Certification, Audit expenses and repair and maintenance of the buildings in the mill premises which carve a major portion of the rent income initially, apart from the normal business related expenses. Despite these factors your Company has been able to earn a net profit of Rs. 19.38 lakhs which is attributable to the strength of the Company derived through its reputation, credibility, quality orientation and business acumen. Your Company having discharged huge liabilities of Bank borrowings, VR compensation to the employees and other long pending major liabilities to the creditors, its strength lies on its non dependence on outside finance. With the present trend of trading business and rent income, there is definite scope for improved profitability in future.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY UPGRADATION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

The report required to be made pursuant to clause (e) of Section (1) in Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors Rules 1988) and forming part of the Director's report is given in Annexure A to this report.

DIRECTORS:

Retirement of Directors: As per the Companies Act 2013 and SEBI Guidelines the Company should appoint 2 Independent Directors for a period of 5 years. Accordingly Shri.R.S.Nair and Shri.A.Ramachandra Shetty are proposed to be appointed as Independent Directors. Brief particulars and expertise of these Directors and Committee membership have been given as Annexure to the notice of the Annual General Meeting. Shri.A.K.Shereif has to retire by rotation and is eligible for re-appointment. All the Directors have filed Form DDA with the Company as required under the Companies Act.

PERSONNEL:

There were no employees drawing remuneration in excess of the limits specified under section 2I7(2)(A) of the Companies Act during the year under report.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of corporate governance have been incorporated in the Annual Report. Your company is committed to good corporate governance practices and to follow the guidelines provided by SEBI and stock exchanges from time to time.

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors hereby confirm:

1. That in the preparation of Accounts for the period ended 31st March 2014, applicable accounting standards have been followed along with proper explanation relating to material departures, wherever necessary.

2. 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 for the financial year ended 31st March 2014.

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 Profit and Loss Account and Balance Sheet have been prepared on a going concern basis.

COMPLIANCE CERTIFICATE

As required under Section 383(A) of the Companies Act, Compliance Certificate obtained from Sri Murali Kanniyath, Practicing Company Secretary, Kannur, for the year ended 31st March 2014 is given in Annexure-B and forms part of this report.

AUDITORS:

M/S.T K Menon & Co., Chartered Accountants, Calicut the Statutory Auditors, retire at the ensuing Annual General Meeting and as per the provisions of the Companies Act 2013 they are eligible for re-appointment for a futher period of 3 years. Your Directors recommend the reappointment of the Statutory Auditors till the AGM of 2017. This is to be ratified at every Annual General Meeting till 2017.

INSURANCE:

The Company's Assets have been adequately insured.

DIVIDEND

Though the Company has earned small amounts of operational profit during the years 2010- 2011, 2011-2012, 2012-2013 and 2013-2014 owing to accumulated losses of Rs.2099.06 lakhs as on 31st March 2014, no dividend could be declared under the Companies Act.

CORPORATE SOCIAL RESPONSIBILITY

Though your Company is not covered by Corporate Social Responsibility as per the Companies Act 2013, yet in its culture of being actively involved in Social responsibilities, emphasis will continue to be laid on this aspect.

ACKNOWLEDGEMENT

Your Directors place on record their thanks and appreciation to the employees of the Company at all levels, shareholders, agents and other business associates for their dedication and contribution to the Company's operations.

Your Directors place on record their thanks to The ICICI Bank Ltd., The Federal Bank Ltd., The State Bank of India, The Bank of India and The IDBI Bank for their valuable co-operation and support to the Company.

Place : Kannur                                   On behalf of the Board
Date : 18.08.2014                                              Chairman