Directors Report of Shiva Texyarn Ltd.

Mar 31, 2018

DIRECTORS'' REPORT

Dear Members,

Your Directors have pleasure in presenting the Thirty Seventh Annual Report together with Audited Financial Statements of the Company for the year ended 31st March, 2018.

	(Rs. in lakhs)
FINANCIAL RESULTS	Financial Year
	2017-18	2016-17
Profit before Interest and Depreciation	4736.03	4965.65
Less: Interest	1927.62	2060.80
Profit before Depreciation	2808.41	2904.85
Less: Depreciation	1343.64	1282.57
Profit before Tax	1464.77	1622.28
Less : Provision for Income Tax
- Current Tax	345.00	379.72
- Deferred tax Liability (Net)	(12.53)	214.09
Profit after Tax	1132.30	1028.47
Add : Other comprehensive income/(Loss)	9.97	18.30
Total comprehensive income/(Loss) for the year	1142.27	1046.77

DIVIDEND

Your Directors are glad to recommend payment of Dividend @ Rs.1.60/- per equity share of Rs.10/- each (@ 16% of the paid up capital) (Last year Rs.1.60/- per share of Rs.10/- each). The dividend on equity shares together with distribution taxon corporate dividend will absorb Rs. 250.02 lakhs (Rs.249.61 lakhs).

IMPLEMENTATION OF Ind AS

Financial year 2017-18 is the first year of implementation of the Indian Accounting Standards (Ind AS) for your company. The impact of the same are detailed in the notes forming part of the Financial Statements.

RECOMMENCEMENT OF TRADING OF SHARES AFTER CAPITAL REDUCTION

The recommencement of trading of Shares of the Company at BSE Ltd and NSE resumed w.e.f. December 26, 2017 in "T" Group after the implementation of Capital reduction process which is forming part and parcel of approved Scheme of Arrangement (Demerger) entered between Shiva Texyarn Ltd and Shiva Mills Ltd (formerly STYL Textile Ventures Ltd).

Your Company''s Scrip Code/Trading Symbol at NSE has been changed from SHIVTEX to SHIVATEX during the aforesaid process.

DISPOSAL OF FRACTIONAL SHARES

419 fractional shares had arisen during the process of implementation of Scheme of Arrangement (Demerger) entered between Shiva Texyarn Ltd and Shiva Mills Ltd (formerly STYL Textile Ventures Ltd) and the same were disposed subsequent to the listing formalities and the proceeds were distributed to the concerned shareholders with an individual intimation. The list of shareholders who have not claimed the said shares are available in the Company''s website: www.shivatex.co.in.

REVIEW OF OPERATIONS

During the year under review, the spinning unit produced 10763.93 tonnes (12341.51 tonnes) of yarn, of which 591.10 tonnes (2772.85 tonnes) was used to produce knitted fabrics. The spinning unit sold 10180.08 tonnes (9722.74 tonnes) of yarn and out of which exports accounted for 1964.61 tonnes (2399.30 tonnes) and knitted fabrics 612.91 tonnes (2692.03 tonnes). Further, during the year under review, the Company sold 3226.80 tonnes (3730.17 tonnes) of waste cotton of which exports accounted for 711.56 tonnes (770.20 tonnes).

The Wind Mills, with aggregate installed capacity of 18.145 MW generated 230.87 lakh units of Wind Electricity as against 277.68 lakh units in the last year. The entire power generated by Wind Mills was utilized for captive consumption at the textile mills.

The performance of the Spinning Unit in terms of profitability was affected by steep fall in prices of yarn due to supply/demand mismatch. However wind power generation helped the Company''s profitability. The Company''s Technical Textile divisions viz. Coating, Lamination and Processing and Garments have picked up their operations and have contributed to the overall performance of the Company in a significant way. The Company which started supplying Home Textiles to M/s Ikea Distribution services during last year has improved its performance during the year. Moreover, the Company which obtained an order from the Ministry of Defence for supply of Nuclear Biological Chemical (NBC) suits shipped the consignment during the year. The overall sales turnover of the Company from all divisions aggregated to Rs.35551.51 Lakhs (Rs.37529.97 Lakhs) of which exports including merchant exports amounted to Rs.7301.75 Lakhs (Rs.7697.47 Lakhs), the exports contributing 20.53% (20.51%) of the overall sales of the Company.

PROSPECTS FOR THE CURRENT YEAR

With domestic demand likely to pick up due to improvement in economic conditions and export demand likely to pick up upon resumption of import of yarn and fabric by China, the prospects for the spinning units appear to be stable. The contribution from Windmills on overall performance of the textile mills is dependent on availability of wind of adequate velocity and during the current year TANGEDCO has committed to evacuate the wind power with minimum back out.

The contribution from Technical Textile products is likely to improve significantly in the coming years. The Processing, Bag and Garments divisions are also expected to contribute to the overall earnings and profits of the Company in the ensuing years.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company subsequent to the end of the Financial Year.

TRANSFER TO RESERVES

During the year under review, the Company has not transferred any amount to General Reserves. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of principal business of the Company during the financial year ended 31st March 2018.

SHARE CAPITAL

Post to the Scheme of Arrangement (Demerger and Capital Reduction) the issued, subscribed and paid-up share capital of the Company as on 31st March 2018 stood at Rs.12,96,27,130/- divided in to 1,29,62,713 equity shares of Rs.10/-each. During the year under review, the Company has not made any fresh issue of shares.

TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has transferred Rs. 24,38,220/- to the Investor Education and Protection Fund during the year under review. The Company has also transferred 1,03,436 equity shares of Rs. 10/- each to IEPF.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31st March, 2018 pursuant to the sub-section (3) of Section 92 of the Companies Act,2013 i.e. Form MGT-9 is available at the weblinlk www.shivatex.co.in.

BOARD MEETINGS

During the year under review, Seven (7) Board Meetings of the Company were conducted. The details of the same have been given in the Corporate Governance Report under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forming part of this Report.

SECRETARIAL STANDARDS

During the year under review, your Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India from time to time.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 134 (5) of the Companies Act, 2013 your Directors confirm that:

a) Your Directors have followed in the preparation of the annual accounts, the applicable accounting standards with proper explanation relating to material departures;

b) Your 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 and loss of the Company for that period;

c) Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) Your Directors have prepared the annual accounts on a going concern basis;

e) Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) Your Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

During the period under review, Dr S V Kandasami & Smt Sujana Abirami were inducted in to the Board w.e.f. 31.08.2017. Smt A Lalitha resigned from the Board with effect from 31.08.2017, Sri S V Alagappan was re-designated as Non-Exectuive Chairman and Sri S K Sundararaman was re-designated as Managing Director w.e.f. 31.08.2017.

Sri S V Arumugam, Director (DIN 00002458) is required to retire by rotation at the ensuing Annual General Meeting, he is eligible and seeks re-appointment.

As per SEBI (Listing Obligations and Disclosure Requirements), (Amendments) Regulations, 2018 Sri S V Alagappan, Dr S V Kandasami, Sri K N V Ramani and Sri S Palaniswami the Non-Executive Directors who has attained or will be attaining the age of seventy five years requires the approval of shareholders by way of special resolution for continuation of their office as Directors. Suitable resolutions along with explanatory statement and justification for their continuation as Directors have been set out in the Notice to the members.

DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013.

EVALUATION OF BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors at their meeting without participation of non-independent Directors and management, considered and evaluated the Boards'' performance, performance of the Chairman and Managing Director.

The Board has carried out an annual evaluation of its own performance and performance of the individual Directors as well as the Committees of Directors.

KEY MANAGERIAL PERSONNEL

The Company has appointed the following persons as Key Managerial Personnel during the year.

Sri S K Sundararaman	Managing Director
Sri R Srinivasan	Company Secretary
Sri C Krishnakumar	Chief Financial Officer

AUDIT COMMITTEE

The Audit Committee comprises of

1.	Sri K N V Ramani	Chairman (Non- Executive Independent Director)
2.	Sri C S K Prabhu	Member (Non- Executive Independent Director)
3.	Sri S K Sundararaman	Member (Managing Director) and
4.	Sri S Palaniswami	Member (Non- Executive Independent Director)

The Board has implemented the suggestions made by the Audit Committee from time to time.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees governed under the provisions of Section 186 of the Comp Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism for Directors and employees to report concerns about une behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics. The policy has posted in the website of the Company viz.,www.shivatex.co.in.

POLICY ON NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors have framed a policy setting out the framework for payment of Remuneration to Directors Managerial Personnel and Senior Management Personnel of the Company. The policy is explained as part c Corporate Governance Report. The Committee ensures that:

1. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directi the quality required to run the Company successfully;

2. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

3. Remuneration to Directors, Key Managerial Personnel and senior management involves a balance between and incentive pay reflecting short and long term performance objectives appropriate to the working c Company and its goals.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year in the ordinary course of business were on arm''s length basis. Hence provisions of Section 188 of the Companies Act, 2013 are not attracted. Further no materially significant related party transactions were made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Hence reporting under Form AOC-2 is not required. Approval of Audit Committee was obtained for transactions of repetitive nature on annual basis. All related party transactions are placed before the Audit Committee and Board of Directors for their review. The policy on Related Party Transactions is available in the website www.shivatex.co.in.

SUBSIDIARY COMPANY

The Company which had one subsidiary viz., Shiva Mills Ltd (formerly STYL Textile Ventures Limited) ceased to be a subsidiary w.e.f. 23.11.2017 due to the implementation of Scheme of Arrangement (Demerger) entered between Shiva Texyarn Ltd and Shiva Mills Ltd. Therefore, the provisions of Section 129(3) of the Companies Act, 2013 are not applicable to your Company.

PUBLIC DEPOSITS

The Company has not accepted any public deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

CORPORATE GOVERNANCE

In line with requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company is committed to the principles of good Corporate Governance and continues to adhere good corporate governance practices consistently.

A separate section is given on Corporate Governance, Management Discussion and Analysis along with a certificate from the Practicing Company Secretary regarding compliance with conditions of Corporate Governance, as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which forms part of this Annual Report.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status and the Company''s operation in future.

AUDITORS

As per Section 139 of the Companies Act, 2013 M/s Deloittee Haskin & Sells LLP - Chartered Accountants were appointed as Auditors for a term of 5 years in the 36th Annual General Meeting held on 25th December, 2017 and will hold office up to 41st Annual General Meeting without further ratification every year as per the provisions of Companies (Amendment) Act, 2017. A suitable resolution is set-out in the notice to the members to give effect to the said amendment.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company appointed Mr R Dhanasekaran, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The report is attached herewith as Annexure-I.

No adverse qualifications/comments have been made in the said report by the Practicing Company Secretary. COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to time, the Board of Directors, on the recommendation of Audit Committee, have appointed Sri M Nagarajan, Cost Accountant, Coimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year 2018 - 2019 with remuneration. As required under the Companies Act, 2013, a resolution seeking members'' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening Annual General Meeting.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has an Internal Audit System which monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee and to the Chairman &Managing Director.

Based on the report of internal audit function, corrective actions are taken in the respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

STATEMENT ON RISK MANAGEMENT POLICY

Pursuant to Section 134{3){n) of the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Risk Management Committee. The Committee has developed a Risk Management Policy and implemented the same. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report. At present the Company has not identified any element of risk which may threat the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted Corporate Social Responsibility Committee (CSR), which shall recommend to the Board, the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, recommend the amount of expenditure to be incurred on such activities and monitor the CSR policy of the Company. The company has partially spent the amount stipulated under the requirements of the Act.

Corporate Social Responsibility Committee constituted by the Board with effect from 21.5.2014, comprised of the following Directors.

1. Sri S V Alagappan	Chairman
2. Sri S K Sundararaman	Managing Director
3. Dr K R Thillainathan	Independent Director

The CSR activities and its related particulars is enclosed as Annexure II STATUTORY DISCLOSURES

I. Conservation of Energy and others

The particulars required to be included in terms of Section 134{3){m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2018 relating to Conservation of Energy, etc., is enclosed as Annexure III.

II. Remuneration of Directors and other details

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors'' Report for the year ended 31st March, 2018 is provided as Annexure IV to this report.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review the human relations continued to be very cordial. The Board of Directors wishes to acknowledge the contribution of the employees at all levels of the organization.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints for sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints for disposal during the year.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the timely assistance and help extended by the Bankers for having provided the required bank facilities. Your Directors wish to place on record their appreciation of the contributions made by the employees at all levels for the continued good performance of your Company.

	By Order of the Board
	S V ALAGAPPAN
Coimbatore	CHAIRMAN
28th May, 2018	(DIN 00002450)

ANNEXURE I

FORM NO. MR - 3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2018

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014]

To

The Members

Shiva Texyarn Limited

CIN : L65921TZ1980PLC000945

252 Mettupalayam Road, Coimbatore 641 043

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SHIVA TEXYARN LIMITED (hereinafter called the "Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by SHIVA TEXYARN LIMITED ("the Company") for the financial year ended on 31st March 2018) (''Audit Period'') according to the provisions of:

i. The Companies Act, 2013 (the Act) and the Rules made thereunder and applicable provisions of the Companies Act 1956;

ii. The Securities Contracts (Regulation) Act, 1956 (''SCRA'') and the Rules made thereunder; iii. The Depositories Act, 1 996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (''SEBI Act'') to the extent applicable to the Company;

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

b. Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period);

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the company during the Audit Period)

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the company during the Audit Period)

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not applicable to the company during the Audit Period)

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period); and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the Audit Period);

vi. The following other laws specifically applicable to the company:

a. Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (applicable upto 30.06.2017)

b. Textile Committee Act, 1963

c. Textiles (Development and Regulation) order, 2001

d. Textiles (Consumer Protection) Regulation, 1985

I have also examined compliance with the applicable clauses of the following :

i) Secretarial Standards issued by The Institute of Company Secretaries of India.

ii) The Listing Agreements entered into by the Company with the BSE Limited, National Stock Exchange of India Limited and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

I report that, during the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, Listing Agreements etc., mentioned above.

I further report that, based on the information provided by the Company, its officers and authorised representatives during the conduct of the audit and also on the review of periodical compliance reports by respective department heads/company secretary/CFO taken on record by the Board of Directors of the Company, in my opinion, adequate systems and process and control mechanism exist in the Company to monitor and ensure compliance with applicable financial/general laws like, direct and indirect tax laws, labour laws, and environmental laws.

I further report that, the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

I further report that, there are adequate systems and processes in the company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that, during the audit period :

The company has not taken any events/actions having a major bearing on the company''s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

I further report that, the Hon''ble National Company Law Tribunal, Division Bench, Chennai, vide its order No. TCP/22 & 23/CAA/2017 (C.P.359 & 360 of 2016) dated 24th August, 2017, has approved the Scheme of Arrangement (demerger) between the company and Shiva Mills Limited.

	R DHANASEKARAN
Coimbatore	Company Secretary in Parctice
28th May, 2018	FCS 7070 / CP 7745

ANNEXURE II

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. A Brief outline of the Company''s CSR policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

CSR Policy - Approved by the Board of Directors and applicable from 14.8.2014 Present Activities:

* Shiva Texyarn adopts Government Schools located at around factory and support construction of class rooms, water tanks, laboratory and other basic amenities to students. Provide teachers to the schools adopts by the Company.

* To provide Education facility to economically backward people.

* To provide Computer Training and organize Skill development Program to Students and Teachers.

* Weblink: www.shivatex.co.in

2. Composition of CSR Committee

Name of the member	Designation
Sri S V Alagappan	- Chairman
Sri S K Sundararaman	- Managing Director
Dr K R Thillainathan	- Independent Director

3.	Average net profit of the Company for last 3 financial years	Rs. 10,09,01,567/-
4.	Prescribed CSR expenditure (2% of the amount as in item 3 above)	Rs. 20,18,031/-
5.	Details of CSR spend during the financial year
	a) Total amount spent for the financial year	Rs. 13,64,650/-
	b) Amount unspent, if any	Rs. 6,53,381/-

c)	Manner in which the amount spent during the financial year is detailed below :						(in Rs)
SI No	Projects/ Activities	Sector	Project / program locations	Amount outlay (budget) project/ programwise	Amount spent on the project/ program	Cumulative expenditure upto the reporting period	Amount spent: Direct or through implementing agency
	Sponsoring 100 free cataract eye surgery Sankara Eye Hospital	Healthcare and Medical facilities	Coimbatore	150000	150000	150000	Sri Kanchi Kamakoti Medical Trust
	Special walkathon Expenditure	Preventive Healthcare	Coimbatore	67650	67650	67650	Direct
3	Welfare of retiring soldiers	Measures for the benefit of the armed forces	New Delhi	397000	397000	397000	Tresath League
4	School Construction at Bommanampalayam	Promoting Education	Coimbatore -Rural	300000	300000	300000	Coimbatore United Round Table 186 Trust
5	Pannaimadai School Children Malnutrition Eradication Programme	Eradicating Malnutrition	Coimbatore -Rural	50000	50000	50000	Direct
6	Freedom Through Education School Construction	Promoting Education	Madukkarai Panchayat, Coimbatore	300000	300000	300000	Coimbatore ACME Round Table 133
7	SEEK (Save Endangered Endemic and Key Species)	Ensuring Environmental Sustainability	Coimbatore	100000	100000	100000	Environment Conservation Group

Reason for not spending

The Company could not identify the projects in consonance with its CSR policy. Responsibility Statement of the CSR Committee

The CSR Committee hereby confirms that the implementation and monitoring of CSR activities are in compliance with CSR objectives and policy of the Company.

	By Order of the Board
	S V ALAGAPPAN
Coimbatore	CHAIRMAN
28th May, 2018	(DIN 00002450)

ANNEXURE - III

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTGO

The information under Section 134{3){m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 for the/ear ended 31st March, 2018 is given here below and forms part of the Directors'' Report.

A) CONSERVATION OF ENERGY

i) Steps taken or impact on conservation of energy;

* Energy Audit and conservation measure is being adopted periodically.

* Link Coner machine suction motor pressure optimization through closed loop method.

* Blow room VXL CF fan suction level optimization through pipe line alteration.

* Provision of LED light in place of conventional tube lights.

* Blow room VXL centrifugal motor pulley reduction for4 lines.

* Air leakage arresting in pipe lines and machines in all departments.

* Autoconer 338 suction fan retrofit funnel ring.

* Fan motor 2.5 HP removed in Simplex machines-Front roving stop motion provided.

* Provision of electronic ballast instead of copper ballast in light fittings.

* Automatic on/off control provided to stop Compressor unloading time.

* Humidification plant angle reduced to conserve energy.

* Efforts are being taken to reduce energy consumption in all energy intensive equipment

ii) Steps taken by the company for utilizing alternate sources of energy;

* The company is utilizing solar energy for water heating.

* The entire wind energy produced by the Company''s wind mills are captively consumed. iii) Capital investment on energy conservation equipment;

* Investments for reduction of consumption of energy are being made after careful evaluation of each proposal.

B) TECHNOLOGY ABSORPTION

i) the efforts made towards technology absorption;

a) Provision of individual Production and Power online monitoring system in Ring Frame 1 to 10 machines.

b) Energy recovery system installed in air compressor.

ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

With the measures adopted by the company, there is substantial saving in energy consumption thereby reduction in cost of production.

iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) : Not applicable.

iv) the Company has incurred an expenditure of Rs. 3.20 lakhs towards Research and Development.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review foreign exchange earnings were Rs. 7528.66 lakhs (previous year Rs. 8266.28 lakhs). Foreign exchange outgo was Rs. 1593.87 lakhs (previous year Rs. 2603.00 lakhs)

	By Order of the Board
	S V ALAGAPPAN
Coimbatore	CHAIRMAN
28th May, 2018	(DIN 00002450)

ANNEXURE IV

Disclosure in the Board''s Report

Particulars of Remuneration of Directors and Employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

i) The Ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial year 2017-18.

Director''s Name	Ratio
Sri S K Sundararaman, Managing Director	39.10:1

ii) The Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager if any in the Financial year 2017-18 compared to 2016-17 means part of the year.

Director''s Name/CS/CFO	% increase in remuneration
Sri S K Sundararaman, Managing Director	(47.88)
Sri R Srinivasan, Company Secretary	28.71
Sri C Krishnakumar (CFO)	15.60

In respect of other Directors, the Company is paying only sitting fees. Hence, not considered for the above purpose.

iii)	Percentage increase in the median remuneration of employees in the Financial Year 2017-18	21%
iv)	Number of permanent employees on the rolls of the Company	1340
v)	Explanation on the relationship between average increase in remuneration and the Company performance	The relationship between average increase in remuneration and the Company''s performance are determined in the normal course of business and in line with the Standards & norms of the Industry.

vi) Particulars of Employees as per Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

SI. No.	Name (Age in years)	Designation	Gross Remuneration Paid (in Rs.)	Qualification	Date of commencement of employment (experience in years)	Previous Employment
1	Naveen Sodhi - (64)	Senior Vice President	2925000	M Sc, M Phil	16.05.2013, 5 Yrs	Indian Army
2	Daisy Mistri (68)	COO	2851935	DCP	14.04.2017, 1 Yr	Gokaldas Exports Ltd
3	M Senthil Kumar - (40)	Vice President	2770000	BE	01.11.2015, 3 Yrs	Alps Industries Ltd
4	Raghu Ram Varma (44)	National Sales Manager	2302032	MBA	03.08.2015, 3 Yrs	Piramal Enterprises Ltd
5	P Baskar - (53)	G M Operation	1435457	DTT	01.01.1989, 29 Yrs	Bannariamman Group
6	C Krishnakumar - (40)	CFO	1181024	M Com, FCA, ACS	01.06.2012, 6 Yrs	Sabare International Ltd
7	T Manoharan, (51 )	AGM (operation)	1171120	B Tech	20.10.2008, 10 Yrs	Vijayashree Textiles
8	K Venurajagopal (53)	GMHr	1152200	MA, BL	28.08.1991, 27 Yrs	Not Applicable
9	S. Sengottaiyan (66)	DGM Accounts	1109060	BA	28.08.1985, 33 Yrs	Tarapure & Co., Madras
10	R Srinivasan (44)	Company Secretary	942049	ACS, BL	18.05.2017, lYr	Shriram Capital Ltd

vii) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the Performance of the Company

KMP''s remuneration 2017-18 (Rs. in lakhs)	% increase / (Decrease) in KM Ps remuneration (2017-18 against 2016-17)	Sales 2017-18 (Rs. in lakhs)	% increase in sales (2017-18 against 2016-17)
89.36	(39.73)	35551	(5.27)

viii) Variation in Market Capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of list companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year:

Particulars	As on 31.3.2018	As on 31.3.2017	Variations	%
Market Capitalization (Rs. crores)	644.18	784.46	(140.28)	(17.88)
Price Earninqs Ratio	56.85	44.72	12.13	27.12

Market quotation of the shares as on 31.3.2018(NSE)	Rs. 469.95/- per share of face value Rs 10/- per share
Market quotations of the shares when the Company came out with the last public offer	Rights issue in 1995 at a price of Rs. 32/- per share of Face Value of Rs. 10/- each
Percentage increase/decrease in the	31.03.2017 { ) 255.63%
market quotations of the Company	31.03.2018 {-) 17.88%

ix) Average percentile increase already made in the salaries of Employees other than Managerial Personnel in the last financial year and its comparison with the percentile increase in managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

The average percentile increase granted to employees other than managerial personnel is 21% The percentile increase granted to managerial personnel is Nil x) Comparison of each remuneration of the Key Managerial Personal against performance of the Company

			(Rs. in Lakhs)
Particulars	MD	CS	CFO
Remuneration	68.13	9.42	11.81
Revenue	35551	35551	35551
Remuneration (as % of revenue)	0.19	0.03	0.03
Prof it after tax (PAT)	1132.30	1132.30	1132.30
Remuneration (as a % of PAT)	6.02	0.83	1.04

xi)	Key parameter for any variable component of remuneration availed by the Directors	The Directors are not eligible for any variable compensation other than Commission payable to Managing Director
xii)	Ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess the highest paid director during the year	Since the remuneration of the highest paid employee is not in excess of the highest paid Director it is not applicable

xiii) The Board of Directors of the Company affirm that the remuneration paid to Directors, Key Managerial Personnel and employees is as per the remuneration policy approved by the Board of Directors of the Company.

The Statement of employees receiving remuneration not less than five lakh rupee per month.

Name :	: S K Sundararaman
Age :	: 45
Designation :	: Managing Director
Nature of Duties :	: Manage the day to day affairs of the Company subject to the superintendence and control of Board of Directors
Remuneration {Rs. in lakhs) :	: 68.13
Qualification & Experience (years) :	: MBA and more than 18 years of experience in Textiles/Business
Date of commencement of employment :	: 15.5.2006
Last employment :	: Bannari Amman Spinning Mills Limited

None of the employees listed in the said Annexure is relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

During the Financial Year 2018, the Company has 1340 employees.

	By Order of the Board
	S V ALAGAPPAN
Coimbatore	CHAIRMAN
28th May, 2018	(DIN 00002450)

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Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Thirty fourth Annual Report together with Audited Financial Statements of the Company for the year ended 31st March, 2015

FINANCIAL RESULTS

Financial Year (Rs. in lakhs)

2014-2015 2013-2014

Profit before Interest and Depreciation 5506.15 7352.70

Less: Interest 2546.92 2348.54

Profit before Depreciation 2959.23 5004.16

Less: Depreciation 1687.01 2008.74

Profit before Tax 1272.22 2995.42

Less : Provision for Income Tax

* Current Tax 165.54 5.76

* Deferred tax Liability (Net) 217.32 903.39

Profit after Tax 889.36 2086.27

Add : Surplus brought forward from last year 444.24 161.29

Amount available for appropriation 1333.60 2247.56

Appropriations :

Provision for Equity Dividend 216.05 259.25

Provision for Tax on Dividend 45.21 44.06

Transfer to General Reserve 750.00 1500.00

Surplus carried over to Balance Sheet 322.34 444.25

Total 1333.60 2247.56

Dividend

Your Directors are glad to recommend payment of Dividend @ Re.1.00 /- per equity share of Rs. 10/- each (at 10% of the paidup capital). (Last year Rs. 1.20 per share of Rs. 10/- each). The Dividend on Equity Shares together with Distribution Tax on Corporate Dividend will absorb Rs. 261.26 lakhs (' 303.31 lakhs). The Dividend will be free from Income Tax in the hands of Shareholders.

REVIEW OF OPERATIONS

During the year under review, the textile spinning units together in aggregate produced 18756.53 tonnes (18858.80 tonnes) of yarn, of which 2382.88 tonnes (834.40 tonnes) was used to produce knitted fabrics. The textile spinning units, in aggregate sold 16123.67 tonnes (17853.59 tonnes) of yarn and 2369.50 tonnes (846.04 tonnes) as knitted fabrics. Further, during the year under review, the Company sold 5362.98 tonnes (5532.43 tonnes) of waste cotton, of which exports accounted for 1005.15 tonnes (973.40 tonnes).

The Wind Mills, with aggregate installed capacity of 28.795 MW generated 364.21 lakh units of Wind Electricity as against 417.99 lakh units in the last year. The entire power generation by Wind Mills was utilized for captive consumption at the textile mills. As in the previous year, generation from windmills was severely affected due to nonevacuation of Wind power by TANGEDCO during the current year also, resulting in loss of generation of about 56.56 lakh units (101.29 lakh units), depressing the revenue and profits by about Rs. 359.15 lakhs (Rs. 557.07 lakhs).

Your Directors report that the financial performance of the Spinning Units during the year were affected by volatility in prices of cotton and finished products. The prices of cotton witnessed a down trend from July' 2014 onwards, while the Yarn prices also reacted downward keeping pace with the current prices of cotton. Consequently the yarn and fabric produced by the spinning units out of high priced cotton was sold at reduced prices thereby impacting the Profitability which was felt in the second and third quarters of the financial year.

While the restriction and control measures of Tamil Nadu Generation and Distribution Company Limited (TANGEDCO) continued, TANGEDCO failed to evacuate the power generated by the windmills. In spite of the difficulties encountered as narrated above, the Company could achieve maximum utilization and productivity without curtailing the production in the Spinning Units.

The Company's initiatives on technical textile products such as coated and laminated fabrics, intended for use in the field of defence, medical and other industrial applications has started yielding results. The operations of the processing unit at SIPCOT, Perundurai established in the financial year 2012-13 is yet to stabilise.

The overall sales turnover of the Company from all divisions aggregated to Rs. 45745.71 Lakhs (Rs. 49244.10 Lakhs) of which exports amounted to Rs. 9248.26 Lakhs (Rs. 13536.27 Lakhs), the exports contributing 20.22% (27.49%) of the overall sales of the Company.

PROSPECTS FOR THE CURRENT YEAR

With domestic demand likely to pick up due to improvement in economic conditions, the prospects for the spinning units appear to be stable. The contribution from Windmills on overall performance of the textile mills is dependent on availability of Wind of adequate velocity and arrangements by TANGEDCO for evacuation of wind power.

The contribution from Technical Textile products is likely to improve significantly in the coming years. The processing division is also likely to improve its contribution for earnings of the company, in the years ahead. As part of diversification, the Company has started a Bag unit for manufacture of branded travel and school bags, which has large growing demand.

EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no material changes and commitments affecting the financial position of the Company, subsequent to the end of the Financial Year.

PUBLIC DEPOSITS

The Company has not accepted any public deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

CORPORATE GOVERNANCE

In line with requirements of Clause 49 of the Listing Agreement your Company is committed to the principles of good Corporate Governance and continues to adhere good corporate governance practices consistently.

A separate section is given on Corporate Governance, Management Discussion and Analysis alongwith a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on Financial Year ended on 31st March, 2015 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 and forming part of the report in Form MGT - 9 is enclosed as Annexure - I.

DIRECTORS

Smt A Lalitha (DIN 00003688), was appointed as Additional Director (Woman Director) u/s 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with effect from 1.9.2014. She holds office upto the date of ensuing Annual General Meeting, being eligible, offers herself for re-appointment as Director.

Sri S V Alagappan, Managing Director (DIN 00002450) is required to retire by rotation at the ensuing Annual General Meeting, he is eligible and seeks re-appointment.

The term of office of Sri S V Alagappan as Managing Director expires on 26.6.2015. The Board of Directors on the recommendation of Nomination and Remuneration Committee, have appointed him for a further period of 5 years and approved the remuneration payable to him. Such appointment and payment of remuneration are subject to approval of shareholders in the ensuing Annual General Meeting.

Board of Directors on the recommendation of Nomination and Remuneration Committee have proposed to increase the remuneration payable to Sri S K Sundararaman, Executive Director, as stated in the Notice of Annual General Meeting with effect from 30.5.2015 for remaining period of his tenure of office up to 12.8.2017, subject to approval of shareholders in the ensuing Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

KEY MANAGERIAL PERSONNEL

The Company has appointed the following persons as Key Managerial Personnel during the year.

Sri S V Alagappan Managing Director

Sri S Seshadri Chief Financial Officer

Smt M Shyamala Company Secretary

AUDIT COMMITTEE

The Audit Committee comprises of

1. Sri K N V Ramani - Chairman(Non- Executive Independent Director)

2. Sri C S K Prabhu - Member(Non- Executive Independent Director)

3. Sri S K Sundararaman - Member(Executive Director) and

4. Sri S Palaniswami - Member(Non- Executive Independent Director)

The Board has implemented the suggestions made by the Audit Committee from time to time.

EVALUATION OF BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without participation of non-independent directors and management considered and evaluated the Boards' performance, performance of the Chairman and Managing Director.

The Board has carried out an annual evaluation of its own performance, of the individual directors as well as the Committees of Directors.

BOARD MEETINGS

During the year under review, four Board Meetings were conducted. The details of the same have been given in the Corporate Governance Report under Clause 49 of the Listing Agreement, forming part of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees governed under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics. The policy has been posted in the website of the Company viz., www.shivatex.co.in.

POLICY ON NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors have framed a policy setting out the framework for payment of Remuneration to Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The policy is explained as part of the Corporate Governance Report. The Committee ensures that :

a. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully

b. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks and

c. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

All the related party transactions that were entered into during the financial year in the ordinary course of business and the prices were at arm's length basis. Hence, the provisions of Section 188 of the Companies Act, 2013 are not attracted. Further no materially significant related party transactions were made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Hence reporting in AOC-2 is not required. Approval of Audit Committee was obtained for transactions of repetitive nature on annual basis. All related party transactions are placed before the Audit Committee and Board of Directors for their review. The policy on Related Party Transactions is available in the website www.shivatex.co.in.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status and the Company's operation in future.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 134 (5) of the Companies Act, 2013 your Directors confirm that:

a) Your Directors have followed in the preparation of the annual accounts, the applicable Accounting Standards with proper explanation relating to material departures;

b) Your 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 and loss of the Company for that period;

c) Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) Your Directors have prepared the annual accounts on a going concern basis;

e) Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) Your Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

The present Auditors of the Company M/s V K S Aiyer & Co., Chartered Accountants, Coimbatore, were appointed for a term of 3 years, pursuant to the resolution passed by the members at the Annual General Meeting held on 25th August, 2014. A resolution ratifying their appointment in terms of Section 139 is also placed before the shareholders for their approval at the ensuing Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company appointed Mr R Dhanasekaran, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The report is annexed herewith as Annexure - II

No adverse qualifications/comments have been made in the said report by the Practicing Company Secretary.

COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to time, the Board of Directors, on the recommendation of Audit Committee, has appointed Sri M Nagarajan, Cost Accountant, Coimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year 2015 - 2016.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Company has an Internal Audit Department which monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee and to the Chairman & Managing Director.

Based on the report of Internal Audit function, corrective actions are taken in the respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

STATEMENT ON RISK MANAGEMENT POLICY

Pursuant to Section 134(3) (n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The Committee has developed a Risk Management Policy and implemented the same. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report.

At present the Company has not identified any element of risk which may therat the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted Corporate Social Responsibility Committee (CSR), which shall recommend to the Board, the activities to be undertaken by the Company as specified in Schedule VII, recommend the amount of expenditure to be incurred on such activities and monitor the CSR policy of the Company. The Company has partially spent the amount stipulated under the requirements of the Act. Corporate Social Responsibility Committee constituted with effect from 21.5.2014, consisting of the following Directors.

1. Sri S V Alagappan - Managing Director

2. Sri S K Sundararaman - Executive Director

3. Dr K R Thillainathan - Independent Director

The CSR activities and its related particulars is enclosed as Annexure III

STATUTORY DISCLOSURES

I. Conservation of Energy and others - The particulars required to be included in terms of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2015 relating to Conservation of Energy, etc., is enclosed as Annexure IV.

II. Remuneration of Directors and other details - The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors' Report for the year ended 31st March, 2015 is provided in Annexure V.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review the human relations continued to be very cordial. The Board of Directors wishes to acknowledge the contribution of the employees at all levels of the organisation.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints for sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints for disposal off during the year.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the timely assistance and help extended by the Bankers for having provided the required bank facilities. Your Directors wish to place on record their appreciation of the contributions made by the employees at all levels for the excellent performance of your company.

By Order of the Board Coimbatore S V ALAGAPPAN 30th May 2015 CHAIRMAN AND MANAGING DIRECTOR

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Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Thirty Third Annual Report together with Audited Financial Statement of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS Financial Year

(Rs. in lakhs)

2013-2014 2012-2013

Profit before Interest and Depreciation 7352.70 7749.77

Less: Interest 2348.54 2677.35

Profit before Depreciation 5004.16 5072.42

Less: Depreciation 2008.74 1916.97

Profit before Tax 2995.42 3155.45 Less : Provision for Tax

- Income tax - Current year 5.76 17.27

- Deferred tax - Current year 903.39 908.97

Profit after Tax 2086.27 2229.21

Add : Surplus/(Deficit) brought forward from last year 161.29 (1614.61)

Amount available for appropriation 2247.56 614.60

Appropriations :

Provision for Equity Dividend 259.25 259.25

Provision for Tax on Dividend 44.06 44.06

Transfer to General Reserve 1500.00 150.00

Surplus carried over to Balance Sheet 444.25 161.29

Total 2247.56 614.60

DIVIDEND

Your Directors are glad to recommend payment of Dividend of Rs.1.20/- per equity share of Rs.10/- each (Last year Rs.1.20/- per share of Rs.10/- each). The Dividend on Equity Shares together with Distribution Tax on Corporate Dividend will absorb Rs.303.31 lakhs (Rs.303.31 lakhs). The Dividend will be free from Income Tax in the hands of Shareholders.

REVIEW OF OPERATIONS

During the year under review, the textile spinning units together in aggregate produced 18858.80 tonnes (17068.66 tonnes) of yarn, of which 834.40 tonnes (3433.07 tonnes) was used to produce knitted fabrics. The textile spinning units, in aggregate sold 17853.59 tonnes (13923.87 tonnes) of yarn and 846.04 tonnes (3456.94 tonnes) as knitted fabrics. Further, during the year under review, the Company exported waste cotton for 973.40 tonnes (1118.37 tonnes).

The Wind Mills, with an installed capacity of 28.795 MW generated 417.99 lakh units of Wind Electricity as against 476.80 lakh units in the last year. The entire power generation by Wind Mills was utilized for captive consumption at the textile mills. During the year, generation from windmills was severely affected due to non evacuation of Wind power by TANGEDCO resulting in loss of generation of about 101.29 Lakh units, depressing the revenue and profits by about 1557.07 Lakhs.

Your Directors report that the performance of the textile spinning units during the year was satisfactory as there was stability in Cotton (raw material) and Yarn prices for most part of the year. The emphasis is to produce more value added Yarn by installing Compact systems/Slub attachments for which investments are being made. The restriction and control measures of Tamil Nadu Electricity Generation and Distribution Company (TANGEDCO) continued in the year under review. However the Company could achieve maximum utilization and productivity, by making alternate arrangements of procuring private power.

The Company also focused more on production of technical textile products such as coated and laminated fabrics, intended for use in the field of defence, medical and other industrial applications, as its core area. In order to move up the value chain, the Company established a processing unit at SIPCOT, Perundurai in the financial year 2012-13, to carry out dyeing/printing operations. The overall sales turnover of the Company from all divisions aggregated to ^49244.10 Lakhs (*41139.32 Lakhs) of which exports amounted to *13536.27 Lakhs (Rs.9318.74 Lakhs), the exports contributing 27.49% ( 22.65%) of the overall sales of the Company.

PROSPECTS FOR THE CURRENT YEAR 2013-14

With moderation in cotton prices and stable demand for yarn in both domestic and export markets with adequate velocity, the prospect for spinning units may continue to be satisfactory. The contribution from Windmills on overall performance of the textile mills is dependent on availability of Wind of adequate velocity and arrangements by TANGEDCO for evacuation of wind power.

The contribution from Technical Textile products will increase significantly in the coming years and it is also expected that the processing unit operations will stabilise in the years to come.

PUBLIC DEPOSITS

As at the close of the year, there were 37 public deposits involving an amount ofRs.8.48 lakhs which remained unclaimed, pending receipt of instructions from the deposit holders. Subsequently no claims were received from deposit holders for repayment. Regular follow up is being made to obtain instructions from the deposit holders for repayment. As a management policy no fresh Public deposits are either accepted or renewals made.

DIRECTORS

Sri V Venkata Reddy ceased to be a Director of the Company by resignation with effect from 30.5.2013. The Board wishes to place on record its appreciation for the valuable services rendered by Sri V.Venkata Reddy during his tenure of office as Director in the growth of the Company.

INDEPENDENT DIRECTORS

In compliance of the provisions of The Companies Act, 2013 and the Listing Agreement entered into with the Stock Exchanges in which the Company''s shares are listed, Independent Directors are required to be appointed for a consecutive term of five years besides the other requirements. Accordingly the Board of Directors have proposed to appoint Sri K N V Ramani and Dr K R Thillainathan, Directors, who are retiring by rotation at the ensuing annual general meeting, as Independent Directors for a Term of 5 consecutive years, i.e upto 24th August 2019. Further Sri C S K Prabhu, Sri S Palaniswami and Sri S Marusamy Directors are proposed for appointment as Independent Directors of the Company for a Term of five consecutive years, i.e. upto 24th August 2019. Your Directors recommend their appointment.

AUDIT COMMITTEE

The Audit Committee Comprises of

1. Sri K N V Ramani - Chairman (Non - Executive Independent Director)

2. Sri S K Sundararaman - Executive Director

3. Sri C S K Prabhu - Member (Non - Executive Independent Director)

4. Sri S Palaniswami - Member (Non - Executive Independent Director)

PARTICULARS OF EMPLOYEES

The information required as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is furnished in Annexure - I and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be included in terms of Section 217(1) (e) of the Companies Act, 1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished in Annexure-II and forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

(i) Your Directors have followed the applicable Accounting Standards in the preparation of Annual Accounts;

(ii) Your 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 2013-14 and of the Profit of the Company for that period;

(iii) Your 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; and

(iv) Your Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, Management Discussion and Analysis and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement form part of this Annual Report.

AUDITORS

M/s V K S Aiyer & Co, the present Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITOR

Sri M Nagarajan, Cost Accountant, Coimbatore has been appointed as Cost Auditor to conduct Cost Audit of the Company for the Financial year 2013 - 2014 with the approval of the Central Government.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGMENT

Your Directors place on record their sincere thanks to the Bankers who have granted financial assistance to the Company by way of Term Loans, Working Capital Loan and Cash Credits and for their continued support. Your Directors also thank the customers and suppliers of the Company for their support and to the employees at all levels for their co- operation and dedication.

Coimbatore By Order of the Board 21st May, 2014 S V ALAGAPPAN CHAIRMAN ABD MANAGING DIRECTOR

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Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the Thirty Second Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2013.

Rs. in lakhs

FINANCIAL RESULTS

Financial Year

(Rs. in lakhs) 2012-2013 2011-2012

Profit before Interest and Depreciation 7749.77 1805.89

Less: Interest 2677.35 2798.74

Profit before Depreciation 5072.42 (992.85)

Less: Depreciation 1916.97 1870.33

Profit before Tax 3155.45 (2863.18)

Less : Provision for Tax

- Current tax 17.27 -

- Deferred tax 908.97 (920.83)

Profit after Tax 2229.21 (1942.35)

Add : Surplus/(Deficit) brought forward from last year (1614.61) 327.74

Amount available for appropriation 614.60 (1614.61)

Appropriations :

Provision for Equity Dividend 259.25 -

Provision for Tax on Dividend 44.06 -

Transfer to General Reserve 150.00 -

Surplus carried over to Balance Sheet 161.29 (1614.61)

Total 614.60 (1614.61)



DIVIDEND

Your Directors are glad to recommend payment of dividend at the rate of 12% (Last year Rs.Nil). The Dividend on Equity Shares together with Distribution Tax on Corporate Dividend will absorb Rs.303.31 lakhs (Last year Rs.Nil). The Dividend will be free from Income Tax in the hands of Shareholders.

REVIEW OF OPERATIONS

During the year under review, the textile mills produced in aggregate 17068.66 tonnes (13280.94 tonnes) of yarn and sold 13923.87 tonnes (10194.43 tonnes) of yarn. The sales include 3830.83 tonnes (4317.22 tonnes) of yarn fetching Rs.7762.94 lakhs (Rs.8530.92 lakhs) by export, including merchant export. During the year, the Company also exported waste cotton to an extent of 1118.37 tonnes (1038.70 tonnes) fetching Rs.857.61 lakhs (Rs.795.55 lakhs).

The knitting division with 41 knitting machines produced 3433.19 tonnes of fabric (1355.56 tonnes) and sold 3456.94 tonnes (967.99 tonnes) which included export of 324.74 tonnes (387.91 tonnes). The sales of knitted fabrics amounted to Rs.7132.63 lakhs (Rs.2775.53 lakhs) which included export sales of Rs.698.19 lakhs( Rs.824.98 lakhs). With lower production and sales, the garment division yielded a turnover of Rs.957.47 lakhs (Rs.1665.44 lakhs)

During the year, the Company also ventured into production and sales of technical textile products, which yielded an aggregate revenue of Rs.1557.68 (Rs.Nil) by sales from coated fabrics and laminated fabrics. The Company also established a processing unit at SIPCOT, Perundurai, to create captive source of dyeing and printing activities.

The overall sales of textile products amounted to Rs.41139.32 lakhs (Rs.32506.34 lakhs).

Your Directors report that the performance of the textile spinning units improved considerably as compared to the previous financial year. The prices of cotton (raw material) remained stable during most part of the year as a result of which there was stability in Yarn prices also. The strategy of penetrating alternative markets viz. Corporate buyers, new overseas buyers, woven segment etc in addition to our core market for hosiery yarn helped the Company in improving the working results.

The Wind Mills, with an installed capacity of 28.795 produced 476.80 lakh units of Wind Electricity as against 419.03 lakh units generated in the last year. The entire power generated by Wind Mills is utilized for captive consumption.

The restriction and control measures of Tamil Nadu Electricity Generation and Distribution Company (TANGEDCO) still continues. However the Company has been able to achieve maximum utilization and productivity by making alternate arrangements of procuring private power although at higher cost resulting in increase in power cost during the year.

Your Directors are glad to report that a Processing unit has been commissioned at SIPCOT Perundurai for carrying out Dyeing/Printing operations which is expected to contribute to the overall performance of the Company in the coming years.

PROSPECTS FOR THE CURRENT YEAR 2013-14

The prospect of spinning units is expected to be satisfactory with moderation in cotton prices and stable demand for yarn in both domestic and export markets. The performance of Windmills is dependent on availability of Wind and infrastructure for evacuation of wind power by TANGEDCO.

PUBLIC DEPOSITS

As at the close of the year, there were 42 public deposits involving an amount of Rs.9.84 lakhs remained unclaimed pending receipt of instructions from the deposit holders. Subsequently no claims were received from deposit holders for repayment. Regular follow up is being made to obtain instructions from the deposit holders for repayment. As a policy no fresh Public deposits are accepted and no renewals are made.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 the following Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment :

(i) Sri C S K Prabhu

(ii) Sri S Palanisamy

The Directors recommend their re-appointment.

PARTICULARS OF EMPLOYEES

None of the employees of the Company is in receipt of remuneration exceeding Rs.5,00,000/- per month or Rs.60,00,000/- per annum. Therefore, the particulars required as per Section 217 (2A) of the Companies Act, 1956 are not furnished.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be included in terms of Section 217(1) (e) of the Companies Act, 1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished in Annexure-I and forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that :

(i) Your Directors have followed the applicable Accounting Standards in the preparation of Annual Accounts;

(ii) Your 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 2012-13 and of the Profit of the Company for that period;

(iii) Your 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; and

(iv) Your Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, Management Discussion and Analysis and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance has been furnished, as stipulated under Clause 49 of the Listing Agreement which form part of this Annual Report.

AUDITORS

M/s V K S Aiyer & Co, the present Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Bankers who have granted financial assistance to the Company by way of Term Loans, Working Capital Loan and Cash Credits and for their continued support. Your Directors also thank the customers of the Company for their support and confidence reposed in the Company and to the employees at all levels for their co-operation and dedication.



By Order of the Board Coimbatore S V ALAGAPPAN

18th May, 2013 CHAIRMAN & MANAGING DIRECTOR

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Mar 31, 2012

The Directors have pleasure in presenting the Thirty first Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2012.

Rs. in lakhs

FINANCIAL RESULTS Financial Year

2011-2012 2010-2011

Profit before Depreciation (992.85) 5567.24

Less: Depreciation 1870.32 1765.98

Profit before Tax (2863.18) 3801.26

Less : Provision for Tax

- Income Tax - Current year 0.00 726.44

Prior year 0.00 85.81

- Wealth Tax - Current year 0.00 0.00

Prior year 0.00 2.22

- Deferred Tax - Current year (920.83) 1046.01

- MAT Credit Entitlement - Current year 0.00 (719.70)

Profit after Tax (1942.35) 2660.48

Add : Surplus brought forward from last year 327.74 43.90

Amount available for appropriation (1614.61) 2704.38

Appropriations :

Provision for Equity Dividend 0.00 324.07

Provision for Tax on Dividend 0.00 52.57

Transfer to General Reserve 0.00 2000.00

Surplus carried over to Balance Sheet 0.00 327.74

TOTAL (1614.61) 2704.38

DIVIDEND

Your Directors regret to inform that no dividend has been proposed for the current year (last year Rs.376.64 lakhs including Distribution Tax on Corporate Dividend) as the Company has incurred loss due to external factors .

REVIEW OF OPERATIONS

During the year under review, the textile mills produced 13280.94 tonnes (19066.18 tonnes) of yarn and sold 10194.43 tonnes (18516.40 tonnes) of yarn. The sales include 4317.22 tonnes (4031.09 tonnes) amounting to Rs.8530.92 lakhs (Rs.8111.76 lakhs) by way of export of yarn including Merchant Export. During the year, the Company exported Waste Cotton to an extent of 1038.70 tonnes (1088.81 tonnes) amounting to Rs.795.55 lakhs (Rs.487.70 Lakhs). The total sales of the Spinning Division aggregated to Rs.30116.59 lakhs (Rs.37729.60 lakhs) of which export sales including waste cotton export amounted to Rs.9326.47 lakhs (Rs.8599.46 lakhs) constituting 30.96% (22.84%) of the total revenue.

The Knitting Division with 41 knitting machines produced 1355.56 tonnes of fabric (2101.31 tonnes) and sold 967.99 tonnes (2054.87 tonnes) including 387.91 tonnes (269.36 tonnes) by way of export. The Garment Division produced 516288 pieces (423603 pieces) of Garments and contributed revenue of Rs.1665.44 Lakhs (Rs.1571.41 Lakhs)

The Wind Mills, with an installed capacity of 28.795 produced 419.03 lakh units of Wind Electricity as against 436.78 lakh units (28.345 MW) in the last year. Two Wind Mills with a capacity of 0.45 MW which were under sale to Tamil Nadu Electricity Board category, has been shifted to Captive use category during the course of the year, as a result of which the entire power generation by Wind Mills is utilized for captive consumption.

Your Directors report that the performance of the textile spinning units was impacted seriously due to various adverse factors which affected the textile industry. The prices of cotton (raw material) witnessed a wild fluctuation in the cotton season 2010-11. Frequent changes in the policies of the Central Government on yarn export and also export of cotton, had adverse effect on price realized by sale of yarn and also on the prices of raw materials. The severe economic crisis and recession in the overseas market had adverse impact on producers of garments, resulting in subdued demand for yarn in the domestic market. Consequently the yarn and the fabric produced by the textile units out of high priced cotton was sold at a loss during the first six months of the financial year 2011-12. Even though the prices of cotton decreased substantially, during the second half of the year, the Company could not recover the losses in full.

The restriction and control measures of Tamil Nadu Electricity Generation and Distribution Company (TANGEDCO) also caused disruption in production, affecting the utilization and efficiency of spinning production. The spinning units were to operate at a higher power cost by purchase of power at a higher price from third party.

Hence the Textile Units incurred cash loss on account of reasons described above. Inspite of cash loss suffered, the Company honoured all financial commitments in time for servicing of term loans, by tight control on working capital.

PROSPECTS FOR THE CURRENT YEAR 2012 - 2013

The Spinning units with an aggregate capacity of 89472 spindles have reached optimum production level. The scope for increasing capacity utilization in Knitting division is being explored to maximise profits from the division. The Garmenting Division has stabilized the operations and the volume of business is likely to further increase during the current year.

Your Company started to make cash profits from the last quarter of the financial year 2011-12 and continues to improve upon its performance in the first quarter of 2012-13. With cotton prices expected to remain subdued due to lower off take by spinning units all over the world, the Company will be able to make reasonable profits in the ensuing period.

However the prospects of the textile industry depends upon revival of the economy and demand from garment making units both in the domestic and export market, which will step up the demand for cotton yarn produced by spinning units. Steps have been taken by your Company to ensure that the spinning units are insulated from supply constraints of TANGEDCO to supply electricity. Further steps are being explored to produce value added yarn and fabrics.

PUBLIC DEPOSITS

As at the close of the year, there were 50 public deposits involving an amount of Rs.12.06 lakhs remained unclaimed pending receipt of instructions from the deposit holders. Subsequently 2 deposits involving an amount of Rs.0.37 lakhs have been repaid or renewed as per claims received from the deposit holders. As on date 48 deposits involving an amount of Rs.11.69 lakhs still remain unclaimed for which regular follow up is being made to obtain instructions from the deposit holders for repayment. As a policy no fresh Public deposits are accepted and no renewals are made.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 the following Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment :

(i) Sri S V Arumugam

(ii) Sri S K Sundararaman

(iii) Sri S Marusamy

The Directors recommend their re-appointment.

Dr. S V Balasubramaniam ceased to be a Director of the Company by resignation with effect from 28.12.2011. The Board wishes to place on record its appreciation for the valuable services rendered by Dr. S V Balasubramaniam during his long tenure of office as Director and Chairman and for his guidance in the development and growth of the Company.

PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of the Director's report is not furnished as none of the employees were drawing remuneration in excess of limits specified therein.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be included in terms of Section 217(1) (e) of the Companies Act, 1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished in Annexure - I and forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

(i) Your Directors have followed the applicable Accounting Standards in the preparation of Annual Accounts;

(ii) Your 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 2011 -2012 and of the Loss incurred by the Company for that period;

(iii) Your 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; and

(iv) Your Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, Management Discussion and Analysis and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement form part of this Annual Report.

AUDITORS

M/s V K S Aiyer & Co, Chartered Accountants, Coimbatore, the present Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

COST AUDITOR

Sri M Nagarajan, Cost Accountant, Coimbatore has been appointed as Cost Auditor to conduct Cost Audit of the Company for the financial year 2012-2013, subject to approval of Central Government.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review. ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Bankers who have granted financial assistance to the Company by way of Term Loans, Working Capital Loan and Cash Credits and for their continued support. Your Directors also thank the customers and depositors of the Company for their support and confidence reposed in the Company and to the employees at all levels for their co-operation and dedication.

By Order of the Board

Coimbatore S V ALAGAPPAN

28th May 2012 CHAIRMAN & MANAGING DIRECTOR

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Mar 31, 2010

The Directors have pleasure in presenting the Twenty Ninenth Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

Rs.in lakhs Financial Year

2009-2010 2008-2009

Profit before Depreciation 2198.64 1431.79

Less: Depreciation 1350.33 832.46

Profit before prior year/extraneous items 848.31 599.33

Add/(less) : Net adjustment for excess provision withdrawn, Prior year expenses etc., -20.00 2.24

Profit before Tax 828.31 601.57

Less : Provision for Tax

- Income Tax - Current year 142.32 65.30

- Prior year 50.51 101.64

- Wealth Tax - Current year 0.25 0.49

- Prior year 0.36 24.68

- Deferred Tax - Current year 256.48 18.74

- MAT Credit Entitlement

- Current year -140.08 -65.30

- Fringe Benefit Tax

- Current year - 6.00

Profit after Tax 518.47 450.02

Add : Surplus brought forward from last year 27.36 4.82

Amount available for appropriation 545.83 454.84

Appropriations:

Provision for Equity Dividend 216.05 194.44

Provision for Tax on Dividend 35.88 33.05

Transfer to General Reserve 250.00 200.00

Surplus carried over to Balance Sheet 43.90 27.36

Total 545.83 454.84

DIVIDEND

Your Directors are glad to recommend payment of Dividend at the rate of Re.1 per share (i.e) 10% (Last year 9%). The Dividend on Equity Shares together with Distribution Tax on Corporate Dividend will absorb Rs.251.93 lakhs (Rs.227.49 lakhs). The Dividend will be free from Income Tax in the hands of Shareholders.

REVIEW OF OPERATIONS

Your Directors report that though the Companys performance in terms of production and sales of Cotton Yarn and Fabric has improved considerably, there is only a marginal increase in net profit for the year due to higher outlay for Power cost, Interest on loans and Depreciation charge on account of commissioning of new Spinning Unit.

Division wise review of performance of the Company is furnished below:

Textile Division

The textile mills produced 12574.49 tonnes (6143.78 tonnes) of yarn and sold 12665.36 tonnes (7064.92 tonnes) of yarn. The sales include 2063.83 tonnes (1845.87 tonnes) by way of export including Merchant Export. During the year, the Company has exported Waste Cotton also to an extent of 822.38 tonnes (Nil) amounting to Rs.444.58 lakhs (Nil). The total sales of the Spinning division aggregated to Rs.17935.41 lakhs (Rs.9317.98 lakhs) of which export sales including waste cotton export amounted to Rs.3152.29 lakhs (Rs.2085.70 lakhs) constituting 17.58% of the total revenue.

The profits of the Textile units were affected for a major part of the year due to increase in cotton prices, increase in power cost and frequent shut down measures imposed by TNEB and increase in other operating costs. The adverse impact of the above increase in costs was to some extent offset by increase in Yarn prices witnessed in the last quarter of the financial year. Moreover the installation of expanded spinning capacity of 50,400 spindles at Unit-II was completed only in the last quarter. Hence profitability from the textile division did not improve significantly during the current year, in tune with increase in turnover.

The capacity of the knitting division was increased by the addition of 22 knitting machines which helped in value addition. During the year the knitting division produced 1668.42 tonnes of fabric (128.09 tonnes) and sold 1667.78 tonnes (128.09 tonnes) including 71.224 tonnes (Nil) by way of export. The newly started garment division under the name “YESWE CREATIONS” also contributed to the revenue with the value added products.

Wind Mill Division

The Wind Mills, with an installed capacity of 16.795 MW, produced 246.18 lakh units of Wind Electricity as against 211.59 lakh units in last year. At the beginning of the year, windmills with a capacity 3.15 MW were under captive use category out of the 16.795 MW capacity. During the course of the year windmills with an aggregate capacity of 13.195 MW were also shifted to captive use category in stages. Hence, Power sold to TNEB was lower at 110.25 lakh units (154.57 lakh units) which reduced the sales revenue to Rs.303.20 lakhs (Rs.425.07 lakhs).

PROSPECTS FOR THE CURRENT YEAR 2010-2011

Textile Division

The Spinning unit I with 39072 spindles capacity has reached optimum production level. The Unit II near Coimbatore has capacity of 50,400 spindles and is expected to reach optimum capacity utilisation from the first quarter of 2010- 11 onwards. The Knitting division with capacity to produce about 12 MT of knitted fabric is expected to contribute to the overall improvement in performance of the Company. The Garmenting division has also stabilized its operations. Hence, the full benefit of the expanded capacity in spinning, knitting and garmenting will be derived in the ensuing year. The improvement in demand for Textile products in both domestic and export markets augurs well for the Company.

In order to control the spiraling Cotton & Yarn prices, the Government has suspended export of Cotton and Waste Cotton and also made registration of export contract with the Office of the Textile Commissioner mandatory in respect of cotton yarn. These measures are expected to stabilize the Cotton and Yarn prices in the coming months.

Four Wind turbines with an aggregate capacity of 5.75MW to augment windmill capacity further have been installed and will be operational in the first quarter. The generation from the new windmills will be captively consumed by the textile divisions improving the profitability.

Windmill Division

The contribution of Windmills by way of revenue and profit will depend upon favourable Wind conditions during the season and availability of adequate Grid for transmission of Wind energy produced during peak season.

JOINT VENTURE

Joint Venture for manufacture of branded Garments:

The Joint Venture Company namely, M/s.Bannari Amman Apparel Private Limited, in which your Company alongwith its associate is holding 50% interest in the Equity and representation in the Board, has implemented a project for production of branded apparels near Chennai.

PUBLIC DEPOSITS

As at the close of the year, there were 85 public deposits involving an amount of Rs.12.09 lakhs remained unclaimed pending receipt of instructions from the deposit holders. Subsequently 18 deposits involving an amount of Rs.5.42 lakhs have been repaid as per claims received from the deposit holders. As on date 67 deposits involving an amount of Rs.6.67 lakhs still remains unclaimed.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 the following Directors retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

(i) Sri S K Sundararaman

(ii) Sri S Palaniswami

(iii) Sri C S K Prabhu

The Directors recommend their re-appointment.

The term of office of Sri S V Alagappan expires on 26.06.2010. After considering the recommedations of the remuneration committee at its meeting held on 25.05.2010 the Board of Directors have reappointed Sri S V Alagappan as Managing Director for a further period of 5 years on enhanced remunerations. Such appointment and enhancement of remuneration are subject to approval of shareholders at the ensuing Annual General Meeting.

PARTICULARS OF EMPLOYEES

The information required as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is furnished in Annexure - I and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be included in terms of Section 217(1) (e) of the Companies Act, 1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished in Annexure-II and forms part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As stipulated in Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

(i) Your Directors have followed the applicable Accounting Standards in the preparation of Annual Accounts;

(ii) Your 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 2009-2010 and of the Profit of the Company for that period;

(iii) Your 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; and

(iv) Your Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, Management Discussion and Analysis and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement form part of this Annual Report.

AUDITORS

M/s V K S Aiyer & Co, the present auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

INDUSTRIAL RELATIONS

The relationship with employees continued to remain cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Bankers who have granted financial assistance to the Company by way of Term Loans, Working Capital Loan and Cash Credits and for their continued support. Your Directors also thank the customers and depositors of the Company for their support and confidence reposed in the Company and to the employees at all levels for their co-operation and dedication.

By Order of the Board

S V BALASUBRAMANIAM CHAIRMAN

Coimbatore 27th May, 2010