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Directors Report of Super Spinning Mills Ltd.

Mar 31, 2016

Dear Shareholders,

The Directors are pleased to present the 54th Annual Report of the Company along with audited financial statements for the year ended 31st March, 2016.

Financial Highlights:

The summary of the financial performance of the Company for the year ended 31st March 2016 is as follows. (Rs. lakhs)

Particulars

31.03.2016

31.03.2015

Revenue from operation

34,829

44,050

Other Income

198

585

Total Revenue

35,027

44,635

Earnings before Finance Cost, Depreciation & Tax

686

1,813

Less: Finance Cost

2,143

2,304

Earnings before Depreciation & Tax

(1,457)

(491)

Less: Depreciation and amortization

995

1,037

Profit before Tax

(2,452)

(1,528)

Less : Exceptional Items

24

187

Less: Current and deferred Tax

(299)

(541)

Less: Adjustment for earlier years

--

-

Add : Extraordinary Items

1,595

-

Profit / (Loss) after Tax

(582)

(1,174)

Review of business operations

During the year under review your Company has achieved a total turnover of Rs. 34,829 lakhs and incurred loss of Rs. 582 lakhs as against the previous year turnover of Rs. 44,050 lakhs and the loss of Rs. 1174 lakhs. Your Directors are confident that the performance would be improved during the current financial year.

Change in the nature of business

There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.

Dividend

Due to losses incurred by the Company during the year under review the Directors have not recommended any Dividend for the year ended 31st March 2016.

Transfer to Reserves

Due to losses incurred by the Company during the year under review the company is unable to transfer any amount to its reserves.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund In terms of Section 205A & 205C of the Companies Act, 1956, an amount of Rs. 1,67,816/- being unclaimed dividend (2007-08) was transferred during the year to the Investor Education and Protection Fund established by the Central Government.

Share Capital

The issued, subscribed and paid-up share capital of the Company as on 31.03.2016 stood at Rs. 5,50,00,000/divided into 5,50,00,000 equity shares of Rs. 1/- each. During the year under review the Company has not made any fresh issue of shares.

The Company has decided to delist its equity shares from BSE Ltd due to insignificant transactions of its equity shares in BSE Ltd over a period of time.

Extract of Annual Return

The extract of Annual Return in the prescribed Form No.MGT-9 pursuant to Section 92(3) read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished as Annexure 1 and is attached to this Report.

Board Committees

Details on the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this report.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from those standards;

b) the directors had 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 loss of the company for that period;

c) the directors had 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) the directors had prepared the annual accounts on a going concern basis;

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

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in Respect to Frauds Reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government

There have been no frauds reported by the auditors pursuant to Section 143(12) of the Companies Act 2013.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under both the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Company''s Policy relating to Directors appointment, payment of Remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The Remuneration policy of the Company is annexed herewith as

Annexure 2 and can also be accessed on the Company''s website at the link http://www. superspinning.com/wp-content/uploads/2015/07/ Nomination-and-Remuneration-Policy.pdf. The Criteria for determining qualifications, positive attributes and Independence of Directors and Senior Management Personnel has been stated in Annexure 3 to this report.

Auditors'' Report

There were no qualifications, reservations, adverse remarks or disclaimers made by the M/s.Reddy, Goud and Janardhan, Statutory Auditors and Mr. M.D.Selvaraj of MDS & Associates, Secretarial Auditor in their report.

Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

During the year under review the Company has not granted any loans or given any security or made any investments pursuant to the provisions of Section 186 of the Companies Act, 2013. However, the details in respect of investments made by the Company in the earlier years are disclosed in the notes to the financial statements.

Particulars of Contract or Transactions with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 during the financial year 2015-16 were in the ordinary course of business and on an arm''s length basis. Since there are no transactions which are not on arm''s length basis and material in nature the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.

The policy on related party transactions as approved by the Board of Directors of the Company has been uploaded on the company''s website and may be accessed through the link at http://www. superspinning.com/wp-content/uploads/2015/01/ Policy-on-Related-Party-Transactions.pdf.

Material changes and commitments affecting the financial position of the Company

There has been no material changes and commitments affecting the financial position of the Company which has occurred between the financial year ended 31st March, 2016 and the date of the report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure 4 to this report.

Risk Management Policy of the company

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

Whistle Blower Policy (Vigil Mechanism)

The details of the composition of the Audit Committee have been enumerated in the Corporate Governance Report which forms a part of the Board''s report. The Company has formulated a Whistle Blower policy in line with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 to enable the directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct or ethics policy. The policy also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower policy has been uploaded on the company''s website and may be accessed through the link at http://www. superspinning.com/wp-content/uploads/2015/01/ Whistleblower-Policy.pdf.

Corporate Social Responsibility initiatives

The Board has constituted a Corporate Social Responsibility Committee comprising of the following directors as its members;

1. Mr. C S K Prabhu - Chairman

2. Mr. Sumanth Ramamurthi - Member

3. Mr. A.S.Thirumoorthy - Member

The company has adopted a Corporate Social Responsibility Policy defining therein the CSR activities to be undertaken by the Company in line with the provisions of Schedule VII of the Companies Act, 2013.

The Corporate Social Responsibility Committee of the Board is responsible for the implementation and effective monitoring of the CSR activities of the Company.

The Annual Report on Company''s CSR activities of the Company is furnished in the prescribed format as Annexure 5 to this report.

Annual evaluation of the Board on its own performance and of the Individual Directors

In accordance with the criteria suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each Independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc.

The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc.

Directors & Key Managerial Personnel

The tenure of office of Mr. Vijay Venkataswamy as an Independent Director of the Company expires on 31st May 2016. The Board of Directors at their meeting held on 30th May 2016 recommended the reappointment of Mr. Vijay Venkataswamy, as an Independent Director for a second tenure for one year with effect from 1st June 2016 to 31st May 2017.

Mr. A S Thirumoorthy, Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Your Directors recommend his re-appointment.

Mr. R Srikanth, Company Secretary tendered his resignation during the year under review and he has been relieved of his duties from the closing hours of the business on 20th October 2015. Ms. Ramaa Krishnakumar, has been appointed as Company Secretary and Compliance Officer of the Company with effect from 7th November 2015.

Key Managerial Personnel of the Company as required under Section 2(51) and 203 of the Companies Act,2013 are Mr.Sumanth Ramamurthi, Executive Chairman, Mr.A.S.Thirumoorthy, Managing Director, Mr.N.Hemanand, Chief Financial Officer and Ms.Ramaa Krishnakumar, Company Secretary.

Subsidiaries, Joint Ventures and Associate Companies

The Company has two subsidiaries namely M/s.Sara Elgi Arteriors Limited - a wholly owned subsidiary and M/s. Elgi Building Products Limited - step down subsidiary.

A report containing the salient features of the subsidiaries as required under Section 129(3) of the Companies Act, 2013 has been annexed herewith in Form AOC-1 and is attached as Annexure 6 to this report.

The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the Company in the immediately preceding financial year or has generated 20% of the consolidated income of the Company during the previous financial year. The policy on determination of material subsidiaries of the company as approved by the Board of Directors has been uploaded on the website of the Company and can be accessed at the link http://www. superspinning.com/wp-content/uploads/2015/01/ Policy-on-Subsidiaries.pdf.

The consolidated financial statements of the company and its subsidiaries prepared in accordance with the applicable accounting standards have been annexed to the Annual Report.

The annual accounts of the subsidiary companies are posted on the website of the Company viz. www. superspinning.com and will also be kept open for inspection to any shareholder at the Registered Office of the Company. The Company shall also provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Fixed Deposits

Since the Company has not accepted any fixed deposits covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March 2016 and accordingly, the question of default in repayment of deposits or payment of interest thereon, during the year, does not arise.

Details of significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and Company’s operation in future

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company''s operation in future.

Adequacy of Internal Financial Controls with reference to the Financial Statements

The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The committee reviews the statutory auditors'' report, key issues, significant processes and accounting policies.

The Directors confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

Auditors

Statutory Auditors

M/s.Reddy, Goud & Janardhan, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee & the Board of Directors recommend the re-appointment of M/s.Reddy, Goud & Janardhan, Chartered Accountants as the Statutory Auditors of the Company. Further, company has received a certificate from the Statutory Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Necessary resolution for the appointment of Auditors has been included in the Notice of the Annual General Meeting for the approval of the Members.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. M.D.Selvaraj, MDS & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of the Secretarial report is annexed herewith as Annexure 7 to this report.

Cost Auditors

The Board of Directors on the recommendation of the Audit Committee, have reappointed M/s. S.Mahadevan & Co., Cost Accountants, as the Cost Auditors of the company for the financial year 2016-17.

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to the Cost Auditors is subject to the ratification of the members in a general meeting. The Board recommends the ratification of their remuneration.

Particulars of Employees

The disclosure as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure 8 and is attached to this report.

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate exceeding Rs. 60,00,000/-if employed throughout the year or Rs. 5,00,000/- per month if employed for part of the year.

Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of Corporate Governance, Management Discussion and Analysis statement forms part of the Annual Report.

Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Sexual Harassment of Women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has constituted an internal complaints committee to address the complaints regarding sexual harassment. All employees are covered under this policy. The company has received few complaints and all the complaints are properly settled after conducting inquiry.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Acknowledgements

Your Directors wish to thank the Company''s Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board

Sumanth Ramamurthi

Coimbatore Executive Chairman

30th May 2016 DIN: 00002773


Mar 31, 2015

Dear Shareholders,

The Directors are pleased to present the 53rd Annual Report of the Company along with audited financial statements for the year ended 31st March, 2015.

Financial Highlights:

The summary of the financial performance of the Company for the year ended 31st March 2015 is as follows. (Rs. lakhs)

Particulars 31.03.2015 31.03.2014

Revenue from operations 44,050 52,120

Total Revenue 44,635 52,623

Earnings before Finance 1,626 4,373 cost, Depreciation & Tax

Less: Finance cost 2,304 2,380

Earnings before Deprecia- (678) 1,993 tion & Tax

Less: Depreciation & Amor- 1,037 1,511 tisation

Profit before Tax

Less: Current & Deferred (541) 150

Tax

Less: Adjustment for earlier - - years

Profit after tax

Add: Balance brought (3,369) (3,701) forward

Profit available for (4,543) (3,369) appropriations and carry forward

Dividend

Due to losses incurred by the Company during the year under review the Directors have not recommended any Dividend for the year ended 31st March 2015.

Transfer to Reserves

Due to losses incurred by the Company during the year under review the company is unable to transfer any amount to its reserves.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

In terms of Section 205A & 205C of the Companies Act, 1956, an amount of Rs. 6,42,276/- being unclaimed dividend (2006-07) was transferred during the year to the Investor Education and Protection Fund established by the Central Government. The unclaimed dividend for the year 2007-08 is due for remittance on 28th October 2015 to the Investors Education and Protection Fund during this year.

Share Capital

The issued, subscribed and paid-up share capital of the Company as at 31.03.2015 stood at Rs. 5,50,00,000/- divided into 5,50,00,000 equity shares of Rs. 1/- each. During the year under review the Company has not made any fresh issue of shares.

Extract of Annual Return

The extract of Annual Return in the prescribed Form No.MGT-9 pursuant to Section 92(3) read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished as Annexure 1 and is attached to this Report.

Board Meetings Conducted During the Period under Review

The Company had conducted Four (4) Board meetings during the period under review. Further details on the Board and Committee meetings held during the year have been enumerated in the Corporate Governance Report which is annexed to this report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from those standards;

(b) the directors had 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 loss of the company for that period;

(c) the directors had 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) the directors had prepared the annual accounts on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under both the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Company's Policy Relating to Directors Appointment, Payment of Remuneration and other matters provided Under Section 178(3) of the Companies Act, 2013.

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 2 and is attached to this report and can also be accessed on the Company's website at the link http://www.superspinning.com/ wp-content/uploads/2015/07/Nomination-and- Remuneration-Policy.pdf.

Auditors' Report

There were no qualifications, reservations, adverse remarks or disclaimers made by the M/s.Reddy, Goud and Janardhan, Statutory Auditors and Mr.M.D.Selvaraj of MDS & Associates, Secretarial Auditor in their report.

Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

The Company has not granted any loans or given any security or made any investments pursuant to the provisions of Section 186 of the Companies Act, 2013 during the year under review. However, the details in respect of investments made by the Company in the earlier years is disclosed in the notes to the financial statements.

Particulars of contracts or arrangements with Related Parties

All transactions entered into with related parties as defined under the Companies Act, 2013 during the financial year 2014-15 were in the ordinary course of business and on an arm's length basis. Since there are no transactions which are not on arm's length basis and material in nature the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.

The policy on related party transactions as approved by the Board of Directors of the Company has been uploaded on the company's website and may be accessed through the link at http://www. superspinning.com/wp-content/uploads/2015/01/ Policy-on-Related-Party-Transactions.pdf.

Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which has occurred between the financial year ended 31st March, 2015 and the date of the report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure 3 to this report.

Statement concerning development and implementation of Risk Management Policy of the Company

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

Whistle Blower Policy (Vigil Mechanism)

The details of the composition of the Audit Committee have been enumerated in the Corporate Governance Report which forms a part of the Board's report. The Company has formulated a whistle blower policy in line with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the listing agreement to enable the directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. The policy also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower policy has been uploaded on the company's website and may be accessed through the link at http://www. superspinning.com/wp-content/uploads/2015/01/ Whistleblower-Policy.pdf.

Details of Policy Developed and Implemented by the Company on its Corporate Social Responsibility initiatives

The Board has constituted a Corporate Social Responsibility Committee comprising of the following directors as its members;

1. Mr. C S K Prabhu - Chairman

2. Mr. Sumanth Ramamurthi - Member

3. Mr. A.S.Thirumoorthy - Member

The company has adopted a Corporate Social Responsibility Policy defining therein the CSR activities to be undertaken by the Company in line with the provisions of Schedule VII of the Companies Act, 2013. The Corporate Social Responsibility Committee of the Board is responsible for the implementation and effective monitoring of the CSR activities of the Company.

The Company was however not required to incur any expenditure on the CSR initiatives during the year under review as the average net profits of the preceeding three financial years of the company was in the negative.

The Annual Report on Company's CSR activities of the Company is furnished in the prescribed format as Annexure 4 and attached to this report.

Annual evaluation of the Board on its own performance and of the Individual Directors

In accordance with the criteria suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each Independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.

Directors & Key Managerial Personnel

During the year under review, the Members have approved the appointment of Mr. C.S.K. Prabhu, Mr.B.Vijayakumar, Mr.Sudarsan Varadaraj, Mr.Vijay Venkataswamy, Mr.C.G. Kumar and Mrs.Suguna Ravichandran as the Independent Directors of the Company for a period of 5 years.

The Members at the Annual General Meeting held on 10th September 2014 approved the appointment of Mr.Sumanth Ramamurthi and Mr.A.S.Thirumoorthy as the Executive Chairman and the Managing Director respectively with effect from 1st April 2014.

Mr.N.Hemanand was appointed as the Chief Financial Officer of the Company with effect from 1st April 2014.

Mr.Sumanth Ramamurthi, Executive Chairman of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment.

Your Directors recommend his re-appointment.

Subsidiaries, Joint Ventures and Associate Companies

The Company has two subsidiaries namely M/s.Sara Elgi Arteriors Limited - a wholly owned subsidiary and M/s.Elgi Building Products Limited - step down subsidiary.

A report containing the salient features of the subsidiaries as required under Section 129(3) of the Companies Act, 2013 has been annexed herewith in Form AOC-1 and is attached as Annexure 5 to this report

The company does not have any material subsidiaries whose individual transactions exceeds 20% of the annual consolidated net worth of the holding company as per the last audited financial statements of the Company. The policy on determination of material subsidiaries of the company as approved by the Board of Directors has been uploaded on the website of the Company and can be accessed at the link http://www. superspinning.com/wp-content/uploads/2015/01/ Policy-on-Subsidiaries.pdf.

The consolidated financial statements of the company and its subsidiaries have prepared in accordance with the applicable accounting standards have been annexed to the Annual Report.

The annual accounts of the subsidiary companies are posted on the website of the Company viz. www. superspinning.com and will also be kept open for inspection by any shareholder at the Registered Office of the Company. The Company shall also provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Fixed Deposits

Since the Company has not accepted any fixed deposits covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March 2015 and accordingly, the question of default in repayment of deposits or payment of interest thereon, during the year, does not arise.

Details of Significant and Material orders passed by the regulators or Courts or Tribunals impacting the going concern status and Company's operation in future

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future.

Internal Control Systems and their Adequacy

The Company has adequate internal control systems to monitor internal business process, financial reporting and compliance with applicable laws. The Company periodically reviews the adequacy and effectiveness of the control systems.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action and the internal audit reports. The committee reviews with the statutory auditors and the management, key issues, significant processes and accounting policies.

AUDITORS Statutory Auditors

M/s.Reddy, Goud & Janardhan, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee & the Board of Directors recommend the re-appointment of M/s. Reddy, Goud & Janardhan, Chartered Accountants as the Statutory Auditors of the Company. Further, company has received a certificate from the Statutory Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr.M.D.Selvaraj, MDS & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of the Secretarial report is annexed herewith as Annexure 6 to this report.

Cost Auditors

The Board of Directors on the recommendation of the Audit Committee, have appointed M/s.S.Mahadevan & Co., Cost Accountants, as the Cost Auditors of the company for the financial year 2015-16.

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to the Cost Auditors is subject to the approval of the members in a general meeting. The Board recommends the ratification of their remuneration.

Pursuant to Section 209(1)(d) of the Companies Act, 1956, the Cost Audit Report for the financial year ended 31st March 2014 was submitted to the Central Government on 29th September 2014.

Particulars of Employees

The disclosure as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure 7 and is attached to this report.

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs. 60,00,000/- if employed throughout the year or Rs. 5,00,000/- per month if employed for part of the year. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of Corporate Governance, Management Discussion and Analysis statement forms part of the Annual Report.

Disclosure under the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Sexual Harassment of Women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company has constituted an internal complaints committee to address the complaints regarding sexual harassment. All employees are covered under this policy. The company has received some complaints and all the complaints are properly settled after conducting inquiry.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Acknowledgements

Your Directors wish to thank the Company's Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board

Sumanth Ramamurthi

Coimbatore Executive Chairman

27th May 2015 DIN: 00002773


Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 52nd Annual Report together with the audited statement of accounts for the financial year ended 31st March 2014.

Financial Results (Rs. lakhs)

Particulars 31.03.2014 31.03.2013

Revenue From Operation 52,120 43,414

Total Revenue 52,623 44,217

Earnings before Finance Cost, Depreciation and Tax 4,373 4,842

Less: Finance Cost 2,380 2,311

Earnings before Depreciation and Tax 1,993 2,531

Less: Depreciation and Amortization 1,511 1,697

Profit before Tax 482 834

Less: Current and Deferred Tax 150 86

Less: Adjustment for earlier years 0 (2)

Profit after Tax 332 751

Add: Balance brought forward (3,701) (4,452)

Profit available for appropriations and carry forward (3,369) (3,701)

MANAGEMENT DISCUSSION AND ANALYSIS

Dividend

Due to carry forward losses, the Directors have not recommended any dividend for the year.

Industry Conditions and Review of Operations

The Indian textile industry witnessed reasonable improvement during the course of the year. During the year under review your company was able to maintain its performance due to stable cotton prices, remunerative yarn price, upward trend in export of cotton yarn coupled with depreciation of Indian Rupee and through dedicated efforts aimed at improving operational efficiency, focus on optimal product mix and effective cost saving practices.

Power situation was cause of concern for most part of the financial year. The Company has taken up the modernization of its manufacturing facilities and planning an outlay of around Rs. 50 Crores towards the above in the next 3 to 4 years.

Company outlook

During the current year, in the first quarter the demand for the yarn is subdued and yarn prices could not be increased corresponding to the increase in cotton prices.

Opportunities, Risks and Concerns

The cotton price is subject to climatic conditions and market volatility. The probable impact of climatic conditions in current year is expected to have a bearing on the cotton prices.

Exports may partly get affected since European Markets are yet to improve. Power shortage and Labour shortage are major concerns, which could have impact on operations of the Company. Higher inflation and increase in interest rates would have adverse impact on profit margins of the company.

Subsidiary Companies and Consolidated Financial Statements of Subsidiaries

The Company has two subsidiaries namely M/s Sara Elgi Arteriors Limited - a wholly owned subsidiary and M/s Elgi Building Products Limited - step down subsidiary. The statement pursuant to Section 212 of the Companies Act 1956, containing details of subsidiaries of the Company forms part of this Annual report.

The Ministry of Corporate Affairs vide General Circular No. 2/2011 dt. 8th February 2011 has granted a general exemption from attaching a copy of the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies along with holding company and hence the same have not been attached herein.

The Consolidated Financial Statements of the Company and its subsidiary companies prepared in accordance with the Accounting Standard 21 (AS - 21) and Listing Agreement wherever applicable and forms part of the Annual Report and Accounts.

However, as per the conditions of the above referred circular the brief financial statement of subsidiaries is included in the Annual report The Annual Accounts of the subsidiary companies will be made available to the shareholders seeking such information at any point of time. The annual accounts of the Subsidiary Companies will also be kept open for inspection by any shareholder at its Registered Office.

Directors

The term of office of Mr. Vidyaprakash D, Executive Chairman and Mr. Sumanth Ramamurthi, Managing Director came to an end on 31st March 2014. Mr. Vidyaprakash D on completion of his tenure retired from Executive Chairmanship and resigned from the Directorship of the Company. Your Directors wish to place on record its highest appreciation for the significant contributions and valuable guidance given by Mr. Vidyaprakash D as Executive Chairman of the Company during his tenure of office.

The Remuneration Committee and the Board of Directors at their meeting held on 7th February 2014 appointed Mr. Sumanth Ramamurthi as Executive Chairman and Mr. A S Thirumoorthy as Additional and Managing Director of the Company for a period of three years effective from 1st April 2014. The above appointments are subject to the approval of the members at the ensuing Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. D Sarath Chandran is liable to retire by rotation and is eligible for reappointment.

The Nomination and Remuneration Committee and the Board of Directors at their meeting held on 28th May 2014 appointed Mr. C G Kumar and Mrs. Suguna Ravichandran as Additional Directors of the Company with effect from 1st June 2014. Their appointment is subject to the approval of the members at the ensuing Annual General Meeting.

Pursuant to the notification of Section 149 and other applicable provisions of the Companies Act, 2013, and Clause 49 (ii) of the Listing Agreement appointment of Independent Directors is required. Such Independent Directors are not liable to retire by rotation. Accordingly, the following Independent Directors are appointed as below:-

S. Name of the Period of Appointment No. Independent Director

1 Mr. C S K Prabhu 01.06.2014 to 31.05.2019

2 Mr. B Vijayakumar 01.06.2014 to 31.05.2019

3 Mr. Sudarsan Varadaraj 01.06.2014 to 31.05.2019

4 Mr. Vijay Venkataswamy 01.06.2014 to 31.05.2016

5 Mr. C.G Kumar 01.06.2014 to 31.05.2019

6. Ms. Suguna Ravichandran 01.06.2014 to 31.05.2019

Necessary resolutions for the appointment /re- appointment of the aforesaid directors have been included in the notice convening the ensuing Annual General Meeting and details of the proposal for appointment / re-appointment are mentioned in the explanatory statement of the notice. Your directors commend their appointment / re-appointment. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules 2014.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of Corporate Governance, Management Discussion and Analysis statement forms part of the Annual Report.

Transfer To Investors Education And Protection Fund

In terms of Section 205C of the Companies Act, 1956, an amount of Rs.3.74 Lakhs being unclaimed dividend (2005-06) was transferred during the year to the Investors Education and Protection Fund established by the Central Government. The unclaimed dividend for the year 2006-07 will be transferred to the Investors Education and Protection Fund during this year.

Internal Control System

The Company has adequate internal control systems to monitor internal business process, financial reporting and compliance with applicable laws. The Company periodically reviews the adequacy and effectiveness of the control systems.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action and the internal audit reports. The committee reviews with the statutory auditors and the management, key issues, significant processes and accounting policies.

Fixed Deposits

During the year the Company did not accept or renew any Fixed Deposits and no Fixed Deposits remained unclaimed with the Company as on 31st March 2014.

Auditors

M/s. Reddy, Goud & Janardhan, the Auditors of the Company retires at the ensuing Annual General Meeting and have given their consent for re- appointment. The company has received confirmation from them that, if appointed, it would be within the limits under Section 139 of the Companies Act, 2013. The Audit committee and the Board of Directors of the company propose the reappointment of the auditors.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Statutory Information

A statement showing particulars of technology absorption under Section 217(1) (e) of the Companies Act, 1956 and a report on corporate governance are enclosed and form part of this report. Information pursuant to Section 217(2A) of the Companies Act, 1956, is not furnished, as there are no employees covered by the said provisions.

Directors Responsibility Statement u/s. 217 (2AA)

Your Directors confirm that:

-In the preparation of the annual accounts, all applicable accounting standards had been followed along with proper explanation relating to material departures

-We 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 as at the end of financial year and of the profit or loss of the company for that period.

-Proper and significant 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 the preventing and detecting fraud and other irregularities.

-The annual accounts have been prepared on a going concern basis.

Recognition and Reward

Your Directors are glad to inform that during the year the Company has been recognized and won the best implementing partner award on 2013 for supporting Tami Nadu Cotton Farmers in soil health management at Mumbai on 22nd March 2013 from international NGO, Solidaridad. Won 2nd prize best project award in International Symposium on Corporate Social Responsibility jointly conducted by Amirta University - India and Deakin University - Australia at Bangalore on 12th & 13th December 2013.

The Company also won the CSR award from Dr Wayne Visser, Director of the think tank Kaleidoscope futures and founder of CSR International- UK.

Acknowledgement

Your Directors wish to thank the Company''s Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board

Coimbatore Sumanth Ramamurthi

28th May 2014 Executive Chairman

DIN : 00002773


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the 51st Annual Report together with the audited statement of accounts for the financial year ended 31st March 2013.

Financial Results

(Rs.lakhs)

Particulars 31.03.2013 31.03.2012

Revenue from operations 43544 38078

Total Revenue 44212 39526

Earnings before Finance cost,

Depreciation & Tax 4842 (1264)

Less: Finance cost 2311 3023

Earnings before Depreciation & Tax 2531 (4287)

Less: Depreciation & Amortisation 1697 1900

Profit before Tax 834 (6187)

Less: Current & Deferred Tax 86 (2251)

Less: Adjustment for earlier years (2) 355

Profit after tax 751 (4292)

Add: Balance brought forward (4452) (160)

Profit / (loss) carried to

Balance sheet (3701) (4452)

Subsidiary Companies

The Company has two subsidiaries namely M/s Sara Elgi Arteriors Limited, a wholly owned subsidiary and M/s Elgi Building Products Limited, a step down subsidiary. The statement pursuant to Section 212 of the Companies Act, 1956 containing details of subsidiaries of the Company forms part of this Annual report.

The Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February 2011 has granted a general exemption from attaching a copy of the Balance Sheet, Statement of Profit & Loss, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies along with holding company and hence the same have not been attached herein.

However, as per the conditions of the above referred circular the brief financial statement of subsidiaries is included in the Annual report. The Annual Accounts of the subsidiary companies will be made available to the shareholders seeking such information at any point of time. The annual accounts of the Subsidiary Companies will also be kept open for inspection by any shareholder at its Registered / Corporate Office.

Directors

Mr. Vijay Venkataswamy, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. D Sarath Chandran, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The particulars of the Directors proposed to be appointed or re-appointed are given in the Notice of this Annual Report.

Internal Control System

The Company has adequate internal control systems to monitor internal business process, financial reporting and compliance with applicable laws. The Company periodically reviews the adequacy and effectiveness of the control systems.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action in the internal audit reports. The committee reviews with the statutory auditors and the management, key issues, significant processes and accounting policies.

Foreign Exchange earnings and outgo

Total Foreign exchange earned and used: Earned : Rs. 9920.85 lakhs Used : Rs. 996.55 lakhs

Fixed Deposits

During the year the Company did not accept any Fixed Deposits and no Fixed Deposits remained unclaimed with the Company as on 31st March 2013.

Auditors

M/s. Reddy, Goud & Janardhan, the Auditors of the Company retire at the ensuing Annual General Meeting and have given their consent for re-appointment. The company has received confirmation from them that, if appointed, it would be within the limits under Section 224(1B) of the Companies Act, 1956. The Audit committee and the Board of Directors of the company propose the reappointment of the auditors.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956, the Board of Directors of your company have re-appointed M/s S. Mahadevan & Co as Cost Auditors, subject to the approval of the Central Government for the financial year 2013-14. The company has filed the Cost audit report for the financial year 2012-13 on 26.01.2013 (Due Date: 31.01.2013).

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Statutory Information

A statement showing particulars of technology absorption under Section 217(1) (e) of the Companies Act, 1956 and a report on corporate governance are enclosed and form part of this report. Information pursuant to Section 217(2A) of the Companies Act, 1956, is not furnished, as there are no employees covered by the said provisions.

Directors Responsibility Statement u/s. 217 (2AA)

Your Directors confirm that:

in the preparation of the annual accounts, all applicable accounting standards had been followed along with proper explanation relating to material departures

we 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 as at the end of financial year and of the profit or loss of the company for that period. proper and significant 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.

The annual accounts have been prepared on a going concern basis.

Recognition and Reward

Your Directors are glad to inform that during the year the Company has been recognized as an implementing partner for the BCI project being implemented in Tamil Nadu. This is in recognition of our contribution towards BCI. BCI program leads the way for new business development along with social responsibility and environment safety, which is being emphasized of late in corporate entities.

Acknowledgement

Your Directors wish to thank the Company''s Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board

Coimbatore Vidyaprakash D

27th May, 2013 Executive Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 50th Annual Report together with the audited statement of accounts for the financial year ended 31st March 2012.

Financial Results (Rs. in lakhs)

Particulars 31.03.2012 31.03.2011

Revenue from operations 37795 47776

Total Revenue 39243 48378

Earnings before Finance cost, Depreciation & Tax (1264) 5856

Less: Finance cost 3023 2293

Earnings before Depreciation & Tax (4287) 3563

Less: Depreciation & Amortisation 1900 2081

Profit before Tax (6187) 1482

Less: Current & Deferred Tax (2251) (19)

Less: Adjustment for earlier years 355 110

Profit after tax (4292) 1391

Add: Balance brought forward (160) (1551)

Profit available for appropriations and carry forward (4452) (160)

Dividend

Your Directors have not recommended any dividend for the financial year 2011-12 since the Company has incurred a loss.

Directors

Mr. Sudarsan Varadaraj, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. C S K Prabhu, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The particulars of the Directors proposed to be appointed or re-appointed are given in the Notice of this Annual Report.

Internal Control System

The Company has an effective internal control system that is commensurate to the size and nature of its business and ensures timely and accurate financial reporting in accordance with applicable accounting standards, compliance with applicable laws, management policies, listing agreements and regulations, optimum utilization, timely maintenance and safety of assets, and an effective management information system based on the SAP - ERP system, the efficacy of which is constantly reviewed and improved to ensure reliability of the processes. The Internal Auditor appointed by the Board conducts regular audit of the internal control systems and reports to the Audit Committee of the Board of Directors, which periodically reviews the performance and adequacy of internal control systems and tracks compliance status of Audit observations.

Foreign Exchange earnings

Total Foreign exchange earned and used:

Earned : Rs. 5760.76 Lakhs

Used : Rs. 1037.44 Lakhs

Fixed Deposits

During the year the Company did not accept or renew any Fixed Deposits and no Fixed Deposits remained unclaimed with the Company as on 31st March 2012.

Auditors

M/s. Reddy, Goud & Janardhan, the Auditors of the Company retire at the ensuing Annual General Meeting and have given their consent for re-appointment.

Cost Auditors

Pursuant to the provisions of the Section 233B of the Companies Act, 1956, the Board of Directors of your company have re-appointed M/s S. Mahadevan & Co as Cost Auditors and approved by the Central Government for the Financial Year 2012-2013.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Statutory Information

A statement showing particulars of technology absorption under Section 217(1) (e) of the Companies Act, 1956 and a report on corporate governance are enclosed and form part of this report. Information pursuant to Section 217(2A) of the Companies Act, 1956, is not furnished as there are no employees covered by the said provisions. Directors Responsibility Statement u/s. 217 (2AA)

Your Directors confirm that:

- In the preparation of the annual accounts, all applicable accounting standards had been followed along with proper explanation relating to material departures;

- We 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 as at the end of financial year and of the profit or loss of the company for that period;

- Proper and significant 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 the preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors wish to thank the Company's Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times. The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

By Order of the Board

Coimbatore Vidyaprakash D

22nd May 2012 Chairman


Mar 31, 2011

To the Members,

The Directors have pleasure in presenting the 49th Annual Report together with the audited statement of accounts for the financial year ended 31st March 2011.

Rs. Lakhs FINANCIAL RESULTS 31.03.2011 31.03.2010

Particulars

Sales 47690 38538

Total Income 49708 36811

Earnings before Interest, Depreciation & Tax 5740 4334

Less : Interest 2177 2158

Earnings before Depreciation & Tax 3563 2175

Less : Depreciation 2081 2352

Profit before tax 1482 (177)

Less : Provision for taxation 2 2

Less : Deferred tax (21) (305)

Profit after tax 1501 126

Less : Prior year expenses - 1

Less : Taxes relating to earlier Years 110 93

Net Profit / (Loss) 1391 32

Add : Balance brought forward (1551) (1582)

Profit available for Appropriations (160) (1551) Appropriations

Balance carried forward (160) (1551)

Dividend

Your Directors have not recommended any dividend for the financial year 2010-11 as the Company has a carry forward loss of Rs.160 Lakhs.

Directors

Mr. D Sarath Chandran, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

Mr. B Vijayakumar, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

The particulars of the Directors proposed to be appointed or re- appointed are given in the Notice of this Annual Report. Mr. K R Seethapathy, Executive Director, resigned from the Board with effect from 4th November 2010. The Board wishes to place on record its sincere appreciation for the valuable services ren- dered by Mr. K R Seethapathy during his tenure as Director of the Company.

Internal Control System

The Company has an effective Internal control system that is commensurate to the size and nature of its business and ensures timely and accurate financial reporting in accordance with applicable accounting standards; compliance with applicable laws, management policies, listing agreements and regulations; optimum utilization, timely maintenance and safety of assets, and an effective management information system based on the SAP - ERP system, the efficacy of which is constantly reviewed and improved to ensure reliability of the processes. The Internal Auditor appointed by the Board conducts regular audit of the internal control systems and reports to the Audit Committee of the Board of Directors, which periodically reviews the performance and adequacy of internal control systems and tracks compliance status of Audit observations.

Recognition and Reward

Your Directors are glad to inform that Super - B unit of the company has received "Silver" Award - 2010 from "Innovative Quality Circle" in International level competition from "International Convention On Quality Concepts".

Foreign Exchange earnings

Total Foreign exchange earned and used:

Earned : Rs. 8946 Lakhs Used : Rs. 1330 Lakhs Fixed Deposits

During the year the Company did not accept or renew any Fixed Deposits and no Fixed Deposits remained unclaimed with the Company as on 31st March 2011.

Auditors

M/s. Reddy, Goud & Janardhan, the Auditors of the Company retire at the ensuing Annual General Meeting and have given their consent for re-appointment.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Statutory information

A statement showing particulars of technology absorption under Section 217(1) (e) of the Companies Act, 1956 and a report on corporate governance are enclosed and form part of this report. As regards, information pursuant to Section 217(2A) of the Companies Act, 1956, there are no employees covered by the said provisions.

Directors Responsibility Statement u/s. 217 (2AA)

Your Directors have taken necessary steps to ensure that :

i. All applicable accounting standards have been followed in the preparation of annual accounts.

ii. All the necessary accounting policies have been adhered to and all necessary adjustments 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 the end of financial year and of the profit of the company for the period.

iii Proper and significant 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 the preventing and detecting fraud and other irregularities.

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

Acknowledgement

Your Directors wish to thank the Company's Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

For and on behalf of the Board Vidyaprakash D Chairman

Coimbatore 26th May, 2011


Mar 31, 2010

The Directors present the 48th Annual report together with the audited statement of accounts for the financial year ended 31st March 2010.

Rs. Lakhs FINANCIAL RESULTS 31.03.2010 31.03.2009

Sales 38538 36645

Total Income 36811 36749

Earnings before Interest,

Depreciation & Tax 4334 1771

Less : Interest 2158 2810

Earnings before

Depreciation & Tax 2175 (1039)

Less : Depreciation 2352 2607

Profit before tax (177) (3646)

Less : Provision for taxation 2 2

Less : Deferred tax (305) (1013)

Less : Fringe benefit tax – 22

Profit after tax 126 (2656)

Less : Prior year expenses 1 8

Less : Taxes relating to

earlier Years 93 78

Net Profit / (Loss) 32 (2742)

Appropriations

Proposed Dividend – –

Tax on Dividend – –

General – –

Balance carried froward (1551) (1582)

Dividend

Your Directors have not recommended any dividend for the financial year 2009-10 due to inadequacy of profits.

MANAGEMENT DISCUSSION AND ANALYSIS Industry Conditions and Review of Operations

The Indian textile and clothing industry witnessed noticeable improvement in fortunes during the course of the year on sustained demand for cotton yarn and fabric. The severity of the slowdown in the global economy was largely mitigated by the timely actions of Governments and Central Banks across the world. In India supportive policy measures yielded positive results and the apprehensions of a protracted global recession, which was at a peak when the year began, gradually gave way to renewed optimism.

Cotton production during the year was maintained at the previous years levels but higher exports of cotton caused an increase in domestic prices and the impact of the same was felt on the results of your company also. Interest cost, issues relating to non-availability of quality manpower and power shortage continued to adversely affect the companys operations, causing erosion in margins.

During the year under review your company was able to effect a turnaround in performance through dedicated efforts aimed at improving operational efficiency, quality enhancement, focus on optimal productmix and effective cost saving practices, all of which resulted in improved sales and return to profitability. The remunerative prices and good demand for yarn for the most part of the year helped the company overcome the escalation in cost

of raw material to a certain extent. Although the domestic demand was good, exports are yet to reach the levels attained before the global economic crisis. The domestic consumption driven growth in India is a positive development holding much promise for the future of the Indian economy and industry.

Company outlook

The demand for cotton yarn and fabric is expected to be robust in the forthcoming year also and your company intends to capitalize on this opportunity by fully harnessing the operational efficiencies and brand equity built up over the years. Raw material prices continue to rule at high levels and measures taken by the government to lower prices of cotton have yet to achieve the desired result. With a normal monsoon forecast, the prospects of a good cotton crop in India in the ensuing season are bright and anticipated production increases in other cotton producing countries offers hope for some moderation in cotton prices. In the ensuing year, the Company expects to benefit from the restructuring of operations initiated in the past. The future prospects of the Company are encouraging in view of the sustained demand for yarn and fabric. The improvement in economic conditions in India, increasing domestic consumption and the revival in exports to the major developed economies offer further encouragement.

Opportunities, Risks and Concerns

The strength and resilience of the Indian economy during the economic slowdown and the subsequent recovery holds out great promise for sustained future growth. Increase in domestic per capita consumption of clothing, on account of higher disposable income, is positive for the prospects of the textile sector as a whole. Cost saving and efficient operational practices instituted during the recessionary phase shall continue to positively impact growth and profits in future. Power shortage and non-availability of labour are major concerns, which could lead to escalation in cost of production. The removal of export benefits for cotton yarn by the government along with a further strengthening of the Indian rupee against other major currencies could adversely impact the competitiveness of textile exports.

Subsidiary

During the year, the Company, with a view to nurture profitable business segments outside the traditional area of Textiles, invested a sum of Rs.145 Lakhs to acquire 96.67% of the paid up equity share capital of M/s Sara Elgi Arteriors Limited, comprised of 14.5 Lakhs fully paid up equity shares of face value Rs.10 each. Sara Elgi Arteriors Limited is an unlisted Public Company engaged in the manufacture of environment friendly PVC doors and windows offering superior noise protection benefits and greater architectural harmony. These are in good demand in the construction industry and the company has high potential for future growth. As a result of this investment, Sara Elgi Arteriors Limited has become a non-material unlisted Indian subsidiary of the Company in terms of the Companies Act,1956 and the Listing Agreement.

The Statement as required under Section 212 of the Companies Act, 1956, in respect of the Subsidiary of the Company is annexed and forms an integral part of this Report. The Audited Balance Sheet, Profit and Loss Account and other documents in respect of the subsidiary as at March 31, 2010 have been attached to the Balance sheet of the Company.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiary prepared in accordance with the Accounting Standard (AS - 21) prescribed by the Institute of Chartered Accountants of India are attached and form part of the Annual Report and Accounts.

Directors

Mr Sudarsan Varadaraj, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr Vijay Venkataswamy, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The particulars of the Directors proposed to be appointed or re-appointed are given in the Corporate Governance Report of this Annual Report.

Internal Control System

The Company has an effective Internal control system that is commensurate to the size and nature of its business and ensures timely and accurate financial reporting in accordance with applicable accounting standards; compliance with applicable laws, management policies, listing agreements and regulations; optimum utilization, timely maintenance and safety of assets, and an effective management information system based on the SAP - ERP system, the efficacy of which is constantly reviewed and improved to ensure reliability of the processes. The Internal Auditor appointed by the Board conducts regular audit of the internal control systems and reports to the Audit Committee of the Board of Directors, which periodically reviews the performance and adequacy of internal control systems and tracks compliance status of Audit observations.

Recognition and Reward

Your Directors are glad to inform that Super B unit of the company has received Excellence Award-2009 from Innovative Quality Circle National level competition and Excellence Award-2009 from State level Quality Circle competition.

Foreign Exchange earnings

Total Foreign exchange earned and used :

Earned : Rs.10365.88 Lakhs Used : Rs. 1916.62 Lakhs

Fixed Deposits

During the year the Company did not accept or renew any Fixed Deposits and no Fixed Deposits remained unclaimed with the Company as on 31st March 2010.

Auditors

M/s. Reddy, Goud & Janardhan, the auditors of the Company retire at the ensuing Annual General Meeting and have given their consent for re-appointment.

Personnel Relations

Staff and Labour relations during the year at all units of the company continued to be cordial.

Statutory Information

A statement showing particulars of technology absorption under Section 217(1) (e) of the Companies Act, 1956 and a report on corporate governance are enclosed and form part of this report. As regards, information pursuant to Section 217(2A) of the Companies Act,1956, there are no employees covered by the said provisions.

Directors Responsibility Statement u/s. 217 (2AA)

Your Directors have taken necessary steps to ensure that :

i. All applicable accounting standards have been followed in the preparation of annual accounts.

ii. All the necessary accounting policies have been adhered to and all necessary adjustments 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 the end of financial year and of the profit of the company for the period.

iii. Proper and significant 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. The annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors wish to thank the Companys Bankers, Financial Institutions, Customers and Suppliers for their unstinted support and co-operation.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to thank the employees at all levels for their excellent support and contribution made by them.

For and on behalf of the Board Coimbatore Vidyaprakash D

29th May, 2010 Chairman

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