Meenakshi India Ltd Management Discussions

1) Organisation - Profile:

M/s. Meenakshi (India) Ltd was incorporated in 1982. It has various Divisions consisting of Manufacturing & Export of Apparels, Trading in Textiles, Plantations and generating Power thro Windmill.

M/s. Meenakshi (India) Ltd is the Flagship Company of the group. The group is having other major Companies such as M/s. Meenakshi Bio- Tech Ltd., M/s. Libra Constructions & Finance Ltd, M/s. Sri Bajrang Textiles (P) Ltd, M/s. Meenakshi Finance & Properties (P) Ltd, M/s. Bajrang Investments (P) Ltd etc.

The group is founded and headed by Shri. S.S. Goenka who brings in 40 years of rich experience. The Whole – Time Director of the Company Mr. Ashutosh Goenka, aged about 40 years, has more than years of rich experience in the apparel Manufacturing and Exports. He has widely traveled globally and has also developed good business relationships.

The Company has 3 Manufacturing units – One at Ambattur Industries Estate, Chennai – and the other two at Salem. The company proposes to expand facilities at its third unit.

The Company’s Plantation Estate is situated at Sirumalaipudur, Dindigul in Tamilnadu and the Windmill is operated from Vadamacherry village, Ciombatore Dist. The Trading Division is located in Chennai.

2) Business:

Meenakshi (India) Ltd has set up its own Apparel Manufacturing unit in the year 1992-for Apparel export. The Company mainly exports to USA, Europe and Canada. The Company’s Export Division works with major labels such as Wrangler, Columbia Sports Wear, Timber Land etc.

In the Textile Trading, the Company acts as a wholesale dealer / Distributor for Grasim in the Sates of Tamilnadu & Kerala since 1982.

Under the Plantation Division, the present area of Cultivation is about 282 acres and the main crops grown there are Coffee, Cardamom, Pepper etc.

The Company has also put up its own Wind power generator at Vadamacherry Village near Coimbatore. The Annual Power generation is around 3.12 Lacs units and the entire power is sold to the GRID of TNEB.

3) Industry Scenario:

Indian Economy has registered a strong growth rate during the year.

After the Liberalization and Phasing out the quota system, the Indian Apparel Manufacturing and Exports have entered into the global market as vibrant and as more visible and marked its imprint in the International Market.

Industry Structure & Development:

The Textile and Clothing are closely related with Textiles providing major input to the clothing industry. International Trade were hitherto regulated by the Agreement on Textiles and Clothing (ATC) at the multilateral level with various bilateral and regional Trade Agreements. The ATC called for phasing out of quota restrictions as a pre-condition to the formation of World Trade Organization (WTO).

India accounts for 8% of the global trade in textiles and is ranked as the 6^th largest supplier in the world. The country is the largest producer of jute, second largest producer of cotton yarn, second largest producer of silk and the fifth largest producer of synthetic fibre/yarn globally.

Going forward, the outlook for the industry looks very encouraging. The industry is becoming more competitive by embracing modern technology and work processed, building strong brand equity and consistently achieving higher growth rates than ever.

Besides, the Indian Government has recognized the potential of the textile and apparel sector and has undertaken several measures to give it a further boost.

Opportunities and Threats:

After dismantling of quotas, India Seems to benefit due to Raw Material, design skills & skilled labour advantages. India has become one of the largest exporters of Cotton fabric. With the emergence of the National Institute of Fashion Technology, many high quality designers, who can create modern designs and interact with the buyers, are emerging.

Indian exporters enjoy a significant competitive advantage in terms of labour cost over developed countries like USA,EU, Hong Kong, Taiwan, Singapore etc. Apart from theses, USA and EU have imposed quotas on China recently which would benefit India in consolidating its market share and good political relations with these two countries would further help.

In spite of the above advantages that India has, there would be pricing pressures in view of dismantling of quotas. Also India has geographical disadvantage which take little longer time to reach its products to the key Overseas markets. Today the International buyers are looking for quality manufacturers and timely supply.

Regarding the Agricultural front, the vagaries of the weather conditions had affected the productions & yields, particularly Coffee, Pepper etc. Moreover, the prices of the Crops, particularly Coffee, Cardamom, Pepper would depend on the demand & its supply. The prices of the crops would largely decide the profitability.

Operating Results/Financial Highlights:

The Financial statements have been prepaid in compliance with the requirements of the Companies Act, 1956. The Management accepts the responsibility for the integrity and objectivity of these financial statements and the basis for the various estimates and judgments used in preparing the financial statements.

The Company could achieve a total Sales Turn over of Rs.27.07 crores during the financial year when compared to the previous year’s sales Turn over of Rs.26.47 crores.

The Export Division could achieve a turn over of Rs.20.21 crores, compared to the previous year’s export turn over of Rs.23.51 crores and this 14% short fall in export sales is mainly due to recession in the international market.

The company could achieve a PBDT of Rs.1.71 crores and after Depreciation of Rs.1.12 Crores

Risks & Concerns:

Economic Risk, Concentration Risk & Competition Riak.

The Export business is to some extend affected by the prevailing economic conditions in India. Slow down in GDP growth, rise in interest rates, inflation, fiscal and monetary policies etc may adversely affect the Indian Economy.

However, given the estimate of at least 8% growth in the economy and global preferences for Indian ready-mades, the company does not expect to significantly affected by this risk.

Concentration Risk:

Risks are of both internal and external. Internal risks shall include but not limited to our dependency on limited number of buyers. The company’s largest three buyers account for approx. 95% of the total revenue. Loss of any one buyer or decrease in the volume of apparels they source from the Company may adversely affect revenues, pricing pressures, and consequently profitability of the Company. Another risk factor is that with the opening up of International markets, after removal of quota system, there may be pricing pressure on products due to various suppliers who will start competing for the same orders in the International markets.

The Company is constantly increasing the base of global buyers. Regular relationship are maintained with the existing as well as prospective buyers. Concerns like shortages of skilled manpower and technological obsolescence remain. However, these are threats faced by the entire industry. With superior methodologies and innovative processed and systems, the Company is well positioned to lead a high growth path.

Competition Risk.

Apart from the above, we are exposed to Foreign currency risk. The company is mainly an export oriented apparel manufacturer and approx. 90% of its revenue comes as export earnings. Since the buyers compare our products with that of competitors in USD denominated rate, the Exchange of Indian Rupee Vis--vis USD would weaken our competitive Position and similarly, Exchange fluctuations has an impact on the profitability of the Company.

Presently, the Govt. of India has instituted several policies to promote the growth of exports and these include interest rate subsidies, duty reimbursement schemes etc. Withdrawal / Termination of any of these policies / schemes may adversely impact the profitability of the Company.

However, the MIL has put in place a Risk Management System to Create an awareness about various risks associated with the business of the Company. The Risk Management Process involves risk identification, risk measurement, risk monitoring and its mitigation.

The Audit Committee and the Board have Okayed the existing system of risk management prevailing in the company.

Internal Control System:

The Company is committed to maintain an effective system of internal control for facilitating accurate, reliable and speedy compliation of financial information, safe guarding the assets and interests of the Company and ensuring compliance with all laws and regulations.

The Company has put in place a well defined Organizational Structure, authority levels and internal guidelines for conducting all business transactions, which are managed by professionals in their respective fields of operation. The audit committee is being informed at regular intervals in this regard with proper reporting system.

Human Resources / Industrial Relations:

The Company believes that its people are a key differentiator, especially knowledge driven, competitive and global business environment. The HRD is headed by a competent, experienced professional. The MIL has been maintaining a friendly & cordial relation with its workforce and is being imbibed with a sense of belongingness. Presently the Company has more than 1100 strong, committed & vibrant team to steer the Company in to greater heights in the coming days.

Sd/-	Sd/-
(ASHUTOSH GOENKA)	(S.S. GOENKA)
WHOLE-TIME DIRECTOR	CHAIRMAN AND MANAGING DIRECTOR

COMPLIANCE CERTIFICATE

CIN:L74300TN1987PLC014678

Nominal Capital: Rs.50000000/-

Paid-up Capital : Rs.37500000/-

To,

The Members,

M/s. MEENAKSHI (INDIA) LIMITED

No. 16, Whites Road,

Royapettah,

CHENNAI - 600 014.

We have examined the registers, records, books and papers of M/s. MEENAKSHI (INDIA) LIMITED, having Registered office at No. 16, Whites Road, Royapettah, Chennai - 600 014, as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2011. It is the responsibility of the Company to prepare and maintain the relevant necessary records under the Companies Act, 1956 and other applicable laws. Our responsibility is to carry out an examination, on the basis of our professional judgement so as to award a reasonable assurance or the correctness and completeness of the records for the purpose of this Certificate. In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its officers and agents, We certify that in respect of the aforesaid financial year:

1. The Company has kept and maintained all registers as stated in Annexure A to this Certificate, as per the provisions of the Act and the rules made thereunder and alt entries therein have been duly recorded.

2. The Company has duly filed the forms and returns as stated in Annexure B to this Certificate, with the Registrar of Companies, Tamilnadu, Regional Director, Central Government, Company Law Board or other authorities except in some of cases within the time prescribed under the Act and the rules made thereunder.

3. The Company being a Public Limited Company, comments are not required.

4. The Board of Directors duly met Seven times respectively on 07.04.2010, 31.05.2010, 13.08.2010, 01.10.2010, 15.11.2010, 18.11.2010 and 14.02.2011 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose.

5. The Company has closed its Register of Members and Share Transfer Books from 23^rd September, 2010 to 30th September, 2010 (both days inclusive) and necessary Compliance of Section 154 of the Act has been made. The Company does not have any Debenture holders.

6. The Annual General Meeting for the financial year ended on 31st March, 2010 was held on 30^th September, 2010 after giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in the Minutes Book maintained for the purpose.

7. One Extra-ordinary General Meeting was held on 30^th October, 2010 after giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in the Minutes Book maintained for the purpose.

8. Subject to prior approval of Central Government, the Company has advanced loans to its directors or persons or firms or Companies referred to undersection 295 of the Companies Act.

9. As Informed by the management, the Company has not entered into any contracts falling within the purview of Section 297 of the Act,

10. The Company has made necessary entries in the register maintained undersection 301 of the Act.

11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, Members or Central Government.

12. The Company has not issued any duplicate share certificates during the financial year.

13. (i). The Company has delivered at the Certificates on allotment of securities and on lodgement thereof for transfer/transmission or any other purpose in accordance with the provisions of the Act.

(ii). The Company has not deposited any amount in a separate Bank Account as no dividend was declared during the financial year.

(iii). The Company was not required to post warrants to any members of the Company as no dividend was declared during the financial year.

(iv). The Company was not required to transfer any amounts in unpaid dividend account, application money due for refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund.

(v). The Company has generally complied with the requirements of Section 217 of the Act.

14. The Board of Directors of the Company is duly constituted. Except for the Appointment of One Additional Director, there was no appointment of alternate directors and directors to fill casual vacancy during the financial year.

15. The Appointment of Whole-time Director has been made in compliance with the provisions of Section 269 read with Schedule XIII to the Act.

16. The Company has not appointed any sole selling agents during the financial year.

17. Except paragraph eight above and approval of Honble Company Law Board for Condonation of delay in registration of satisfaction of charges, the Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar and/or such authorities prescribed under the various provisions of the Act during the financial year.

18. The Directors have disclosed their interest in other firms /companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder.

19. The Company has not issued any shares, debentures or other securities during the financial year,

20 The Company has not bought back any shares during the financial year.

21. There was no redemption of preference shares or debentures during the financial year.

22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares.

23 The Company has not invited/accepted any deposits including any unsecured loans falling within the purview of Section 58A of the Act during the financial year

24. The amount borrowed by the Company from directors, public, financial institutions, banks and others during the financial year ending 31^ct March, 2011 are within the borrowing limits of the Company.

25. The Company has made loans and investments to other bodies corporate in Compliance with the provisions of the Act and has made necessary entries in the register kept for the purpose. Except Corporate Guarantees to the Bank, the Company has not given any guarantees or provided securities to other bodies corporate during the financial year.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Companys registered office from one state to another during the year under scrutiny.

27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the year under scrutiny

28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year under scrutiny.

29. The Company has not altered the provisions of the Memorandum with respect to share capital of the Company during the year under scrutiny.

30. The Company has not altered its Articles of Association during the financial year.

31. As informed by the management, there was no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any other punishment was imposed on the Company during the financial year, for offences under the Act.

32. The Company has not received any money as security from its employees during the financial year.

33. The Company has not deducted any contribution towards Provident Fund during the financial year.

	(KUSUMLATA JHAWAR)
Place: CHENNAI	Company Secretary
Date : 30.07.2011	ACS 28121 C.P. No. 10123

ANNEXURE A

(Forming part of Compliance Certificate dated 30^th July, 2011).

Statutory Registers as maintained by M/s. MEENAKSHI (INDIA) LIMITED.

1. Register of Charges u/s 143.

2. Register of Members u/s 150.

3. Index of Members u/s 151.

4. Register and Returns u/s 163.

5. Minutes Book of Meeting of Board of Directors u/s 193,

6. Minutes Book of Proceedings of General Meeting u/s 193.

7. Books of Accounts u/s 209.

8. Register of Contracts with Companies and firms in which Directors are interested u/s 301.

9. Register of Directors u/s 303.

10. Register of Directors Shareholdings u/s 307.

11. Register of Loans & Investment u/s 372A.

ANNEXURE B

(Forming part of Compliance certificate dated 30^th July, 2011).

Forms and returns as filed by M/s. MEENAKSHI (INDIA) LIMITED with the Registrar of Companies, Tamilnadu during the financial year ended 31st March, 2011.

1. Form 23AC with Balance Sheet as at 31^st March, 2010 and Form 23ACA with Profit & Loss Account for the financia year ended 31^st March, 2010 filed u/s 220 vide SRN P55177885 on 20.10.2010.

2. Form 20B with Annual Return (Schedule V) as on date of AGM held on 30^th September, 2010 filed u/s 159 vide SRN P55176630 on 20.10.2010.

3. Form 66 with Compliance Certificate for the financial year ended 31st March, 2010 filed u/s 383A vide SRN P55176333 on 20.10.2010.

4. Form 32 for Changes in Directors on 1st October, 2010 filed u/s 303 vide SRN A99845018 on 04.12.2010 with additional fees.

5. Form 3 for Modification of Charges on 23^rd March, 2010 filed u/s 135 and registered under Charge ID 80033911 on 07.05.2010.

6. Form 17 for Satisfaction of Charges on 7th December, 2010 filed u/s 138 and registered under Charge ID 90303615 on 10.12.2010.

7. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90303679 on 10.12.2010.

8. Form 17 for Satisfaction of Charges or 7^th December, 2010 filed u/s 138 and registered under Charge ID 90303733 on 10.12.2010.

9. Form 17 for Satisfaction of Charges or 7^th December, 2010 filed u/s 138 and registered under Charge ID 90304825 on 10.12.2010.

10. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90304891 on 10.12.2010,

11. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90305082 on 10.12.2010.

12. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306196 on 10.12.2010.

13. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306234 on 10.12.2010.

14. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306267 on 10,12,2010.

15. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306270 on 10.12.2010.

16. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306287 on 10,12.2010.

17. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306424 on 10.12.2010.

18. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306430 on 10.12.2010.

19. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge 3D 90306459 on 10.12,2010.

20. Form 17 for Satisfaction of Charges on 23rd November, 2010 filed u/s 138 and registered under Charge ID 90306612 on 16.12.2010.

21. Form 17 for Satisfaction of Charges or 18th December, 2010 filed u/s 138 and registered under Charge ID 90305111 on 14.01.2011.

22. Form 17 for Satisfaction of Charges or 18^th December, 2010 filed u/s 138 and registered under Charge ID 90306468 on 14.01.2011.

23. Form 17 for Satisfaction of Charges or 18^th December, 2010 filed u/s 138 and registered under Charge ID 90306471 on 14.01.2011.

24. Form 17 for Satisfaction of Charges or 18th December, 2010 filed u/s 138 and registered under Charge ID 90306556 on 14.01.2011.

25. Form 17 for Satisfaction of Charges on 18th December, 2010 filed u/s 138 and registered under Charge ID 90306617 on 14 01.2011.

26. Form 17 for Satisfaction of Charges on 14^th December, 2010 filed u/s 138 and registered under Charge ID 90304284 on 18.01.2011.

27. Form 17 for Satisfaction of Charges on 23rd November, 2010 fifed u/s 138 and registered under Charge ID 90304748 on 19.01.2011.

28. Form 17 for Satisfaction of Charges on 23rd November, 2010 filed u/s 138 and registered under Charge ID 90306503 on 19.01.2011.

29 Form 17 for Satisfaction of Charges or 7th December, 2010 filed u/s 133 and registered under Charge ID 90306236 on 27 01.2011.

30. Form 17 for Satisfaction of Charges on 7^th December, 2010 filed u/s 138 and registered under Charge ID 90306242 on 27.01.2011.

31. Form 8 for Modification of Charges on 28th November, 2010 filed u/s 135 and registered under Charge ID 80033911 on 03 02.2011.

32. Form 25C for Appointment of Whole-time Director with effect from 1st October, 2010 filed u/s 269 read with Schedule XIII of the Act on 24.12.2010.

33. Form 61 for filing an application with the Registrar of Companies for delay in registration of satisfaction of two charges.

	(KUSUMLATA JHAWAR)
Place: CHENNAI	Company Secretary
Date : 30.07.2011	ACS 28121 C.P. No. 10123