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Directors Report of Sri Arumuga Enterprise Ltd.

Mar 31, 2014

To the Members

The directors are pleased to present their Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2014.

FINANCIAL RESULTS

Rs. Lakhs

Particulars 2013-14 2012-13

Income from Operations 911.05 141.62

Other Income 62.33 0.49

Total Income 973.38 142.11

Profit before Tax 129.62 28.80

Provision for Current Tax 47.00 9.00

Prior year Tax 4.05 0.00

Provision for Deferred Tax (2.46) 0.00

Profit after Tax 81.03 19.80

Add: Opening balance in Profit and Loss account 76.39 64.61

Less: Prior year Expenses 1.15 0.00

Balance available for appropriations 156.27 84.41

Proposed Dividend 10.00 6.00

Dividend Tax 1.70 1.02

Transfer to General Reserve 1.00 1.00

Profit carried to Balance Sheet 143.57 76.39

Total appropriations 12.70 8.02

Profit carried to Balance Sheet 143.57 76.39



Dividend

Your Directors are glad to recommend for your approval, a dividend of 10% (Rs. 1 per share), [Previous year Rs. 0.60 per share] for the year ended 31st March 2014, involving an outgo of Rs. 10.00 lakhs. Additionally, the dividend distribution tax will involve an outlay of Rs. 1.70 lakhs.

Operations

During the year, the Company reported a Profit after Tax (PAT) of Rs. 82.43 lakhs as against Rs. 19.80 lakhs for the previous year. During the year under review, the sales and other income were at Rs. 973.38 lakhs as against Rs. 141.62 lakhs for the previous year.

Garment Unit

Your Company has successfully completed its first year of operations with manufacturing of garments which has huge potential on export target of textiles set by the Government of India. The Management is confident by bagging new orders from Direct buyers, which will contribute higher margin on our exports by improving capacity utilization of units during the financial year 2014-15.

Depository System

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on 31st March 2014, 84.55% of the Company''s total paid-up Capital representing 8,45,490 Shares is in dematerialised form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the Depositories.

Deposits

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March 2014.

Subsidiary Companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss and other documents of the subsidiary companies, Sri Mahasakthi Mills Limited and Sri Arumuga Cottspin Private Limited are not being attached with the Balance Sheet of the Company. The summary of the key financials of the Company''s Subsidiaries is included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies shall be kept for inspection by any shareholders at Registered Office of the holding company.

Disclosure of Particulars

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The details of Foreign Exchange Earnings and Foreign Exchange Outgo are annexed in Annexure - I of the Directors'' Report.

Personnel

The Company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

Corporate Governance Report

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance (including Management Discussion and Analysis Report) and a certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under the Listing Agreement forms part of the Annual Report.

Consolidated Financial Statements

The Directors also present the audited consolidated financial statements incorporating the audited financial statements of the subsidiaries prepared in accordance with the Accounting Standards and Listing Agreement as prescribed by SEBI.

Directors'' Responsibility Statement

The Board of Directors of the Company confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors 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 as at 31st March 2014 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

Directors

Sri K Dhanakumar, Director retires from the Board by rotation and is eligible for re-appointment and Sri Vaibhav Duvvur and Sri S Sanjay, Independent Directors appointed as required under Companies Act,2013 for a period of five years commencing from 29th September 2014.

The profile of the director, as required under Clause 49(IV)(G) of the Listing Agreement entered into with stock exchanges are given in the Annexure to the Notice of the Annual General Meeting.

Audit Committee

The Audit Committee consists of three Non-Executive Directors out of which two are Independent Directors. The present members of the Committee are Sri S Sanjai, Mr K Dhanakumar and Sri Vaibhav Duvvur. Sri S Sanjai is the Chairman of Audit Committee. The role, terms of reference, the authority and power of Chairman are in conformity with the requirements of the Companies Act, 1956.

Auditors

The Auditors, M/s S Lakshminarayanan Associates, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

Acknowledgements

Your Directors wish to place on record the valuable assistance and co-operation extended by the members and other stakeholders.

For and on behalf of the Board

30th May 2014 T Rajkumar Coimbatore Chairman & Managing Director


Mar 31, 2013

The directors are pleased to present their Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2013.

FINANCIAL PERFORMANCE

The highlights of the Standalone Financial Results are as under: (Rs. in lakhs)

Particulars 2012-13 2011-12

Income from Operations 141.62 102.33

Other Income 0.49 0.00

Total Income 142.11 102.33

Profit before Tax 28.80 27.83

Provision for Current Tax 9.00 10.00

Provision for Deferred Tax 0.00 -0.77

Profit after Tax 19.80 18.60

Add : Opening balance in Profit and Loss account 64.61 46.01

Balance available for appropriations 84.41 64.61

Proposed Dividend 6.00 0.00

Dividend Tax 1.02 0.00

Transfer to General Reserve 1.00 0.00

Profit carried to Balance Sheet 76.39 0.00

Total appropriations 8.02 0.00

DIVIDEND

Your Directors are glad to recommend for your approval, a dividend of 6% (Rs. 0.60 per share), (Previous year - Nil) for the year ended 31st March 2013, involving an outgo of Rs. 6.00 lakhs. Additionally, the dividend distribution tax will involve an outlay ofRs. 1.02 lakhs.

OPERATIONS

During the year, the Company reported a Profit after Tax (PAT) ofRs. 19.80 lakhs as against Rs. 18.60 lakhs for the previous year. During the year under review, the sales and other income were at Rs. 141.62 as against Rs. 102.33 lakhs for the previous year.

GARMENTS UNIT

Your Company has entered into manufacturing of garments which has huge potential given the export target of textiles set for the fiscal year 2013-14 by the Government of India, which is pegged at US$50 billion including garments. The management is confident of the sector as the order books surge with new and unprecedented export orders due to persistent improvement in factory capacity and compliance of social, welfare and labour laws.

During the year, the Company has taken a Garments manufacturing unit under lease at Tirupur, Tamilnadu. The unit has commenced its business from the month of February 2013 and is mainly focusing on Export of Ready Made Garments to US and European markets.

DEPOSITORY SYSTEM

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on 31st March 2013, 84.43% of the Company''s total paid- up Capital representing 8,44,390 Shares are in dematerialised form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from the Depositories.

DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March 2013.

SUBSIDIARY COMPANIES

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies, Sri Mahasakthi Mills Limited and Sri Arumuga Cottspin Private Limited are not being attached with the Balance Sheet of the Company. The summary of the key financials of the Company''s Subsidiaries are included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies shall be kept for inspection by any shareholder at Registered Office of the holding company.

DISCLOSURE OF PARTICULARS

The particulars required to be included in terms of Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, with regard to energy, absorption, foreign exchange earnings and outgo is furnished in Annexure – I and forms part of this report.

PERSONNEL

The Company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance (including Management Discussion and Analysis Report) and a certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under the Listing Agreement forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors also present the audited consolidated financial statements incorporating the audited financial statements of the subsidiaries prepared in accordance with the Accounting Standards and Listing Agreement as prescribed by SEBI.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirm :

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors 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 as at 31st March 2013 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

DIRECTORS

Sri K Dhanakumar, Director retires from the Board by rotation and is eligible for re-appointment.

The profile of the director, as required under Clause 49(IV)(G) of the Listing Agreement entered into with BSE Limited is given in the Annexure to the Notice of the Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee consists of three Non-Executive Directors out of which two are Independent Directors. The present members of the Committee are Sri S Sanjai, Sri K Dhanakumar and Sri Vaibhav Duvvur. Sri S Sanjai is the Chairman of the Committee.

The role, terms of reference, the authority and power of Chairman are in conformity with the requirements of the Companies Act, 1956.

AUDITORS

The Auditors, M/s S Lakshminarayanan Associates, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to place on record the valuable assistance and co-operation extended by the employees, members and other stakeholders.

For and on behalf of the Board

30th May 2013 T Rajkumar

Coimbatore

Chairman and Managing Director


Mar 31, 2012

The directors are pleased to present their Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2012.

FINANCIAL PERFORMANCE

The highlights of the Standalone Financial Results are as under :

(Rs. in lakhs)

Particulars 2011-12 2010-11

Total Income 102.33 81.57

Profit before Tax 27.83 23.80

Provision for Current Tax 10.00 2.04

Provision for Deferred Tax -0.77 -0.35

Profit after Tax 18.60 22.11

Add: Opening balance in Profit and Loss account 46.01 23.90

Profit carried to Balance Sheet 64.61 46.01

OPERATIONS

During the year, the Company reported a Profit after Tax (PAT) of Rs.18.60 lakhs as against Rs.22.11 lakhs for the previous year. During the year under review, the sales and other income were at Rs.102.33 as against Rs.81.57 lakhs for the previous year.

DIVIDEND

The Board of Directors have not recommended dividend on equity shares for the year ended 31st March 2012.

DEPOSITORY SYSTEM

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on 31st March 2012, 81.49% of the Company''s total paid-up Capital representing 8,41,390 Shares is in dematerialised form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the Depositories.

DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March 2012.

SUBSIDIARY COMPANIES

As of 31st March 2012, the following are the subsidiaries of the Company:

1. Sri Mahasakthi Mills Limited

2. Sri Arumuga Cottspin Private Limited

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The summary of the key financials of the Company''s Subsidiaries is included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies shall be kept for inspection by any shareholders at Registered Office of the holding company.

DISCLOSURE OF PARTICULARS

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. There is no Foreign Exchange Outgo.

PERSONNEL

The Company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance (including Management Discussion and Analysis Report) and a certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under the Listing Agreement forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors also present the audited consolidated financial statements incorporating the audited financial statements of the Subsidiaries prepared in accordance with the Accounting Standards and Listing Agreement as prescribed by SEBI.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors 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 as at 31st March 2012 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

DIRECTORS

Sri S Sanjai, Director retires from the Board by rotation and is eligible for re-appointment.

Sri Vaibhav Duvvur was appointed as an Additional Director of the Company with effect from 14th August 2012. Sri Vaibhav Duvvur holds office up to the ensuing Annual General Meeting. The Company has received a notice in writing from a member signifying his intention to propose him as a candidate for the office of Director. A resolution proposing him as a Director of the Company is placed before the members for their approval at the ensuing Annual General Meeting.

Sri S Venkatachalam has resigned from the Board with effect from 14th August 2012. The Board wishes to place on record its appreciation for his valuable contribution.

The profile of the director, as required under Clause 49 (IV) (G) of the Listing Agreement entered into with stock exchanges are given in the Annexure to the Notice of the Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee consists of three Non-Executive Directors out of which two are Independent Directors. The present members of the Committee are Sri S Sanjai, Sri K Dhanakumar and Sri Vaibhav Duvvur. Sri S Sanjai is the Chairman of Audit Committee.

The role, terms of reference, the authority and power of Chairman are in conformity with the requirements of the Companies Act, 1956.

AUDITORS

The Auditors, M/s S Lakshminarayanan Associates, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to place on record the valuable assistance and co-operation extended by the members and other stakeholders.

For and on behalf of the Board

5th December 2012 T Rajkumar

Coimbatore Chairman and Managing Director

 
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