Mar 31, 2018
The Directors have great pleasure in presenting the 72nd Annual Report of the Company along with the Audited Financial statements for the financial year ended 31st March, 2018.
FINANCIAL RESULTS:
(Rs. in crore, except Earnings per share)
Particulars |
Standalone |
Consolidated |
||
Particulars |
2018 |
2017 |
2018 |
2017 |
Revenue from operations |
1158.75 |
1134.74 |
1158.82 |
1136.49 |
Gross Profit |
116.07 |
133.33 |
118.42 |
134.85 |
Less : Interest |
39.07 |
42.03 |
39.07 |
42.03 |
Operating Profit (EBDT) |
77.00 |
91.30 |
79.35 |
92.82 |
Less : Depreciation |
60.48 |
67.68 |
60.59 |
67.79 |
Profit Before Tax (PBT) |
16.52 |
23.62 |
18.76 |
25.03 |
Less: Current Tax |
(6.56) |
(0.07) |
(6.57) |
(0.06) |
Profit After Tax (PAT) |
23.08 |
23.69 |
25.33 |
25.09 |
Profit after OCI Income |
22.31 |
26.89 |
24.56 |
28.30 |
Add : Surplus brought forward from previous year |
82.84 |
64.96 |
91.76 |
72.54 |
Less: Dividend |
4.82 |
4.82 |
5.63 |
4.82 |
Less: Dividend Tax |
0.98 |
0.98 |
0.98 |
0.98 |
Less: Transfer to General Reserve |
- |
- |
- |
0.07 |
(Add) / Less : Transfer to OCI Reserve due to Ind AS Transition |
(1.44) |
3.21 |
(1.44) |
3.21 |
Balance carried to Balance sheet |
100.78 |
82.84 |
111.15 |
91.76 |
Earning Per Share |
||||
Basic - EPS Per Share |
47.92 |
49.16 |
52.60 |
52.10 |
Diluted - EPS per Share |
47.92 |
49.16 |
52.60 |
52.10 |
DIVIDEND
Your Directors recommend a Dividend of 50% (i.e Rs.5/- per share) for the year ended 31st March, 2018.
The Dividend if approved by the shareholders at the AGM, will be paid to the equity shareholders whose names appear in the Register of Members as on 20th September, 2018 and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on the same date. The cash outgo will be Rs. 2.90 Cr (Rs. 2.41 Cr as dividend and Rs. 0.49 Cr as Dividend tax).
SHARE CAPITAL
The paid-up Share Capital as on March 31, 2018 was Rs.4.82 crore. During the year the company has not issued any shares or any convertible instruments.
TRANSFER TO RESERVES
During the year under review, the Company has not transferred any amount to General Reserve.
MATERIAL CHANGES OCCURRED AFTER THE END OF FINANCIAL YEAR
No material changes and commitments which could affect the companyâs financial position have occurred between the end of the financial year and the date of this report.
PERFORMANCE REVIEW, MANAGEMENT DISCUSSIONS AND ANALYSIS AND CURRENT YEAR OUTLOOK
During the year, company has produced 259.08 lakhs Kgs. of Yarn, 494.66 lakhs metre Woven fabrics and 210.62 lakhs Kgs. of Knitted fabrics.
The turnover for the year 2017-18 were at Rs.1158.75 crores as against Rs.1134.74 crores and Profit after tax was Rs. 23.08 crores as against Rs. 23.69 crores in the previous year.
The Export turnover during the year was Rs.988.05 crores as against Rs.990.92 crores in the previous year. Export turnover constitutes 82% of the total income of the Company.
The Financial year 2017-18 was a highly challenging year for the company. Rupee appreciation and the increase in cotton price has adversely affected the performance during the year.
The sudden demise of the Chairman and Managing Director Sri Manikam Ramaswami on 02.10.2017 is a great loss to the company. His vision, strong knowledge in Technology were great strength for the company. Under his leadership the company enjoyed a cordial relationship with all the stakeholders.
Industry Scenario
The Textiles sector is one of the largest contributors to Indiaâs exports with approximately 13 per cent of total exports. The textile industry is also labour intensive and is one of the largest employers. The textile industry employs about 105 million people directly and indirectly. India''s overall textile exports during FY 2017-18 stood at US$ 37.74 billion. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand.
High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market. The domestic market for apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to reach US$ 160 billion by 2025.
Market Trends and Outlook
There is a huge market potential for Textile Products viz yarn, fabrics and garments within the country and in the global market. Your company has established credentials in manufacturing and exporting yarn, woven/knitted fabrics and technical garments across the globe. Export constitutes 82 % of the turnover during the year.
There is good potential for increasing the export of technical garments. The company has planned to increase the volume in the value-added product, in exports and the domestic during the current year.
The process house (LSF) in Cuddalore has been equipped to increase the processing volume during the current f nancial year (2018-19)
AWARDS
The company bagged the following awards during the year.
- TEXPROCIL Gold Trophy for the 11th time in a row for the highest export of grey cotton fabrics
- Gold Trophy for the highest export of garments in the Rs. 50-100 Cr category from Apparel Export Promotion Council.
- Silver Plaque for Top Four Star exporter in Southern Region from Federation of Indian Export Organisations.
RENEWABLE ENERGY
During the year, the company has generated 7.73 crore units of wind power against 6.96 crore in the previous year and solar power 52.25 lakh units against 51.71 lakh units in the previous year.
ITALIAN JOINT VENTURE
Italian joint venture is performing satisfactorily. The JV Company has made a profit of Euro 6.10 lakh pre-tax and Euro 4.10 lakh post tax.
LOYAL INTERNATIONAL SOURCING PRIVATE LTD.
Loyal International Sourcing Private Limited (LISPL) is a 100% Wholly Owned Subsidiary Company started in the year 2014.
The operation in LISPL during the year was very minimal as the operation was stopped from July 2017.
CONSOLIDATED FINANCIAL STATEMENT
The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 and Regulations 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 along with a separate statement containing the salient features of the financial performance of subsidiaries and joint ventures is attached to the financial statements in the prescribed format.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The sad and sudden demise of Mr. Manikam Ramaswami, Chairman & Managing Director of the Company happened on 02.10.2017.
Mrs. Valli M Ramaswami the Whole time Director was appointed as Chairperson in the Board Meeting held on 19.10.2017.
Mr. R Poornalingam and Mr.Madhavan Nambiar were re-appointed as Independent Directors in the Annual General Meeting held on 25th September 2017. In addition Mr.B.T.Bangera and Mrs.Vijayalakshmi Rao were appointed as Independent Directors, in the Annual General Meeting held on 25th September 2017.
Mr. B. Vaidyanathan was co-opted as Additional Director in the Board with effective from December 07, 2017 and designated as Executive Director of the Company. Subsequently Mr.B.Vaidyanathan was re-designated as Non-Executive Director effective from March 19, 2018. He will hold office up to the date of ensuing Annual General Meeting and he is eligible for appointment as Director of the company.
Mrs. Valli M Ramaswami who ceased as Director effective from 10th February 2018 was appointed as an Additional Director effective from April 12, 2018 and designated as Whole Time Director of the Company and Chairperson of the Board. She will hold office up to the date of ensuing Annual General Meeting and eligible for appointment as Director of the Company.
Ms. Vishala Ramswami was appointed as Chief Executive Officer of the company with effect from October 19, 2017. She resigned from the post with effect from March 19, 2018.
Mr. A. Velliangiri was appointed as Chief Executive Officer of the company with effect from March 30, 2018.
STATUTORY AUDITORS
M/s.GANESH PRASAD, (Firm Regd.No.000872S) Chartered Accountants, have been appointed as statutory auditors of the Company for a period of 5 years in the 71st AGM held on 25th September 2017 and they will hold office till the conclusion of 76th AGM.
The Auditorâs report to the shareholders on the standalone and consolidated financial statement for the year ended March 31, 2018 does not contain any qualification, observation or adverse comment.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr.K.Bashyam (FCS No.600), Practicing Company Secretary, Madurai to undertake the secretarial audit of the company for the financial year ended March 31, 2018. The Secretarial Audit Report is enclosed in this report as Annexure III. The Secretarial Audit report does not contain any qualifications, reservation or adverse remark.
COST AUDITORS
Mr. V. Balasubramanian, Cost Accountant was appointed as Cost Auditor for auditing the cost accounts of the Company for the year ended 31st March, 2018. The Cost Audit Report for the fi nancial year 2017-18 will be submitted to the Central Government before due date.
The Board of Directors of the Company have appointed Mr. B. Venkateshwar, Practicing Cost Accountant, holding Membership No.27622 as Cost Auditor for the year ending 31st March 2019.
In accordance with the provision of Section 148(3) of the Companies Act 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the members of the Company. Appropriate resolution forms part of the Notice convening the AGM.
INTERNAL AUDITORS
The company has appointed M/s. Capri Assurances and Advisory Services, Chartered Accountants as Internal Auditors of the Company for two financial years viz., 2017-18 and 2018-19.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual return in form MGT- 9 as per the provisions of the Companies Act 2013 and Rules thereto are annexed to this report. Annexure II
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 134(5) of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) the Directors have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2018 and of the profit of the company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal fi nancial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors had devised proper system to ensure that systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of remuneration of not less than Rs.1.02 crores during the year or Rs.8.50 lakhs per month during any part of the said year as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
RATIO OF REMUNERATION OF DIRECTOR
As per Section 197 (12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the details of Ratio of Remuneration to each Director to the median employee''s remuneration is furnished as Annexure VI.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of the Company have constituted a CSR Committee. The Committee comprises of three Directors comprising of two Independent Directors and one Whole Time Director. The company spends 2% of the average net profit of the previous three years for CSR activities. The CSR activities are mainly focused on Education and Health Care. The CSR Policy is available on the website of the company
During the year the company has contributed to a Charitable Trust a sum of Rs.47.49 Lakhs in accordance with the provisions u/s .135 of the Companies Act, 2013 for spending towards CSR activities. Annual Report on CSR activities is enclosed as Annexure IV.
CEO / CFO CERTIFICATION
In accordance with Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a certificate on the Financial Statements and Cash Flow Statement of the company for the year ended March 31, 2018 duly signed by CEO and CFO was submitted to the Board of Directors and the same is attached as Annexure VII.
CORPORATE GOVERNANCE
The company has taken adequate steps to adhere to all the conditions laid down in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with respect to Corporate Governance. A report on Corporate Governance is included as a part of this annual report as Annexure VIII.
A Certificate from the Statutory Auditors of the Company confirming the compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual report.
RELATED PARTY TRANSACTIONS
Related party transactions that were entered during the financial year were on an armâs length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Companyâs Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its approval.
Particulars of contracts or arrangements with related parties referred to in section 188(1) of the companies Act, 2013 in the prescribed form AOC-2 is attached as Annexure V. Also Refer Note No.43 of Financial statement which sets out the transactions with related parties.
The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Regulations. This Policy was considered and approved by the Board has been uploaded on the website of the Company.
BOARD EVALUATION
As required under the provisions of Section 134(3) (p) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out a formal annual evaluation of its own performance, and that of its committees and individual directors based on the guideline formulated by the Nomination & Remuneration Committee.
Further the Independent Directors of the Company met once during the year to review the performance of non-independent directors, performance of the Chairman and performance of the board as a whole.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a policy on familiarisation programme for Independent Directors of the Company.
The Policy on Familiarisation Programme as approved can be viewed on the Companyâs website.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, the company has framed a Vigil Mechanism/Whistle Blower Policy. The Vigil Mechanism Policy has been posted on the website of the Company.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013
During the year under review, there were no cases fled pursuant to the provisions of the Act.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is furnished in Annexure I to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the company and its future operations.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifi es the internal control and monitors them in accordance with policy adopted by the company.
RISK MANAGEMENT
The Board members are regularly informed about risk assessment and minimization procedures after which the board formally adopted steps for framing, implementing and monitoring the Risk Management plan for the company.
All the risk associated with the business of the company have been taken care of by adequate measures by the company.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year, the company has transferred Rs.10,88,210/-being the dividend amount which was due and payable and remained unclaimed and unpaid for a period of 7 years to Investor Education and Protection Fund as per the requirements of the Companies Act, 2013.
Pursuant to the provisions of Section 124 and rules and regulation made thereunder and other provisions of the Companies Act, 2013, the dividends which remain unpaid or unclaimed for a period of 7 years from the respective dates of transfer to the unpaid dividend account of the company are due for transfer to the Investor Education and Protection Fund (IEPF).
Members who have so far not encashed the dividend warrants for the above years are advised to submit their claim to the Companyâs R&TA at the aforesaid address immediately quoting their folio number / DP ID and Client ID.
PUBLIC DEPOSITS
During the year the company has not accepted deposit from the public falling within the ambit of section 73 of the Companies Act 2013 and the Companies (Acceptance of deposits) Rules 2014.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Independent directors have submitted their disclosure to the Board confi rming that they fulf i l l the requirements as to qualify for their appointment as an Independent Director under the provisions of Section 149 of the Companies Act, 2013 as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Board confirms that the said Independent Directors meet the criteria as laid down under the Companies Act, 2013 as well as SEBI Listing Regulations.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Refer Note No.5).
LISTING
The Companyâs equity shares are listed on the Bombay Stock Exchange, Mumbai.
Due dates for transfer of Unclaimed Dividends to the IEPF is given below:
Financial Year |
Rate of Dividend |
Date of Declaration of Dividend |
Date of Dividend transfer to unpaid Dividend Account |
Last date for Claiming unpaid dividend |
Due for Transfer to IEPF |
2010 -2011- Final |
39% |
24-08-2011 |
29-09-2011 |
24-08-2018 |
24-09-2018 |
2011-2012 |
10% |
22-08-2012 |
27-09-2012 |
23-08-2019 |
23-09-2019 |
2012-2013 |
50% |
23-09-2013 |
28-10-2013 |
30-08-2020 |
30-09-2020 |
2013-2014 |
75% |
11-09-2014 |
16-10-2014 |
28-08-2021 |
28-09-2021 |
2014-2015 |
75% |
24-09-2015 |
29-10-2015 |
29-09-2022 |
29-10-2022 |
2015-2016 |
100% |
14-09-2016 |
29-10-2016 |
29-09-2023 |
29-10-2023 |
2016-2017 |
100% |
25-09-2017 |
25-10-2017 |
25-09-2024 |
25-10-2024 |
ENHANCING SHAREHOLDERSâ VALUE
The company believes in the importance of its Members who are among its most important stakeholders. Accordingly, the companyâs operations are committed to the goal of achieving high levels of performance and cost effectiveness, growth building, enhancing the productive asset and resource base and nurturing overall corporate reputation. The company is also committed to creating value for its stakeholders by ensuring that its corporate actions have positive impact on the socioeconomic and environmental growth and development
ACKNOWLEDGEMENT
The Board has pleasure in recording its appreciation for the assistance, cooperation and support extended to the company by the banks and the government departments.
The Board also places on record its sincere appreciation of the response received from the companyâs valuable customers and thanks them for their continued support.
The company is grateful to all the employees for their continued co operation extended to the company. Their contribution has been outstanding and the Directors place on record their appreciation for the same.
The Directors also thanks the shareholders for their support and for the confidence they have reposed in the company.
CAUTIONARY STATEMENT
Statements in the Boardâs report and the Management Discussion & Analysis describing the Companyâs objectives, expectations or forecasts may be forward - looking within the meaning of applicable securities, laws and regulations. The Company cannot guarantee the accuracy of assumptions and the projected future performance of the Company. The actual results may materially differ from those expressed of implied in this report. Important factors that could inf uence the Companyâs operations include global and domestic demand and supply conditions affecting selling price of finished goods, input availability and prices, changes in government regulations, tax laws, economical developments within the country and other factors such as litigation and industrial relations.
For and on behalf of the Board of Directors
VALLI M RAMASWAMI P. MANIVANNAN
Whole Time Director Whole Time Director
Place: Chennai
Date: 25th May, 2018
Mar 31, 2015
The Directors have great pleasure in presenting their 69th Report on
the business and operations of the Company together with the audited
statement of accounts for the year ended 31st March 2015.
1. SUMMARISED FINANCIAL HIGHLIGHTS
Financial results for the year under review are as follows:
Rs. in crore,
except Earning per share data
Particulars Standalone Consolidated
Particulars 2014-2015 2013-2014 2014-2015
GROSS PROFIT 160.84 179.64 163.29
Less : Interest 68.84 75.81 69.23
OPERATING PROFIT 92.00 103.83 94.06
Less : Depreciation 82.30 70.86 82.93
PROFIT BEFORE TAX 9.70 32.97 11.12
Less: Current Tax 3.45 7.50 4.05
PROFIT AFTER CURRENT TAX 6.25 25.47 7.08
Less: Excess Provision for FBT (0.02) NIL (0.02)
of earlier years reversed
Less: Deferred tax (8.72) 8.57 (8.72)
Less: MAT credit NIL (2.80) NIL
PROFIT AFTER DEFERRED 14.99 19.70 15.82
TAX
Add : Surplus brought forward 33.73 20.50 39.69
from previous year
Less: Dividend Tax 0.74 0.61 0.74
Less: Proposed Dividend on 3.61 3.61 3.61
Equity Shares (75%)
Less: Withdrawal on account of 8.45 NIL 8.45
Depreciation as per Schedule II
of the Companies Act, 2013
Add: Reversal of Deferred 2.87 NIL 2.87
Tax Liability on account of Transition
Less: Transfer to General Reserve 1.50 2.25 1.55
Balance carried to next year 37.29 33.73 44.03
Earning Per Share
Basic  EPS Per Share 31.13 40.91 32.86
Diluted ÂEPS per Share 31.13 40.91 32.86
2. DIVIDEND
Your Directors recommend a Dividend of Rs.7.50 (75%) per equity share
of Rs.10/- each for the financial year ended 31st March 2015 amounting
to Rs.3.61 Crores on which Dividend distribution tax comes to Rs. 0.74
Crores.
The Dividend will be paid to members whose names appear in the Register
of Members as on 28th August 2015 and in respect of shares held in
dematerialized form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
Depository Services (India) Limited, as beneficial owners as on that
date.
3. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was Rs.4.82
crores. During the year under review the company has not issued any
shares or any convertible instruments.
4. PERFORMANCE REVIEW, MANAGEMENT DISCUSSIONS, ANALYSIS REPORT AND
OUTLOOK FOR THE CURRENT YEAR
The year under review has been a challenging one for the textile
industry at large and units in Tamilnadu mills faced more problems due
to the poor power situation, forcing mills to buy most of the power
required from outside sources.
The windmill power evacuation continues to be going from bad to worse,
this year too nearly 3 Crore units produced by the company did not get
evacuated, causing a huge loss to our company.
Textile markets in India and globally was severely impacted as the
prices of raw materials kept dropping right through the financial year,
creating a steady loss in the inventories.
Domestic markets remain weeker than international markets.
The total term loans stand at Rs.308.52 Crores reduced from Rs.341.12
Crores at the end of last fiscal year. Our efforts to deleverage and
reduce overall debt is on track.
During the first half of the year, our garment turnover dropped, as our
main buyer of our Italian company was doing stock correction at their
end in view of falling prices. However the order booking picked up in
the second half and continues to be strong.
We have enjoyed cordial relationship with all our stake holders.
We have won several export awards, 5S awards, QC awards and recognition
for our CSR full conduct of business.
New businesses :
During the year a 3.3 MW solar power plant has been commissioned at
Sattur unit, this is expected to produce nearly 50 lac units per year.
Loyal International Sourcing Private Limited is wholly owned subsidiary
company of Loyal Textile Mills Limited has been incorporated and
commenced its operations during the year, which will source garments
for overseas retail chains.
A Joint Venture has been established in Portugal to secure orders for
fashion garments from higher end brand names together with a small
manufacturer in Portugal, who has the capability of developing a
collection and making small orders for fast turnaround.
Italian Joint Venture
Italian Joint Venture is performing satisfactorily, and has made a
profit of 4.67 Lakh Euros pre tax and 2.99 Lakh Euros post tax despite
a drop in turnover.
5. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs.6.34 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules 2001. Members who have not encashed the Dividend
warrants for the financial year ended 2006-2007 and/or any subsequent
years are requested to write to the Company with necessary details
before 01.09.2014.
6. EXPORTS
During the year under review, the company exported goods to the tune of
Rs. 1220.25 Crores (Previous year Rs.1282.29 Crores).
7. MODERNISATION
A sum of Rs.57.11 Crores (previous year Rs.52.01 Crores) was spent on
modernization/ replacement of plant and machinery during the year under
review.
8. CREDIT FACILITIES / FINANCE
During the year, the company availed term loans to the tune of Rs.34.79
Crores and repaid loans to the extent of Rs.67.39 Crores to
Banks/Financial institutions.
9. FIXED DEPOSITS
During the year all deposits were repaid and there is no unpaid
deposits held in our company.
Rs. In Lakhs
Opening 4.47
Add : Availed during the year NIL
Less : Repaid During the year 4.47
Closing NIL
10. DONATION
During the year 2015-16 the Company has paid a donation of Rs.136
Lakhs.
11. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule, 8 of The Companies
(Accounts) Rules, 2014, is annexed herewith as Annexure -A.
12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) read with Rule
5(2) and Rule 5 (3) of The Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 in respect of employees of the
Company and Directors is attached as Annexure  B to this report.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules,2014 are provided in the Annexure  B to this report.
13. REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report as
Annexure - C. The Company has complied with the conditions of corporate
governance as stipulated in Clause 49 of the Listing Agreement. The
Managing Director has given a certificate of Compliance with the Code
of Conduct, which forms part of Annexure  C as required under Clause
49 of the Listing Agreement.
The Statutory Auditors of the Company have examined the requirements of
Corporate Governance with reference to Clause 49 of the Listing
Agreement and have certified the compliance, as required under Clause
49 of the Listing Agreement.
The Certificate in this regard is attached as Annexure-D to this
Report.
The Managing Director and Chief Financial Officer (CFO) certification
as required under Clause 41 of the Listing Agreement is attached as
Annexure ÂE to this report.
14. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company prepared in
accordance with relevant Accounting Standards (AS) viz. AS 21, and AS
27 prescribed under Companies (Accounting Standards) Rules, 2006.
15. SUBSIDIARIES AND JOINT VENTURES
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules, 2014, the statement containing
salient features of the financial statements of the Company's
Subsidiaries and Joint Ventures (in Form AOC-1) is attached to the
financial statements.
Loyal International Sourcing Private Limited (100 % Wholly Owned
Subsidiary Company) is started during the year.
The Equity Shares of M/s. Shri Teyem Processors Limited and M/s.
Uniloyal Expotex Limited which were hitherto held in investment, have
been sold during the year.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of section 135 and Schedule VII of the Companies Act, 2013,
the Board of Directors of your Company have constituted a CSR
Committee. The Committee comprises of three Directors out of which two
Directors are Independent Directors and other Director is a Whole Time
Director. CSR Committee of the Board has developed a CSR Policy under
Health Care activities and Educational Activities which is enclosed as
part of this report Annexure - F. The CSR Policy is available at
www.loyaltextiles.com under investor info/ policy documents / CSR
Policy link.
The company has contributed to a Charitable Trust a sum of Rs. 70.
Lakhs which is more than the amount required to be spent u/s.135 of the
Companies Act, 2013. The details of amount spent and category, will be
published in the next report.
17. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In pursuant to the provisions of section 177(9) & (10) of the Companies
Act, 2013, a Vigil Mechanism for Directors and employees to report
genuine concerns has been established.
The Vigil Mechanism Policy has been uploaded on the website of the
Company at http://www.loyaltextiles.com under investor info/ policy
documents/ Whistle Blower Policy link.
18. RELATED PARTY TRANSACTIONS
Related party transactions that were entered during the financial year
were on an arm's length basis and were in the ordinary course of
business. There were no materially significant related party
transactions with the Company's Promoters, Directors, Management or
their relatives, which could have had a potential conflict with the
interests of the Company. Transactions with related parties entered by
the Company in the normal course of business are periodically placed
before the Audit Committee for its omnibus approval.
Particulars of contracts or arrangements with related parties referred
to in section 188(1) of the companies Act, 2013 in the prescribed form
AOC-2 is attached as Annexure  G. Also Refer Note No.47 of Financial
statement which sets out the transactions with related parties.
The Board of Directors of the Company has, on the recommendation of the
Audit Committee, adopted a policy to regulate transactions between the
Company and its Related Parties, in compliance with the applicable
provisions of the Companies Act 2013, the Rules there under and the
Listing Agreement. This Policy was considered and approved by the Board
has been uploaded on the website of the Company at
www.loyaltextiles.com under investor info/ policy documents Related
Party Transaction Policy link.
19. RISK MANAGEMENT POLICY
In accordance with Clause 49 of the Listing Agreement the board members
were informed about risk assessment and minimization procedures after
which the board formally adopted steps for framing, implementing and
monitoring the risk management plan for the company.
The main objective of this policy is to ensure sustainable business
growth with stability and to promote a pro-active approach in
reporting, evaluating and resolving risks associated with the business.
In order to achieve the key objective, the policy establishes a
structured and disciplined approach to risk management, in order to
guide decisions on risk related issues.
In today's challenging and competitive environment, strategies for
mitigating inherent risks in accomplishing the growth plans of the
company are imperative. The common risks inter alia are: regulations,
competition, business risk, technology obsolescence, investments, and
retention of talent and expansion of facilities.
Business risk, inter-alia, further includes financial risk, political
risk, fidelity risk and legal risk.
As a matter of policy, these risks are assessed and steps as
appropriate are taken to mitigate the same.
20. REMUNERATION POLICY OF THE COMPANY
The remuneration policy of the company comprising the appointment and
remuneration of the Directors, Key Managerial Personnel and Senior
Executives of the Company including criteria for determining
qualifications, positive attributes, independence of a Director and
other related matters has been provided in the Corporate Governance
Report which is attached as Part III to Para- 2 of Annexure  C to this
report.
21. DIRECTORS, KEY MANAGERIAL PERSONNEL & COMMITTEES
At the 68TH Annual General Meeting of the company held on 11th
September, 2014 the company had appointed the existing independent
directors Shri K.J.M Shetty (DIN 00033296), Shri.S.Venkataramani (DIN
00053043), Shri.R.Poornalingam (DIN. 00955742), Shri. Shridhar
Subrahmanyam (DIN. 01780475) and, Shri. M. Madhavan Nambiar (DIN.
03487311) as independent directors not liable to retire by rotation
under the companies Act, 2013 for 3 consecutive years for a term up to
the conclusion of the 71st Annual General Meeting.
The Key Managerial personnelÂs namely Company Secretary Mr.M.Arumugam
was appointed in the Board Meeting held on 12th August 2013 and Chief
Financial Officer Mr.R.Mohan was appointed during the year in the Board
Meeting held on 01st August 2014.
All independent directors have given declaration that they meet the
criteria of independence as laid down under section 149(6) of the
Companies Act, 2013 and Clause 49 of Listing Agreement.
At a Board Meeting held on 11th February 2015 the board had appointed
Smt. Valli M Ramaswami (DIN 00036508) as an Additional director (Woman
director) and in the same Board Meeting she was appointed as a Whole
Time Director of the company.
21.1 AUDIT COMMITTEE
The company is having Audit Committee comprising of following
Directors.
NAME STATUS CATEGORY
Shri. K.J.M.Shetty Chairman Independent Director
Shri.S.Venkataramani Member Independent Director
Shri.Shridhar Member Independent Director
Subrahmanyam
21.2 NOMINATION AND REMUNERATION COMMITTEE
The company is having a Nomination and Remuneration Committee
comprising of the following directors:
NAME STATUS CATEGORY
Shri. K.J.M.Shetty Chairman Independent Director
Shri.S.Venkataramani Member Independent Director
Shri.R.Poornalingam Member Independent Director
21.3 CSR COMMITTEE
The company is having a Corporate Social Responsibility Committee
comprising of the following directors:
NAME STATUS CATEGORY
Shri. K.J.M.Shetty Chairman Independent Director
Shri. M. Madhavan Nambiar Member Independent Director
Shri.P.Manivannan Member Whole Time Director
21.4 STAKEHOLDERS' RELATIONSHIP COMMITTEE
The company is having a Stakeholders' Relationship Committee comprising
of the following directors:
NAME STATUS CATEGORY
Shri. K.J.M.Shetty Chairman Independent Director
Shri.S.Venkataramani Member Independent Director
Shri.P.Manivannan Member Whole Time Director
21.5 RISK MANAGEMENT COMMITTEE
The company is having a Risk Management Committee comprising of the
following directors:
NAME STATUS CATEGORY
Shri. Manikam Ramaswami Chairman Managing Director
Shri.P.Manivannan Member Whole Time Director
Shri.M.E.Manivannan Member Senior Vice President (Operations)
22. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and
protect from loss, unauthorized use or disposition of its assets. All
the transactions are properly authorized, recorded and reported to the
Management. The Company is following all the applicable Accounting
Standards for properly maintaining the books of accounts and reporting
financial statements. The internal auditor of the company checks and
verifies the internal control and monitors them in accordance with
policy adopted by the company.
23. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a) in the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards have been followed along
with proper explanation relating to material departures;
b) the Directors have selected such accounting policies and applied
them consistently and made judgements 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 March 31, 2015 end of the profit of the company
for the year ended on that date ;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
d) the Directors have prepared the annual accounts on a going concern
basis;
e) the Directors have laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors had devised proper system to ensure that systems to
ensure compliance with the provisions of all applicable laws and that
such systems are adequate and operating effectively.
24. LISTING
The Company's equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fee for the financial year 2014 Â 2015
has been paid to BSE and the Annual Custodian fee has been paid to the
NSDL and CDSL for the financial year 2014-15
25. AUDITORS
25.1 STATUTORY AUDITORS
M/s. Suri & Co (Firm Regn No:004283S.), Chartered Accountants, have
been appointed as statutory auditors of the company at the 68th Annual
General Meeting held on 11.09.2014 for a period of three years subject
to ratification by members at every consequent Annual General Meeting.
Therefore, ratification of appointment of Statutory Auditors is being
sought from the members of the Company at the ensuing AGM.
The Statutory Auditors' Report to the shareholders does not contain any
qualification.
25.2 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. Krishna Sharan
Mishra (FCS No.6447) representing KSM Associates, Company Secretaries,
Chennai, to undertake the secretarial audit of the company. The
Secretarial Audit Report is annexed herewith as Annexure - H.
The Secretarial Auditors' Report to the shareholders does not contain
any qualification.
25.3 INTERNAL AUDITORS
M/S. SLSM & CO, Associates, Chartered Accountants performs the duties
of internal auditors of the company and their report is reviewed by the
audit committee from time to time.
25.4 COST AUDITOR
Mr.V.Balasubramanian, Cost Accountant was appointed as Cost Auditor for
auditing the cost accounts of your Company for the year ended 31st
March, 2015 by the Board of Directors. The Cost Audit Report for the
year 2013-14 has been fled under XBRL mode within the due date of
fling.
26. EXTRACT OF ANNUAL RETURN
An extract of the Annual return in form- MGT- 9 as on March 31, 2015 is
attached as Annexure  I to this report.
27. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or
investments or guarantee or security is proposed to be utilized by the
recipient are provided in the standalone financial statement (Refer
Note No. 11).
28. BUSINESS RESPONSIBILITY STATEMENT
1. The company shall comply with all the statutes and the rules of
regulating authorities.
2. It is the responsibility of the company to share the wealth of the
company with our Share holders.
3. When it comes to the caring of environment, Loyal does not believe
in seeking benefits from the government but leaving it with the
government for greater good and being morally fair to our customers,
employees, suppliers etc., The Company has great respect for
environment.
4. Believe in empowering the society through education.
29. GENERAL
A. Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
3. Neither the Managing Director nor the Whole- time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
4. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future. Attention is drawn to the Note No. 39 regarding
letter from BSE for which suitable reply has been fled.
B. A copy of the Financial Statements including Consolidated Financial
Statements, Directors Report, Auditors Report etc., is available at the
Registered office of the Company for the inspection of the members of
the company during the office hours up to the date of Annual General
Meeting.
C. The Company has not furnished the statement of Changes in Equity as
the required format has not yet been prescribed.
D. Your Directors further state, as per information furnished by POSH
Committee, during the year under review, there were no cases fled
pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
30. ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank and State Bank of Mysore. Your
Directors appreciate the continued co- operation extended by staff and
workers of the company and look forward to the same cordial
relationship in the coming years.
For and on behalf of the Board of Directors
P. MANIVANNAN MANIKAM RAMASWAMI
Whole Time Director Managing Director
Place: Chennai
Date: 28th May 2015
Mar 31, 2014
Dear members,
The Directors have great pleasure in presenting their 68th Annual
Report on the business and operations of the Company together with the
audited statement of accounts for the year ended 31st March 2014.
WORKING RESULTS
Financial results for the year under review are as follows :
(Rs. in Crores)
Year ended 31st March 2014
GROSS PROFIT 179.64
Less : Interest 75.81
OPERATING PROFIT 103.83
Less : Depreciation 70.86
PROFIT BEFORE TAX 32.97
Less: Current Tax 7.50
PROFIT AFTER CURRENT TAX 25.47
Provision for Deferred tax Liability 8.57
MAT Credit (2.80)
PROFIT AFTER DEFERRED TAX 19.70
Add : Surplus brought forward from previous year 20.50
Less : Dividend Tax 0.61
Less : Proposed Dividend on Equity Shares (75%) 3.61
Less : Transfer to General Reserve 2.25
BALANCE CARRIED TO NEXT YEAR 33.73
DIVIDEND
Your Directors recommend a dividend of Rs. 7.50 (75%) per equity shares
of Rs.10/- each for the financial year ended 31st March 2014
PERFORMANCE REVIEW, MANAGEMENT DISCUSSIONS, ANALYSIS REPORT AND OUTLOOK
FOR THE CURRENT YEAR :
The performance during the year 2013-2014 under review was
satisfactory.
We had completed the laying of dedicated electrical lines to all our
units, this proved very useful. We were able to get better quality of
power and were able to wheel the power we produced through wind mills
and purchased power.
However the poor evacuation of power generated by our wind mills caused
a huge loss of about Rs. 15 crores.
Quality of power however continues to be very poor, the number of
tripping, power outage due to poor quality of distribution
infrastructure continues to be a serious problem.
The textile markets by and large remained good and we were able to
increase our turnover substantially. Exports of yarn however did not
result in profits due to large scale default of contracts by Chinese
importers.
We invested 32.75 crores in capital equipments, availed 32.75 crores
new term loans and repaid 74.64 crores term loans.
The total term loans stand at Rs. 341.08 crores reduced from Rs. 383.22
crores at the end of last fiscal year. Our efforts to deleverage our
debt is on track.
We have been able to identify new markets for all our products and will
be able to increase value added exports in the coming year.
We have enjoyed cordial relationship with all our stake holders
We have won several export awards, 5S awards, QC awards and recognition
for our CSR full conduct of business.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs. 5.67 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules, 2001. Members who have not encashed the Dividend
warrants for the financial year ended 2006- 2007 and/or any subsequent
years are requested to write to the Company with necessary details
before 01.09.2014.
EXPORTS
During the Year under review, the company exported goods to the tune of
Rs. 1282.29 crores.
MODERNISATION :
A sum of Rs. 52.01 Crores (Previous year Rs. 74.60 Crores) was spent on
modernization / replacement of plant and machinery during the year
under review.
FINANCE :
During the year, the Company availed term loans to the tune of Rs.32.74
Crores and repaid loans to the extent of Rs. 74.56 Crores to Banks/
Financial institutions.
FIXED DEPOSITS :
Deposits aggregating to Rs. 1.70 lakhs remained unclaimed as on 31st
March 2014. No deposit has since been renewed / repaid.
DONATION :
During the year 2013-2014 the company has paid a donation of Rs. 205.61
Lakhs.
DIRECTORS :
In accordance with the provisions of the Companies Act, 2013, Mr.
K.J.M. Shetty, Director and Mr. Madhavan Nambiar, Director retire by
rotation and are eligible for reappointment.
DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956.
The Directors hereby state :-
I) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures.
ii) that the directors have selected such accounting policies and
applied them consistently and made judgements 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 year;
iii) 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;
iv) that the directors have got prepared the annual accounts on a going
concern basis.
LISTING :
The Company''s equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fees for the financial year 2014-2015 has
been paid to BSE and the Annual Custodian fee has been paid to the NSDL
and CDSL for the financial year 2014-15.
AUDITORS :
M/s. Suri & Co., Chartered Accountants, Auditors of the Company retires
at this Annual General Meeting and are eligible for reappointment. The
Company has received a letter from M/s. Suri & Co to the effect that
their appointment as auditors, if made, would be within the limits as
provided under the required provisions of the companies Act, 2013.
The Auditors Report to the shareholders does not contain any
qualification.
COST AUDITOR
The Central Government has approved the appointment of Mr.
V.BALASUBRAMANIAN as Cost Auditor of the Company to do Cost Audit for
the financial year 2014-15.
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report.
The Company has complied with the conditions of Corporate governance as
stipulated in clause 49 of the listing agreement. The certificate
obtained from the auditors of the Company regarding compliance of
conditions is annexed to this report.
PARTICULARS OF EMPLOYEES :
As required by Section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975, a statement of
information relating to the employees has been given in the Annexure,
which forms part of this Report.
PARTICULARS OF ENERGY CONSUMPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required as per Section 217 (1)(e) of the Companies
Act, 1956, read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is given in the annexure, which
forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank, State Bank of Mysore and Indian
Overseas Bank. Your Directors appreciate the continued co- operation
extended by staff and workers of the company and look forward to the
same cordial relationship in the coming years.
For and on behalf of the Board of Directors
Place : CHENNAI MANIKAM RAMASWAMI
Date : 23 May, 2014. Chairman & Managing Director
Mar 31, 2013
TO THE MEMBERS
The Directors have great pleasure in presenting their 67th Annual
Report on the business and operations of the Company together with the
audited statement of accounts for the year ended 31st March 2013.
WORKING RESULTS
Financial results for the year under review are as follows :
(Rs. in Crores)
Year ended 31st March 2013
GROSS PROFIT 142.04
Less : Interest 61.72
OPERATING PROFIT 80.32
Less : Depreciation 69.11
PROFIT BEFORE TAX 11.21
Less: Current Tax 3.02
PROFIT AFTER CURRENT TAX 8.19
Provision for Deferred tax Liability 15.00
MAT Credit (11.85)
PROFIT AFTER DEFERRED TAX 5.04
Add : Surplus brought forward
from previous year 19.29
Less : Dividend Tax 0.42
Less : Proposed Dividend
on Equity Shares (50%) 2.41
Less : Transfer to General Reserve 1.00
BALANCE CARRIED TO NEXT YEAR 20.50
DIVIDEND
Your Directors recommend a dividend of Rs. 5.00 (50%) per equity shares
of Rs.10 each/- for the financial year ended 31st March 2013
PERFORMANCE REVIEW, MANAGEMENT DISCUSSIONS, ANALYSIS REPORT AND OUTLOOK
FOR THE CURRENT YEAR :
The year under review, 2012-2013 was a better year than the previous
year. The ill effects of yarn export ban had been fully digested.
However the wide fluctuations in exchange rate, impacted the profit and
loss, while change over from $ packing credit to Rupee packing credit.
During the year, the direct transmission cables were laid to our
Kovilpatti unit in October and to our CTM unit during February. We have
spent over 6 crores in capital expenditure and over 2 crores in revenue
expenditure to get these direct transmission cables laid and on the
creation of the substation. The power situation at both units have
improved since, CTM unit has since turned profitable.
India''s textile competitiveness is gradually improving and today at the
yarn stage we are the most competitive manufacturer globally, at the
fabric stage there are a few smaller manufacturers who are apparently
more competitive but in real terms are not due to severe power
constraints besides socio - political issues.
Our turnover increased to Rs. 1247.39 crores and exports increased to
Rs. 935.42 crores.
The total cash generated before interest, depreciation and taxes is Rs.
142.04 crores. After interest, and taxes it is Rs. 74.15 crores. The
net profit after all expenses and provisions is Rs. 5.04 crores. The
Dividend proposed is 50% and would need Rs. 2.41 crores.
During the year Rs. 75.80 crores of capital work was undertaken.
Additional borrowings were Rs. 31.00 crores. The net reductiion in
borrowings net of new borrowings is Rs. 37.54 crores. We have after
many years started reducing the total borrowings even as we are
steadily improving our turnover.
We were able to tighten the receivables and keep a tight control over
inventories during the year which helped in improved cash flow.
The prospects for the current year appears to be better and we hope to
improve both Top and Bottom line by at least 20%
We enjoyed excellent industrial relation at all our unit and the
employee strength stands at 5948.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs. 5.47 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules, 2001. Members who have not encashed the Dividend
warrants for the financial year ended 2005-2006 and/or any subsequent
years are requested to write to the Company with necessary details
before 27.10.2013.
EXPORTS
During the Year under review, the company exported goods to the tune of
Rs. 935.42 crores.
MODERNISATION :
A sum of Rs. 74.60 Crores (Previous year Rs. 151.42 Crores) was spent
on modernization / replacement of plant and machinery during the year
under review.
FINANCE :
During the year, the Company availed term loans to the tune of Rs.31.00
Crores and repaid loans to the extent of Rs. 74.68 Crores to Banks/
Financial institutions.
FIXED DEPOSITS :
4 deposits aggregating to Rs. 0.92 lakhs remained unclaimed as on 31st
March 2013. No deposit has since been renewed / repaid.
DONATION :
During the year 2012-2013 the company has paid a donation of Rs.101.47
Lakhs.
DIRECTORS :
In accordance with the provisions of the Companies Act, 1956, Mr. R.
Poornalingam, Director and Mr. Shridhar Subrahmanyam, Director retire
by rotation and are eligible for reappointment.
DIRECTOR''S RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956.
The Directors hereby state :-I) that in the preparation of the annual
accounts, the applicable accounting standards have been followed and
there are no material departures.
ii) that the directors have selected such accounting policies and
applied them consistently and made judgements 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 year;
iii) 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;
iv) that the directors have got prepared the annual accounts on a going
concern basis.
LISTING :
The Company''s equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fees for the financial year 2013-2014 has
been paid to BSE and the Annual Custodian fee has been paid to the NSDL
and CDSL for the financial year 2013-14.
AUDITORS :
M/s. Suri & Co., Chartered Accountants, Auditors of the Company retires
at this Annual General Meeting and are eligible for reappointment. The
Company has received a letter from
M/s. Suri & Co to the effect that their appointment as auditors, if
made, would be within the limits of Section 224(1-B) of the Companies
Act, 1956.
The Auditors Report to the shareholders does not contain any
qualification except for the observation made by the Auditors regarding
change in the method of depreciation on windmills and its effect on
profit / assets.
COST AUDITOR
The Central Government has approved the appointment of Mr.
V.BALASUBRAMANIAN as Cost Auditor of the Company to do Cost Audit for
the financial year 2012-13.
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report.
The Company has complied with the conditions of Corporate governance as
stipulated in clause 49 of the listing agreement. The certificate
obtained from the auditors of the Company regarding compliance of
conditions is annexed to this report.
PARTICULARS OF EMPLOYEES :
As required by Section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975, a statement of
information relating to the employees has been given in the Annexure,
which forms part of this Report.
PARTICULARS OF ENERGY CONSUMPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required as per Section 217 (1)(e) of the Companies
Act, 1956, read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is given in the annexure, which
forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank, State Bank of Mysore and Indian
Overseas Bank. Your Directors appreciate the continued co- operation
extended by staff and workers of the company and look forward to the
same cordial relationship in the coming years.
For and on behalf of the Board of Directors
Place : CHENNAI MANIKAM RAMASWAMI
Date : 24th May, 2013. Chairman & Managing Director
Mar 31, 2012
The Directors have great pleasure in presenting their 66 th Report on
the business and operations of the Company together with the audited
statement of accounts for the year ended 31st March 2012.
WORKING RESULTS
Financial results for the year under review are as follows :
(Rs. in Crore)
For Year ended 31st March 2012
GROSS PROFIT 103.29
Less : Interest 43.79
OPERATING PROFIT 59.5
Less : Depreciation 66.2
LOSS BEFORE TAX (6.70)
Add : Excess Provision
Written Back 2.31
LOSS AFTER CURRENT TAX (4.40)
Provision for Deferred Tax - Asset 2.45
LOSS AFTER DEFERRED TAX (1.95)
Add : Surplus brought forward
from previous year 24.22
PROFIT FOR THE YEAR CARRIED TO THE NEXT YEAR 22.28 PROPOSED DIVIDEND ON
EQUITY SHARES (10%) 0.48 PROVISION FOR TAX ON DISTRIBUTED PROFITS 0.08
TRANSFER TO GENRAL RESERVE 2.43 BALANCE CARRIED TO NEXT YEAR 19.29
DIVIDEND
Your Directors recommend a dividend of Rs.1.00 (10%) per equity shares
of Rs. 10 each/- for the financial year ended 31st March 2012 out of
free reserves of the Company.
PERFORMANCE REVIEW, MANAGEMENT DISCUSSION, ANALYSIS REPORT AND OUTLOOK
FOR THE CURRENT YEAR :
The year 2011 -2012 was an extremely challenging year, especially for
textile mills in South India.
Last year's government decision to first ban cotton and later yarn
had destroyed demand due to huge price increase that happened while the
export ban was in force in the International markets. The ban ensured
that Indian mills did not benefit from the high prices but were
severely impacted when prices crashed to 50% level post lifting of the
ban.
When trading conditions slowly returned to normal from the impact of
Indian governments inexplicable actions. Both Tamilnadu and Andhra
Pradesh where we have our units faced severe power problems and the
mills were badly impacted.
35% power shortage in Tamilnadu resulted in almost 90% shortage to
mills and industries in South and West Tamilnadu due to TNEBs
discrimination. Units in and around Chennai, Cement, Steel, Flour mills
and a few others managed to get themselves exempt from the severe power
restrictions. This large scale discrimination resulted in others
bearing nearly 90% power cuts.
In Andhra Pradesh too the power situation was bad with up to 3 days
power holidays per week besides peak hour restrictions.
As a result of adverse trading conditions during the first half and
severe power constraints later we were forced to incur net loss.
The steep increase in interest costs, disallowance of TUF rebate for
investments made during the shadow period when the government was
contemplating of the extension of TUF etc steeply increased our
Interest burden.
Our efforts to get a dedicated line to kovilpatti unit which was
suffering over 10 hours of power outage every day being linked to
Kovilpatti town feeder fructified only in June. We have invested over 6
crores for the same. In the coming months thanks to our dedicated
feeder we will be able to get continuous power to the extent that we
generate using our wind mills and third party purchase.
We have augmented our power supply position to take our own power to
80% of our requirement by additional investment in wind mills and
purchase of power, as two of our 3 units in Tamilnadu have dedicated
feeders.
Working is going on to create a new substation near our third unit, once
the substation gets commissioned, we will be able to lay a dedicated
line to our third unit as well.
India despite its various infrastructural and policy issues is fast
emerging as the most competitive destination for yarns and grey fabric,
the few aberrations in draw back affecting fabric exports are expected
to be corrected in this years draw back policy. We expect a normal year
with reasonable net profits as we have taken adequate measures to
overcome last year's issues.
The turnover dropped marginally to Rs. 910.60 Crores due to lower per
unit realization and power constraints in spite of commissioning our
new unit.
Cash generation during the year was Rs. 59.51 Crores, Repayments made
Rs. 39.43 Crores, capital investments made Rs. 163.85 Crores, and loans
availed Rs. 98.36 Crores.
We were able to tighten the receivables and keep a tight control over
inventories during the year which helped in improved cash flow.
As we have little capital work in progress and no new projects except
the 2 wind mills we expect to have a comfortable cash flow situation
and will be able to bring down our borrowings especially the non TUF
portion during this year.
We enjoyed excellent industrial relation at all our units and the
employee strength stands at 4271.
Dividends, as we have sufficient carry forward in our profit and loss
account even though we have incurred a net loss, it is proposed to
declare a dividend of 10%.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs. 4.60 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules, 2001. Members who have not encased the Dividend
warrants for the financial year ended 2004-2005 and/ or any subsequent
years are requested to write to the Company with necessary details
before 11.07.2012.
EXPORTS
During the Year under review, the company exported goods to the tune of
Rs. 715.11 crores.
MODERNISATION :
A sum of Rs. 151.42 Crores (Previous year Rs. 128.07 Crores) was spent
on modernization / replacement of plant and machinery during the year
under review.
FINANCE :
During the year, the Company availed term loans to the tune of Rs.
98.36 Crores and repaid loans to the extent of Rs. 40.83 Crores to
Banks/ Financial institutions.
FIXED DEPOSITS :
4 deposits aggregating to Rs. 2.91 lakhs remained unclaimed as on 31st
March 2012. No deposit has since been renewed / repaid.
DONATION :
During the year 2011-2012 the company has paid a donation of Rs. 6.51
Lakhs.
DIRECTORS :
In accordance with the provisions of the Companies Act, 1956, Mr. K.J.M
Shetty, Director and Mr. S.Venkataramani Director retire by rotation
and are eligible for reappointment.
DIRECTOR'S RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956.
The Directors hereby state :-
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures.
b) 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 at the end of the financial year and of the
profit of the Company for the year;
c) 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;
d) that the directors have got prepared the annual accounts on a going
concern basis.
LISTING :
The Company's equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fees for the financial year 2012-2013 has
been paid to BSE and the Annual Custodian fee has been paid to the NSDL
and CDSL for the financial year 2012- 13
AUDITORS :
M/s. Suri & Co., Chartered Accountants, Auditors of the Company retires
at this Annual General Meeting and are eligible for reappointment. The
Company has received a letter from M/ s. Suri & Co to the effect that
their appointment as auditors, if made, would be within the limits of
Section 224(1-B) of the Companies Act, 1956.
The Auditors Report to the shareholders does not contain any
qualification.
COST AUDITOR
The Central Government has approved the appointment of Mr.
V.BALASUBRAMANIAN as Cost Auditor of the Company to do Cost Audit for
the financial year 2011-12.
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report.
The Company has complied with the conditions of Corporate governance as
stipulated in clause 49 of the listing agreement. The certificate
obtained from the auditors of the Company regarding compliance of
conditions is annexed to this report.
PARTICULARS OF EMPLOYEES :
As required by Section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975, a statement of
information relating to the employees has been given in the Annexure,
which forms part of this Report.
PARTICULARS OF ENERGY CONSUMPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required as per Section 217 (1 )(e) of the Companies
Act, 1956, read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is given in the annexure, which
forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank, State Bank of Mysore and Indian
Overseas Bank. Your Directors appreciate the continued co-operation
extended by staff and workers of the company and look forward to the
same cordial relationship in the coming years.
For and on behalf of the Board of Directors
Place: CHENNAI MANIKAM RAMASWAMI
Date : 11th May, 2012. Chairman & Managing Director
Mar 31, 2011
TO THE MEMBERS
The Directors have great pleasure in presenting their 65th Report on
the business and operations of the Company together with the audited
statement of accounts for the year ended 31st March 2011.
WORKING RESULTS
Financial results for the year under review are as follows :
(Rs. in Crore)
For Year ended 31st March 2011
GROSS PROFIT 127.79
Less : Interest 23.94
OPERATING PROFIT 103.85
Less : Depreciation 50.38
PROFIT BEFORE TAX 53.47
Less : Provision for Current Tax 14.72
PROFIT AFTER CURRENT TAX 38.75
Provision for Deferred Tax 7.37
PROFIT AFTER DEFERRED TAX 31.38
Add : Surplus brought forward from
previous year 3.72
PROFIT FOR THE YEAR
After transferring Rs. 3.20 Crore
to General Reserve,Your Directors
recommend the balance of Rs. 31.90
Crore be appropriated as under: 31.90
Interium Dividend @100% 4.70
Dividend Tax 0.78
PROPOSED DIVIDEND ON EQUITY SHARES (39%) 1.88
PROVISION FOR TAX ON DISTRIBUTED PROFITS 0.30
BALANCE CARRIED TO NEXT YEAR 24.24
DIVIDEND
The Company has paid an Interim dividend of Rs. 10/- per equity share
on 47,03,946 equity shares of Rs. 10/- each for the year ended on
31.03.2011 and your Directors recommend a Dividend of Rs. 3.90 (39%)
per equity share of Rs. 10/- each for the financial year ended 31st
March 2011.
PERFORMANCE REVIEW, MANAGEMENT DISCUSSION, ANALYSIS REPORT AND OUTLOOK
FOR THE CURRENT YEAR :
The year under-review has been a water shed for Indian spinning
industry in particular and the textile industry in general.
The Government of India restricted its cotton exports and created a
disconnect between Indian cotton prices and global cotton prices.
India cotton ruled at 15 to 20 % lower than international prices, and
this substantially helped the spinning mills to post record profits.
By the same token the government later banned yarn exports for three
and a half months, which has led to unprecedented losses to spinning
mills starting from March of 2011 and the losses will last until
October 2011; many mills may incur more losses than what they gained
through the availability of cheaper cotton.
We have always aligned our interest with that of the country, although
it was temporarily much more profitable to stay with spinning, and
expand spinning, we felt that the country will need more weaving and
knitting capacities. With increasing wages more and more of India's
large power loom capacity will become redundant and with demand for
longer piece length of defect free cloth, the demand for high quality
weaving will keep going up. Realising this medium term reality, at
Loyal we have concentrated on adding fabric making capacities ; by end
of the calendar year we would have almost doubled both weaving and
kniting capacities. Thanks to our policy of aligning with what is good
for the country and not what is best suited asper the distorted
Government policies at that point of time, which swing from one extreme
of incentivised exports of subsidised cotton to total ban on exports of
cotton or irrationally high DEPB to total withdrawal of all draw back
on cotton yarn, we are experiencing a more balanced working.
During the review period we had severe power cuts and load shedding all
of which cost us huge additional costs. Additional costs were incurred
due to purchase of very expensive third party power, in order to
overcome this additional cost as well as to have control over power
costs despite SEB's raising the tariff from time to time, we have
invested Rs. 54 crores in wind mills which would add 60,000/-units per
day on an average to our own generation, in addition we have taken up
several initiatives to reduce specific power consumption.
During this financial year we will not need to purchase any third party
power and would be saving several crores of rupees spent during the
last financial year.
Wage costs are rising steeply and availability of work force to work in
all 3 shifts is getting more and more difficult, in order to overcome
the problems caused by this factor, we are increasing the automation
and increasing the sewing machine capacity to get maximum output during
the day shift itself.
The current financial year 2011-2012 will be an extremely challenging
one, especially the first half, for the spinning mills in pariticular
and textile mills in general, as the cost of cotton, yarn and fabrics
has dropped by 50% to 20%; and the calculated loss for the textile
industry in India alone is 2 billion $ and almost another 2 billion
to textile companies in Asia, Indian Government't policy of banning
cotton exports first and later yarn exports has been mainly
responsible for this disaster, given India's prominent position in
global trade in these two commodities.
The Global demand desstruction caused due the faulty policies of the
Indian Government is seriously impacting the industry globally. In
addition the high interest rate together with slow industrial growth is
affecting the inclusive growth and the surplus available with the poor
is dropping which in turn affects textile off take in the domestic
markets. Prices have started dropping rapidly. When the new prices
reach the retail counters and demand gets restored we will see
improvements in off take and prices. It is expected, given the
inventories with the mills and trade, the improvement will happen
during the second half of the financial year.
We will however be able to weather the storm and post profits as we
have always aligned our policies with what is good for the Nation and
resisted the temptation of aligning our policies with the irrational
and temporary benefits given to different sectors from time to time
extreme swings.
The turnover increased from Rs.462.49 Crores to 962.45 Crores. It was
possible due to increased volume of trade as well as due to the
substantial increase in unit value due to inflation. Exports accounted
for 769.86 Crores, we won the award for the highest export of grey
fabrics for the 4 years in row and expect to win it again for the
current year's performance as well.
We have invested Rs 56.14 Crores in our existing facilities to improve
quality, and to reduce labour dependence and power consumption, Rs.54
Crores in wind mills and Rs.67.09 Crores in our new unit in the state
of Andhra Pradesh, which has several advantages over Tamilnadu such as
lower cost of power, less power interruption and load shedding,
transparent grid administration, lower cost of labour, lower cost of
cotton as AP is a cotton surplus state. When completed AP plant
willhave 200 looms and enough spinning to produce the required warp
yarns. Weft yarns can be sourced from the many mills in the vicinity.
Industrial relations: The Company has cordial industrial relations at
all its plants, the total employee strength stands at 4475.
Dividends : This year we have given a total dividend of 139% including
the interim dividend.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs. 3.51 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules, 2001. Members who have not encashed the Dividend
warrants for the financial year ended 2003-2004 and / or any subsequent
years are requested to write to the Company with necessary details
before 16.10.2011.
EXPORTS
During the Year under review, the company exported goods to the tune of
Rs. 769.86 crores.
MODERNISATION :
A sum of Rs. 128.07 crores (Previous year Rs. 5.94 crores) was spent on
modernization / replacement of plant and machinery during the year
under review.
FINANCE :
During the year, the Company availed term loans to the tune of Rs.
136.06 crores and repaid loans.to the extent of Rs. 28.60 crores to
Banks / Financial institutions.
FIXED DEPOSITS :
4 deposits aggregating to Rs. 2.04 lakhs remained unclaimed as on 31st
March 2011. No deposit has since been renewed / repaid.
DONATION :
During the year 2010-2011, the company have paid a donation of Rs. 2.50
crores in antacipation of the approval of the shareholders. Accordingly
the board seeks the ratification and approval during the Annual General
Meeting for the making donations upto Rs. 5 crores.
DIRECTORS :
In accordance with the provisions of the Companies Act, 1956, Mr.
R.Poornalingam, Director and Mr. P. Manivannan retire by rotation and
are eligible for reappointment.
DIRECTOR'S RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956.
The Directors hereby state :-
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures.
b) that the directors have selected such accounting policies and
appliedthem consistently and made judgements 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 year;
c) 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;
d) that the directors have got prepared the annual accounts on a going
concern basis.
LISTING :
The Company's equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fees for the year 2011-2012 has been
paid.
AUDITORS :
M/s. Suri & Co., Chartered Accountants, Auditors of the Company retire
at this Annual General Meeting and are eligible for
..reappointment. The Company has received a letter from
M/s. Suri & Co to the effect that their appointment as auditors, if
made, would be within the limits of Section 224(1 -B) of the Companies
Act, 1956.
The Auditors Report to the shareholders does contain a qualifications
with regard to the payment of (he DuntUiun of Rs,2,50 Crores to a
Charitable Trust, which is subject to sanction by the Shareholders at
the ensuring Annual General Meeting.
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report.
The Company has complied with the conditions of Corporate governance as
stipulated in clause 49 of the listing agreement. The certificate
obtained from the auditors of the Company regarding compliance of
conditions is annexed to this report.
PARTICULARS OF EMPLOYEES :
As required by Section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975, a statement of
information relating to the employees has been given in the Annexure,
which forms part of this Report.
PARTICULARS OF ENERGY CONSUMPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required as per Section 217 (1)(e) of the Companies
Act, 1956, read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is given in the annexure, which
forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank, State Bank of Mysore and Indian
Overseas Bank. Your Directors appreciate the continued co- operation
extended by staff and workers of the company and look forward to the
same cordial relationship in the coming years.
For and on behalf of the Board of Directors
MANIKAM RAMASWAMI
Chairman & Managing Director
Place : CHENNAI
Date : 27th May, 2011.
Mar 31, 2010
The Directors have great pleasure in presenting their 64 th Report on
the business and operations of the Company together with the audited
statement of accounts for the year ended 31st March 2010.
WORKING RESULTS
Financial results for the year under review are as follows :
(Rs. in Crore)
For Year ended
31st March 2010
GROSS PROFIT 68.98
Less :Interest 21.13
OPERATING PROFIT 47.85
Less :Depreciation 44.86
PROFIT BEFORE TAX 2.99
Less:Provision for Current Tax 0.99
PROFIT AFTER CURRENT TAX 2.00
Less : Provision for Deferred Tax 0.03
PROFIT AFTER DEFERRED TAX 1.97
Add : Surplus brought forward from previous year --
PROFIT FOR THE YEAR 1.97
After transferring Rs. 0.20 Crore to General Reserve,
your Directors recommend the balance of Rs. 1.77
Crore be appropriated as under :
PROPOSED DIVIDEND ON EQUITY SHARES (30%) 1.41
PROVISION FOR TAX ON DISTRIBUTED PROFITS 0.24
BALANCE CARRIED TO NEXT YEAR 0.12
DIVIDEND
Your Directors recommend a Dividend of Rs. 3.00 (30%) per equity share
of Rs. 10/- each for the financial year ended 31 March 2010.
PERFORMANCE REVIEW, MANAGEMENT DISCUSSION, ANALYSIS REPORT AND OUTLOOK
FOR THE CURRENT YEAR :
GENERAL ECONOMY AND ITS IMPACT ON TEXTILES :
The Indian economy grew by 7.40% in spite of global issues and not so
favorable a monsoon.
Exports from the country registered a --3.98% growth, lower growth than
the previous year.
Textile exports registered a growth rate of 6.18%
Although the GDP growth rate came down, various factors have made the
income at the bottom of the pyramid go up steeply. NREGA,Farm loan
write off, higher support prices for agricultural produce have directly
improved the income accruing at the bottom of the pyramid. More than
this, the indirect benefit of NREGA of raising the minimum wages paid
across all low paying sectors mainly farming and textiles has been
significant. It is estimated that NREGAs direct and indirect impact
would be in excess of Rs. 200,000 crores getting added to the income of
the bottom of the pyramid.
This huge additional income will most certainly positively impact
textile consumption. One meter increase in per capita consumption will
need 10 lac bales of cotton and 18 lac spindles. It is clear that for
the next few years the domestic consumption growth in textiles will be
robust and textile industry will enjoy a good domestic market. Since
the Textile industry is predominantly export oriented, improvements in
domestic consumption alone will not be sufficient to keep demand
exceeding supply.
Textile exports and government policies : Textile industry in India is
very highly export dependent, almost 50% of the factory gate turnover
of textiles comes from exports. Textile exports from India suffered
heavily during this period due to government policies.
1. Unrestricted flow of foreign currency into India including large in
flows through ECBs even after RBI put it on a restricted list together
with speculative news of rupee appreciating to very high levels, made
rupee appreciate for the wrong reasons. This affected Indian exports as
a whole.
2. Government from krishi youjana gave incentives to cotton traders
with retrospective effect and government controlled CCI (Cotton
corporation of India) gave these large exporters 10% discount in
various forms thus making our Indian cotton at least 10% cheaper to our
competitors in China, Pakistan and Bangladesh.
3. During the period of global slow down all other textile exporting
nations gave upto 100% additional incentives to the labour intense
textile industry, our government on the other hand reduced incentives.
4. TUFs loan interest subsidy to an extent of 2000 crores was not
disbursed.
However ever since the new Minister took over textiles he has in quick
time rectified all those issues in his control and the Rupee which
appreciated for the wrong and unsustainable reasons retraced its path.
Today the textile industry is back on tracks and the exports are set to
grow. The policies on exports are thus favorable for value added
exports for the first time and auger well for Indian.
Textles Power Scenario : The power situation in Tamil Nadu where our
factories are located continues to be critical. More than the actual
shortage, the inequal distribution of the shortage and poor grid
maintenance, frequent power tripping is causing huge losses to our
company. It is estimated that our company would have suffered an
additional loss of Rs 20 crores due to the inequal distribution of
shortage and poor grid quality in addition to the normal losses due to
genuine power shortage.
Interest rate : The market remained sluggish as the government during
most part of the financial year was following wrong policies and
encouraging exports from our competitors we were forced to give longer
credit, carry much larger finished goods inventory etc, and our
borrowings on working capital went up steeply. Fixed investment made
was not utilized fully due to non- availability of power. With creeping
increase in interest rate, interest costs went up both in absolute
terms and in % terms. However, since November of 2009 there is a
marked improvement in the all round performance; interest rates are
coming down, working capital is also being reduced, uttilisation is
improving. It is expected that very soon interest rate as a % of our
turnover will come down.
Current working and future prospects : The year under review has been
better than the previous year and we have been able to return to
profits, the year ahead certainly looks better and we can expect to do
much better both in terms of turnover and profits. The policies are
favoring value addition which our company is focused on. The levels of
in equality in power distribution will certainly come down and board
has promised to improve the quality of power. Both domestic market; due
to the bottom of the pyramid getting more money and the export markets
due to the stoppage of subsidized exports of cotton to our competitors
are showing good improvements.
Expansion of capacity: Our new investment in Andhra Pradesh is
progressing well and the new state of art spinning with a capacity of
22500 spindles and 100 Air Jet looms will get completed and
commissioned by the end of this year.
Industrial relations : The comapany has cordial industrial relations at
all its plants, the total employee strength stands at 3100.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
All amounts which are due to be transferred to the Investor Education
and Protection Fund are regularly monitored and transferred. During the
year, the Company has transferred a sum of Rs. 3.11 Lakhs, being the
amount due and payable and remaining unpaid for a period of 7 years, as
provided under Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (awareness and protection of
investors) Rules, 2001. Members who have not encashed the Dividend
warrants for the financial year ended 2002-2003 and / or any subsequent
years are requested to write to the Company with necessary details
before 12.10.2010.
EXPORTS
During the Year under review, the company exported goods to the tune of
Rs. 314.08 crore.
MODERNISATION :
A sum of Rs. 5.94 crore (Previous year Rs. 14.63 crore) was spent on
modernization / replacement of plant and machinery during the year
under review.
FINANCE :
During the year the Company availed term loans to the tune of Rs. 8.32
crore and repaid loans to the extent of Rs. 9.64 crore to Banks/
Financial institutions.
FIXED DEPOSITS :
4 deposits aggregating to Rs. 2.04 lakhs remained unclaimed as on 31st
March 2010. No deposit has since been renewed / repaid.
DIRECTORS :
In accordance with the provisions of the Companies Act, 1956, Mr. S.
Venkataramani, Director and Mr. Shridhar Subrahmanyam retires by
rotation and are eligible for reappointment.
DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956.
The Directors hereby state :-
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures.
b) that the directors have selected such accounting policies and
applied them consistently and made judgements 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 year;
c) 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;
d) that the directors have got prepared the annual accounts on a going
concern basis.COMPANY SECRETARY : During the year under report, Mr.
Shiva Prasad Padhy was appointed as Company Secretary with effect from
17th September, 2009.
LISTING :
The Companys equity shares continue to be listed on the Bombay Stock
Exchange, Mumbai. The listing fees for the year 2010-2011 has been
paid.
AUDITORS :
M/s. Suri & Co., Chartered Accountants, Auditors of the Company retire
at this Annual General Meeting and are eligible for reappointment. The
Company has received a letter from M/s. Suri & Co to the effect that
their appointment as auditors, if made, would be within the limits of
Section 224(1-B) of the Companies Act, 1956.
The Auditors Report to the shareholders does not contain any
qualifications.
REPORT ON CORPORATE GOVERNANCE
A detailed report on Corporate Governance is annexed to this report.
The Company has complied with the conditions of Corporate governance as
stipulated in clause 49 of the listing agreement. The certificate
obtained from the auditors of the Company regarding compliance of
conditions is annexed to this report.
PARTICULARS OF EMPLOYEES :
As required by Section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975, a statement of
information relating to the employees has been given in the Annexure,
which forms part of this Report.
PARTICULARS OF ENERGY CONSUMPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required as per Section 217 (1)(e) of the Companies
Act, 1956, read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is given in the annexure, which
forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to acknowledge the co-operation and assistance
extended by Exim Bank, Central Bank of India, State Bank of India,
Karur Vysya Bank Ltd., Indian Bank and State Bank of Mysore. Your
Directors appreciate the continued co-operation extended by staff and
workers of the company and look forward to the same cordial
relationship in the coming years.
For and on behalf of the Board of Directors
Place: CHENNAI MANIKAM RAMASWAMI
Date : 24 th May, 2010. Chairman & Managing Director