Mar 31, 2018
The Directors have pleasure in presenting the 36th Annual Report of the Company together with audited accounts of the Company for the financial year ended 31st March, 2018.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
Particulars |
2017-18 (Rs. in Lakhs) |
2016-17 (Rs. in Lakhs) |
Income from operations |
25522.14 |
23741.92 |
Other Income |
254.98 |
419.37 |
Profit before Interest and Depreciation |
3971.86 |
4227.80 |
Less: Interest |
601.85 |
541.74 |
Profit/(Loss) before Depreciation |
3370.01 |
3686.06 |
Less: Depreciation |
1717.55 |
1658.26 |
Profit/(Loss) before Tax |
1652.46 |
2027.80 |
Less: Exceptional item |
- |
- |
(Add)/Less: Provision for Taxes |
231.48 |
570.62 |
Profit/(Loss) after Tax |
1420.98 |
1457.18 |
DIVIDEND
Your Directors recommend a dividend of Rs. 2.50 per equity share of Rs.10/- each for the financial year ended 31st March, 2018, which if approved at the forthcoming Annual General Meeting, will be paid to those equity shareholders whose names appear in the Register of Members as on 19th July, 2018 in respect of shares held in physical form and in respect of shares held in dematerialized form, the dividend shall be paid on the basis of the beneficial ownership as per the details furnished by the Depositories for this purpose at the end of business hours on 19th July, 2018.
SEGMENT WISE PERFORMANCE
Agency Division
Due to lower margins to the textile mills during the implementation pace of GST, the off take of machineries by the mills was restricted which affected the performance of this division.
The total revenue of this division during 2017-18 was Rs. 1822.95 Lakhs. Profit Before Tax was Rs. 864.48 Lakhs compared to Rs. 1005.54 Lakhs during the previous year.
Textile Division
Mismatch of cotton and yarn prices coupled with GST implementation and shortage and high cost of labour have affected the margins. The Company has increased the production of micro modal yarn in which margins were better. However the advantage of captive wind power has helped the division to earn reasonable profits.
This division earned a Profit Before Tax of Rs. 1636.33 Lakhs compared to Rs. 1479.63 Lakhs during the previous year.
Engineering Division
Lower demand of the capital goods manufacturers by OEMs resulted into lower turnover and margins. Competition from various manufacturers in gear boxes have affected the pick up of gear boxes sales.
This division incurred a Loss of Rs. 239.06 Lakhs as against the Profit Before Tax of Rs. 90.98 Lakhs during the previous year.
EXPORTS
The Company has directly exported its products valued at Rs. 1051.77 Lakhs in 2017-18. Exports through merchant exports were Rs. 2896.31 Lakhs. As the Company is required to fulfill Export obligation to the extent of Rs. 11855 Lakhs before 31st March, 2019, efforts have been taken to increase the exports substantially during the current year.
PROSPECTS
As the economy is inching back to normalcy after the initial glitches in the implementation of GST, the performance of the Company is expected to improve in the current year. However the production of cotton, the major raw material for spinning, depends up on the timely rains and remunerative prices to the farmers and hence there may be price volatility which in turn may impact the performance of your Company. Through policy measures of the Government in partnership with industry, the Textile market is expected to reach US $ 300 Billions by the year 2025 and create an additional 35 million jobs. Apart from Central Government schemes, some State Governments have also launched their textile policies under which several incentives are provided for investment in textile sector.
DIRECTORS
Sri. Ravi Sam, Director (DIN 00007465) retires by rotation at the ensuing Annual General Meeting, being eligible, offers himself for re-appointment.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the co-operation extended by the employees. LISTING
Your Company''s shares are listed in BSE Limited. The listing fee to the BSE has been duly paid. The Madras Stock Exchange is in the process of winding up and the Company has not received any Bill for the listing fee. The shares are regularly traded in BSE Limited and were not suspended at any time during the year.
AUDITORS
Statutory Auditors:
The Statutory Auditors M/s. Subbachar & Srinivasan, Chartered Accountants were appointed as Statutory Auditors for a term of five years commencing from the financial year 2016-17 who will retire at the conclusion of the Annual General Meeting to be held in the year 2021 and the shareholders have authorized the Board to fix the remuneration payable to the auditors from time to time.
The first proviso to Section 139 of the Companies Act, 2013, which mandated the ratification of the appointment of Statutory Auditors at every subsequent Annual General Meeting, has been omitted by the Companies (Amendment) Act, 2017 and the same was notified vide notification dated 07th May, 2018. Hence ratification of the appointment of Statutory Auditors is not placed to the shareholders.
The auditors, M/s. Subbachar & Srinivasan, Chartered Accountants, have confirmed their eligibility for continuing as Statutory Auditors of the Company.
Cost Auditor:
Pursuant to provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, has appointed Sri. G. Sivagurunathan, Cost Accountant, as the Cost Auditor of the Company for the financial year 2018-19.
Secretarial Auditor:
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Sri. M.R.L.Narasimha, Practising Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2018-19.
The secretarial audit report for the financial year 2017-18 is enclosed as Annexure 2.
Extract of the annual return as per the provisions of the Companies Act, 2013 is enclosed as Annexure 1.
The details of the meetings of the Board and Committees and attendance of directors are given in the Corporate Governance Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
In compliance of Section 134 of the Companies Act, 2013, the Directors of your Company confirm that:
a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
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 profit and 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f. 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.
DISCLOSURES
Independent Directors have met all the criteria of an Independent Director and they have given a declaration to the effect that they have met all the criteria of an independent director as prescribed in Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The salient features of the Nomination and remuneration Policy is enclosed to this annual report.
Directors are eligible to get only sitting fee for attending the Board or Committee or other meetings of Directors. Outstation directors are entitled to get reimbursement of out of pocket expenses incurred by them in connection with attending of the Board or Committee or other meetings.
There is no qualification, reservation or adverse remarks by the Statutory Auditors in their audit report or Practising Company Secretary in his secretarial audit report. The auditors have not reported any fraud to the Audit Committee or to the Board during the year 2017-18.
Company has not provided any loans, guarantees, security under Section 186 of the Companies Act, 2013 during the year under review. However the Company has made an investment of Rs. 11.38 Crores for the purchase of 25000 equity shares of M/s. Lakshmi Machine Works Limited.
All the transactions entered by the Company during the financial year 2017-18 with the related parties are in the ordinary course of business and at Arm''s length. The details of material related party transactions are given in form AOC -2 as annexure 3.
Board of Directors has decided to transfer Rs. 150 Lakhs, out of profits for the year 2017-2018, to General Reserve.
There is no material change and commitment which have occurred between the end of the financial year and to the date of the report which affect the financial position of the Company.
(A) Conservation of Energy
i. the steps taken or impact of conservation of energy |
Energy efficient motors and replacement of tube lights with LED bulbs are in progress to reduce energy consumption. |
ii. the steps taken by the Company for utilizing alternate source of energy |
The Company has utilized 65.76% of its energy requirements through wind power. |
iii. the Capital investment on energy conservation equipments |
Rs. 7.78 Lakhs. |
(B) Technology absorption
i. Efforts made towards technology absorption. |
Compact spinning system and injection slub attachments have been installed at a cost of Rs. 426.85 Lakhs |
ii. Benefits derived like product improvement, cost reduction, product development, import substitution, etc., |
Better quality yarn produced from compact spinning can be used in high speed air jet looms. Injection slub yarn is a new product. |
iii. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year) |
- |
(a) Details of technology imported. |
- |
(b) Year of import. |
- |
(c) Whether the technology been fully absorbed? |
- |
(d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. |
- |
iv. The expenditure incurred on Research & Development. |
- |
(C) Foreign exchange earnings and out go
The Foreign Exchange earnings and outgo during the year under review were as follows:
Foreign Exchange Earned |
: Rs. |
1043.26 |
Lakhs |
Foreign Exchange Outgo |
|||
Raw Material imports |
: Rs. |
128.27 |
Lakhs |
Stores and Spares imports (including advances) |
: Rs. |
85.49 |
Lakhs |
Capital Imports |
: Rs. |
396.66 |
Lakhs |
Others |
: Rs. |
11.52 |
Lakhs |
: Rs. |
621.94 |
Lakhs |
RISK MANAGEMENT
The Company has established a risk management frame work to identify, evaluate the business risks and opportunities. The main object of the framework is to minimise the adverse impact of the risks by taking effective mitigating measures to retain the business advantages. The identified risks and mitigation measures are reviewed by the concerned Heads and all the risks identified and mitigation measures are placed before the Board. Board is of the opinion that there is no risk which affects the existence of the Company.
CSR ACTIVITIES
The CSR Committee consists of three directors out of which two are independent directors. The Board has approved the CSR Policy and the same is posted in the website of the Company http://www.supersales.co.in/policies.html. As per the policy Company can spent the amount required to be spent under Corporate Social Responsibility to any of the Projects or activities covered under Schedule VII (as amended from time to time) based on the recommendation of the CSR Committee and approved by the Board. The amount can be spent any where in India, however preference shall be given for the geographical locations where the Company''s operations are located. The amount required to be spent under CSR activities may be spent by the Company itself or contributing to any trust which is having established track record as recommended by the CSR Committee and approved by the Board. The CSR Committee shall periodically review and monitor the expenditure made on various projects or activities as approved by the Board. The Company has spent the entire amount required to be spent during the financial year 2017-18. Annual Report on CSR activities is enclosed as Annexure 4.
DISCLOSURE UNDER RULE 8
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out annual evaluation of its own performance, that of its committees and individual directors for the financial year 2017-18. The Chairman of the Board has sent a list of criteria, as approved by the Nomination and Remuneration Committee, for evaluation of the Board''s performance, that of its committees and individual directors to all the Directors. Each Director has evaluated based on the criteria and communicated the results of the evaluation to the Chairman.
There is no change in the nature of business. There is no appointment of Director, Key Managerial Personnel during the year and there is no change in the Key Managerial Personnel.
There is no addition or cessation of Subsidiaries, Joint ventures or Associates during the year 2017-18. The Company has not accepted or holds any deposit from the public or directors or shareholders. There is no significant material order passed by the regulators or courts or tribunals which affects the going concern status or operations in future.
The Company has established adequate internal control system which is commensurate with its nature and volume of operations. All the independent directors are in the first term of appointment. There is no resignation of the Directors during the year 2017-18.
The Composition of the Audit committee is given in the Corporate Governance Report. Board has accepted all the recommendations made by the Audit Committee during the year 2017-18. The Company has complied with the applicable secretarial standards.
The financial results of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies to the extent applicable in accordance with the recognition and measurement principles laid down in Ind AS 34 Interim Financial Reporting. Beginning April 1, 2017, the Company has for the first time adopted Ind AS with a transition date of April 1, 2016.
Particulars pursuant to Section 197(12) and the relevant rules are given in the Annexure 5.
VIGIL MECHANISM
The Company has established vigil mechanism and adopted whistle blower policy which protects persons who uses the mechanism from victimization and allows direct access to the Chairman of the Audit Committee if required. The Policy is posted in the website of the Company.
REMUNERATION POLICY
Based on the recommendation of the Nomination and Remuneration Committee, the Board has approved the Remuneration Policy of the Company for selection and appointment of Directors, senior management personnel, their remuneration, succession plans, Board diversity. The salient features of same is enclosed as Annexure 6 to this report. Weblink to access the policy is http:// www.supersales.co.in/policies.html.
A certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance is enclosed as Annexure 7.
Information pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014
In terms of Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 the Company has no employee drawing salary exceeding Rs. 102 Lakhs per annum or Rs. 8.50 Lakhs per month during the year under review. No employee has drawn remuneration in excess of the remuneration drawn by the Managing Director and holds by himself or along with his spouse and dependent children not less than two percent of equity share capital of the Company.
List of top 10 employees based on salary drawn is enclosed as Annexure 8.
Company is not paying any commission to the directors and whole time director/Managing Director.
Disclosures under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013
Company has not received any complaint under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 during the year 2017-18.
ADDITIONAL DISCLOSURES
In line with the requirement of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report, Related Party disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of the financial statements is also made part of the Annual Report.
GENERAL
The Directors place on record their sincere thanks to all the Principals for their whole hearted cooperation and to the bankers of the Company for their financial assistance. Directors also wish to thank the customers for their support and confidence reposed in the Company and to the employees at all levels for their cooperation and dedication.
For and on behalf of the Board
(Sd.) SANJAY JAYAVARTHANAVELU
Coimbatore Chairman
29th May, 2018 DIN 00004505
Mar 31, 2017
DIRECTORS'' REPORT
The Directors have pleasure in presenting the 35th Annual Report of the Company together with audited accounts of the Company for the financial year ended 31st March, 2017.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2016-17 |
2015-16 |
|
Particulars |
(Rs. in Lakhs) |
(Rs. in Lakhs) |
Income from operations |
25150.59 |
22928.51 |
Other Income |
608.62 |
667.75 |
Profit before Interest and Depreciation |
4285.69 |
4565.93 |
Less: Interest |
574.39 |
677.10 |
Profit/(Loss) before Depreciation |
3711.30 |
3888.83 |
Less: Depreciation |
1635.13 |
1372.80 |
Profit/(Loss) before Tax |
2076.17 |
2516.03 |
Less: Exceptional item |
- |
65.26 |
(Add)/Less: Provision for Taxes |
481.59 |
711.47 |
Profit/(Loss) after Tax |
1594.58 |
1739.30 |
Add: Balance in Profit & Loss Account |
3545.18 |
2898.30 |
Balance carried over to balance sheet |
5139.76 |
4637.60 |
DIVIDEND
Your Directors recommend a dividend of Rs. 2.50 per equity share of Rs.10/- each for the financial year ended 31st March, 2017, which if approved at the forthcoming Annual General Meeting, will be paid to those equity shareholders whose names appear in the Register of Members as on 28th July, 2017 in respect of shares held in physical form and in respect of shares held in dematerialized form, the dividend shall be paid on the basis of the beneficial ownership as per the details furnished by the Depositories for this purpose at the end of business hours on 28th July, 2017.
SEGMENT WISE PERFORMANCE
Agency Division
Disparity between cotton and yarn prices, slow movement of yarn both in the domestic and export markets and un-remunerative prices forced the textile mills to postpone their capital spending which affected the performance of the division.
The total revenue of this division during 2016-17 was Rs. 1939.37 Lakhs. PBT was Rs. 1049.48 Lakhs compared to Rs. 1465.41 Lakhs during the previous year.
Textile Division
The sudden upward movement of cotton prices during the season due to demonetization and lower exports of yarn out of the country have affected the margins.
This division incurred a net loss of Rs. 201.22 Lakhs compared to profit of Rs. 164.83 Lakhs during the previous year.
Wind Energy Division
Due to implementation of the scheduling and forecasting of wind generation and better wind velocity during the year under review resulted in better performance of the division.
This division has earned a PBT of Rs. 1234.41 Lakhs during the year under review compared to Rs. 652.21 Lakhs during the previous year.
Engineering Division
Lesser off take of the capital goods by various industries have affected the performance of the division. Gear boxes sale is yet to pick up.
This division earned a PBT of Rs. 8.47 Lakhs as against Rs. 159.94 Lakhs during the previous year. EXPORTS
In view of the slowdown in China and Europe the yarn export was sluggish. Vietnam is emerging as a major yarn supplier to China which also affects India''s exports to China. We could achieve an export turnover of Rs. 2323.65 Lakhs only during the year under review.
PROSPECTS
On account of severe competition from the countries like China, Bangladesh, Pakistan and Vietnam, our apparel exports are not growing as expected. More over the cotton prices are very volatile where as yarn prices are not keeping pace and hence spinning mills are operating with either thin margins or losses. The prospects for the current year do not indicate major changes. However a silver line is that a bumper cotton crop is expected in view of the normal monsoon and remunerative prices for cotton. This may help in keeping the cotton prices under check and improve margins.
The Engineering division is expected to perform better and the wind energy division may also repeat the performance of the previous year. Implementation of GST will also help us to reduce cost of inputs.
DIRECTORS
Sri. Sanjay Jayavarthanavelu, Director (DIN : 00004505) retires by rotation at the ensuing Annual General Meeting, being eligible, offers himself for re-appointment.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the co-operation extended by the employees. LISTING
Your Company''s shares are listed in BSE Limited. The listing fee to the BSE has been duly paid. The Madras Stock Exchange is in the process of winding up and the Company has not received any Bill for the listing fee. The shares are regularly traded in BSE Limited and were not suspended at any time during the year.
AUDITORS Statutory Auditors:
The Company''s Auditors, M/s. S. Krishnamoorthy & Co., and M/s. Subbachar & Srinivasan, Chartered Accountants hold the office till the conclusion of the ensuing Annual General Meeting.
Out of the statutory Auditors, M/s. S. Krishnamoorthy & Co., Chartered Accountants can hold office till the conclusion of the ensuing Annual General Meeting in terms of 3rd proviso to subsection (2) of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. Hence the reappointment is not being brought up.
The other statutory Auditor, M/s. Subbachar & Srinivasan, Chartered Accountants were appointed as Statutory Auditors for a term of five years commencing from the financial year 2016-17 who will retire at the conclusion of the Annual General Meeting to be held in the year 2021 and ratification of the appointment for the financial year 2017-18 is placed before the shareholders.
The auditors, M/s. Subbachar & Srinivasan, Chartered Accountants have confirmed their eligibility for continuing as Statutory Auditors of the Company.
Cost Auditor:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, has appointed Sri. G. Sivagurunathan, Practising Cost and Management Accountant, as the Cost Auditor of the Company for the financial year 2017-18.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Sri. M.R.L.Narasimha, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2017-18.
The secretarial audit report for the financial year 2016-17 is enclosed as Annexure 2.
Extract of the annual return as per the provisions of the Companies Act, 2013 is enclosed as Annexure 1
The details of the meetings of the Board and Committees and attendance of directors are given in the Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of Section 134 of the Companies Act, 2013, the Directors of your Company confirm that:
a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
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 profit and 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f. 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.
DISCLOSURES
Independent Directors have met all the criteria of an Independent Director and they have given a declaration to the effect that they have met all the criteria of an independent director as prescribed in Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The Nomination and Remuneration Policy is enclosed to this annual report.
Directors are eligible to get only sitting fee for attending the Board or Committee or other meetings of Directors. Outstation directors are entitled to get reimbursement of out of pocket expenses incurred by them in connection with the attending of the Board or Committee or other meetings.
There is no qualification, reservation or adverse remarks by the Statutory Auditors in their audit report or Practising Company Secretary in his secretarial audit report. The auditors have not reported any fraud to the Audit Committee or to the Board during the year 2016-17.
Company has not provided any loans, guarantees, security under Section 186 of the Companies Act, 2013 during the year under review. However the Company has made an investment of Rs. 9.93 Crores for purchase of 25000 equity shares of M/s. Lakshmi Machine Works Limited.
All the transactions entered by the Company during the financial year 2016-17 with the related parties are in the ordinary course of business and at Arm''s length. The details of material related party transactions are given in form AOC -2 as Annexure 3.
There is no material change and commitment which have occurred between the end of the financial year and to the date of the report which affect the financial position of the Company.
(A) Conservation of Energy
i. the steps taken or impact of conservation of energy |
The Energy efficient motors and replacement of tube lights with LED bulbs are in progress to reduce energy consumption. |
|
ii. the steps taken by the Company for utilizing alternate source of energy |
The Company has utilized 76.53% of its energy requirement through wind power. |
|
iii. the Capital investment on energy conservation equipments |
Rs. 8.42 Lakhs |
(B) Technology absorption
i. Efforts made towards technology absorption : -
ii. Benefits derived like product improvement, cost reduction, :
product development, import substitution, etc., Ring spinning machines are replaced with latest compact spinning machines in a phased manner for product improvement.
iii. In case of imported technology (imported during the last
3 years reckoned from the beginning of the financial year) : -
(a) Details of technology imported. : --
(b) Year of import.
(c) Whether the technology been fully absorbed?
(d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action.
iv. The expenditure incurred on Research and Development : -
(C) Foreign Exchange Earnings and out go
The Foreign Exchange earnings and outgo during the year under review were as follows:
Foreign Exchange Earned Foreign Exchange Outgo |
Rs. |
849.61 Lakhs |
Raw Material imports |
Rs. |
800.02 Lakhs |
Stores and Spares imports (including advances) |
Rs. |
131.98 Lakhs |
Capital Imports |
Rs. |
702.02 Lakhs |
Others |
Rs. |
3.28 Lakhs |
Rs. |
1637.30 Lakhs |
RISK MANAGEMENT
The Company has established a risk management frame work to identify, evaluate the business risks and opportunities. The main object of the framework is to minimize the adverse impact of the risks by taking effective mitigation measures to retain the business advantages. The identified risks and mitigation measures are reviewed by the concerned Heads and all the risks identified and mitigation measures are placed before the Board. The Board is of the opinion that there is no risk which affects the existence of the Company.
CSR ACTIVITIES
The CSR Committee consists of three directors out of which two are independent directors. The Board has approved the CSR Policy and the same is posted in the website of the Company. The Company has spent the entire amount required to be spent during the financial year 2016-17. Annual Report on CSR activities is enclosed as Annexure 4.
DISCLOSURE UNDER RULE 8
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out annual evaluation of its own performance, that of its committees and individual directors for the financial year 2016-17. The Chairman of the Board has sent a list of criteria, as approved by the Nomination and Remuneration Committee, for evaluation of the Board''s performance, that of its committees and individual directors to all the Directors. Each Director has evaluated based on the criteria and communicated the results of the evaluation to the Chairman.
There is no change in the nature of business. There is no appointment of Director, Key Managerial Personnel during the year and there is no change in the Key Managerial Personnel. However the Whole time director has been re-designated as Managing Director.
There is no addition or cessation of Subsidiaries, Joint ventures or Associates during the year 2016-17. The Company has not accepted or holds any deposit from the public or directors or shareholders. There is no significant material order passed by the regulators or courts or tribunals which affects the going concern status or operations in future.
The Company has established adequate internal control system which is commensurate with its nature and volume of operations. All the independent directors are in the first term of appointment. There is no resignation of the Directors during the year 2016-17.
The Composition of the Audit committee is given in the Corporate Governance Report. Board has accepted all the recommendations made by the Audit Committee during the year 2016-17.
Particulars pursuant to Section 197(12) and the relevant rules are given in the Annexure 5
VIGIL MECHANISM
The Company has established vigil mechanism and adopted whistle blower policy which protects persons who uses the mechanism from victimization and allows direct access to the Chairman of the Audit Committee if required. The Policy is posted in the website of the Company.
REMUNERATION POLICY
Based on the recommendation of the Nomination and Remuneration Committee, the Board has approved the Remuneration Policy of the Company for selection and appointment of Directors and senior management personnel, their remuneration, policy on succession plans, Board diversity and the same is enclosed as Annexure 6 to this report.
A certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance is enclosed as Annexure 7 to this report.
Information pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014
In terms of Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 the Company has no employee drawing salary exceeding Rs. 102 Lakhs per annum or Rs. 8.50 Lakhs per month during the year under review. No employee has drawn remuneration in excess of the remuneration drawn by the Whole time / Managing Director and holds by himself or along with his spouse and dependent children not less than two percent of equity share capital of the Company.
List of top 10 employees based on salary drawn in enclosed as Annexure 8 to this report.
Company is not paying any commission to the Directors and Whole time Director/Managing Director.
Disclosures under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013
Company has not received any complaint under the Sexual Harrassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 during the year 2016-17.
ADDITIONAL DISCLOSURES
In line with the requirements of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report, Related Party disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interlay, confirming the correctness of the financial statements is also made part of the Annual Report.
GENERAL
The Directors place on record their sincere thanks to all the Principals for their whole hearted co-operation and to the bankers of the Company for their financial assistance. Directors also wish to thank the customers for their support and confidence reposed in the Company and to the employees at all levels for their cooperation and dedication.
For and on behalf of the Board
(Sd.)
SANJAY JAYAVARTHANAVELU
Chairman
DIN: 00004505
Coimbatore 23rd May, 2017
Mar 31, 2016
DIRECTORS'' REPORT
The Directors have pleasure in presenting the 34th Annual Report of the Company together with audited accounts of the Company for the financial year ended 31st March, 2016.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2015-16 |
2014-15 |
|
Particulars |
(Rs. in Lakhs) |
(Rs. in Lakhs) |
Income from operations |
22928.51 |
22059.22 |
Other Income |
667.75 |
520.41 |
Profit before Interest and Depreciation |
4565.93 |
4135.33 |
Less: Interest |
677.10 |
751.74 |
Profit/(Loss) before Depreciation |
3888.83 |
3383.59 |
Less: Depreciation |
1372.80 |
1180.74 |
Profit/(Loss) before Tax |
2516.03 |
2202.85 |
Less: Exceptional item |
65.26 |
92.95 |
(Add)/Less: Provision for Taxes |
711.47 |
528.66 |
Profit/(Loss) after Tax |
1739.30 |
1581.24 |
Add: Balance in Profit & Loss Account |
2898.30 |
2448.68 |
Less: Depreciation adjusted as per Revised schedule II |
-- |
41.78 |
Balance Available for Appropriation |
4637.60 |
3988.14 |
Appropriation: |
||
Proposed Dividend |
76.79 |
76.79 |
Tax on Dividend |
15.63 |
13.05 |
Transferred to General Reserve |
1000.00 |
1000.00 |
Surplus in Profit & Loss Account Carried over to Balance Sheet |
3545.18 |
2898.30 |
DIVIDEND
Your Directors recommend a dividend of Rs.2.50/- per equity share of Rs.10/- each for the financial year ended 31st March, 2016, which if approved at the forthcoming Annual General Meeting, will be paid to those equity shareholders whose names appear in the Register of Members as on 25th July, 2016 in respect of shares held in physical form and in respect of shares held in dematerialized form, the dividend shall be paid on the basis of beneficial ownership as per the details furnished by the Depositories for this purpose at the end of business hours on 25th July, 2016.
SEGMENT WISE PERFORMANCE
Agency Division
The total revenue of this division during 2015-16 was Rs. 2184.37 Lakhs. PBT was Rs. 1465.41 Lakhs compared to Rs. 1429.55 Lakhs during the previous year.
Textile Division
The cotton prices were almost at the bottom level during the major part of the year. But the yarn prices were not remunerative and the division has operated with very thin margins.
This division earned a PBT of Rs.164.83 Lakhs compared to Rs. 68.95 Lakhs during the previous year.
Wind Energy Division
During the year under report the wind velocity was comparatively low. Restricted evacuation of electricity by TANGEDCO has also affected the performance of the division.
This division has posted a PBT of Rs. 652.21 Lakhs during the year compared to Rs. 691.51 Lakhs during the previous year.
Engineering Division
Improvement in the productivity of the Gears and commencing of manufacture of Gear boxes helped the division to achieve higher turnover and profits.
This division earned a PBT of Rs. 159.95 Lakhs as against the loss of Rs. 4.51 Lakhs during the previous year.
EXPORTS
Due to the continuous efforts put in by the Company, the exports of cotton yarn have gone up substantially during the year 2015-16.The Company has achieved an export of Rs. 3843.53 Lakhs compared to Rs. 2456.88 Lakhs during the previous year.
PROSPECTS
The Indian economy is expected to achieve a GDP growth of 7.8 percent during the year 2016-17. The stimulus given by the Government through make in India initiative along with interest rate cuts may revive the manufacturing sector. A normal monsoon may keep the cotton prices at low levels. Taking advantage of these developments, your company is also expected to perform better.
DIRECTORS
Sri. Ravi Sam, Director (DIN : 0007465) retires by rotation at the ensuing Annual General Meeting, being eligible, offers himself for re-appointment.
Sri. N. R. Selvaraj (DIN : 00013954) was appointed as Whole time Director of the Company for a period of three years with effect from 01.02.2014 and will hold office up to 31.01.2017. In order to appoint him as Managing Director for a period of three years necessary resolution will be moved at the ensuing Annual General Meeting.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the co-operation extended by the employees. LISTING
Your Company''s shares are listed in BSE Limited and Madras Stock Exchange Limited. The listing fee to the BSE has been duly paid. The Madras Stock Exchange is in the process of winding up and the Company has not received any Bill for the listing fee. The shares are regularly traded in BSE Limited and were not suspended at any time during the year.
AUDITORS
Statutory Auditors:
The Company''s Auditors, M/s. S. Krishnamoorthy & Co., hold the office till the conclusion of the ensuing Annual General Meeting.
As per provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the present statutory auditors of the Company who have completed a period of 10 years as on 1st April, 2014 are not eligible for re-appointment after the period of 3 years from the commencement of the Companies Act, 2013. i.e after 31stMarch, 2017.
As per the above provisions, M/s. S. Krishnamoorhty &Co., Chartered accountants have completed the period of 10 years as on 1st April, 2014. They are not eligible for re- appointment as Statutory Auditors for the financial year 2017-18.
In order to ensure smooth transition, it is proposed to appoint one more Auditor as a Joint Statutory Auditor for the financial year 2016-17 and the said auditor will continue as a Statutory Auditor of the Company for a term of five years.
It is proposed to appoint M/s. Subbachar & Srinivasan, Chartered Accountants as Statutory Auditors for a term of five years commencing from the financial year 2016-17 who will retire at the conclusion of the Annual General Meeting to be held in the year 2021.
For the financial year 2016-17, M/s. S. Krishnamoorthy & Co, Chartered Accountants and M/s. Subbachar & Srinivasan, Chartered accountants will be the joint Statutory Auditors. M/s. S. Krishnamoorthy & Co, Chartered Accountants will retire at the Annual General Meeting to be held in the year 2017.
The auditors have consented and confirmed their eligibility for appointment as Statutory Auditors of the Company.
Cost Auditor:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, has appointed Sri. G. Sivagurunathan, Practicing Cost and Management Accountant, as the Cost Auditor of the Company for the financial year 2016-17.
Secretarial Auditor:
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sri. M.R.L. Narasimha, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2016-17.
The secretarial audit report for the financial year 2015-16 is enclosed as Annexure 2
Extract of the annual return as per the provisions of the Companies Act, 2013 is enclosed as annexure 1
The details of the meetings of the Board and committees and attendance of directors are given in the Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of Section 134 of the Companies Act, 2013, the Directors of your Company confirm that:
a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
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 profit and 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f. 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.
DISCLOSURES:
Independent Directors have met all the criteria of an Independent Director and they have given a declaration to the effect that they have met all the criteria of an independent director as prescribed in Section 149 of the Companies Act, 2013 and the Listing agreement entered with the Stock exchanges and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The Nomination and Remuneration Policy is enclosed to this annual report.
Directors are eligible to get only sitting fee for attending the Board or Committee or other meetings as approved by the Board of Directors. Outstation directors are entitled to get reimbursement of out of pocket expenses incurred by them in connection with the attending of the Board or Committee or other meetings.
There is no qualification, reservation or adverse remarks by the statutory auditors in their audit report or Practicing Company Secretary in his secretarial audit report. The auditors have not reported any fraud to the Audit Committee or to the Board during the year 2015-16.
Company has not provided any loans, guarantees, security or made any investments under Section 186 of the Companies Act, 2013 during the year under review.
All the transactions entered by the Company during the financial year with the related parties are in the ordinary course of business and at Armâs length. The details of material related party transactions are given in Form AOC -2 as annexure 3.
There is no material changes and commitments which have occurred between the end of the financial year and to the date of the report which affects the financial position of the Company.
(A) Conservation of Energy -
i. the steps taken or impact of conservation of energy |
Energy efficient motors and replacement of tube lights with LED bulbs are in progress to reduce energy consumption. Harmonic control filters have also been installed. |
ii. the steps taken by the Company for utilizing alternate source of energy |
The Company has installed wind energy generators for a total capacity of 26.425 MW to tap the green energy. If the wind energy is fully evacuated this capacity can meet the entire electricity requirements of the Company. |
iii. the Capital investment on energy conservation equipments |
Rs. 15.81 Lakhs |
(B) Technology absorption
i. Efforts made towards technology absorption : -
ii. Benefits derived like product improvement, cost reduction,
product development, import substitution, etc., : -
iii. In case of imported technology (imported during the last
3 years reckoned from the beginning of the financial year) : -
(a) Details of technology imported. : --
(b) Year of import.
(c) Whether the technology been fully absorbed?
(d) If not fully absorbed, areas where this has not taken place,
reasons there for and future plans of action.
iv. The expenditure incurred on Research and Development : --
(C) FOREIGN EXCHANGE EARNINGS AND OUT GO
The Foreign Exchange earnings and outgo during the year under review were as follows:
Foreign Exchange Earned : Rs.1593.05 Lakhs
Foreign Exchange Outgo :
Raw Material imports : Rs. 318.72 Lakhs
Stores and Spares imports (including advances) : Rs. 72.11 Lakhs
Others : Rs. 9.93 Lakhs
Rs. 400.76 Lakhs
RISK MANAGEMENT
The Company has established a risk management frame work to identify, evaluate the business risks and opportunities. The main object of the framework is to minimize the adverse impact of the risks by taking effective mitigating measures to retain the business advantages. The identified risks and mitigation measures are reviewed by the concerned Heads and all the risks identified and mitigation measures are placed before the Board. Board is of the opinion that there is no risk which affects the existence of the Company.
CSR ACTIVITIES
The CSR Committee consists of three directors out of which two are independent directors. The Board has approved the CSR Policy and the same is posted in the website of the Company. The Company has spent the entire amount required to be spent during the financial year. Annual Report on CSR activities is annexed as Annexure 4.
DISCLOSURE UNDER RULE 8
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out annual evaluation of its own performance, that of committees and individual directors for the financial year 2015-16. The Chairman of the Board has sent a list of criteria, as approved by the Nomination and Remuneration Committee, for evaluation of the Boardâs performance, that of committees and individual directors to all the Directors. Each Director has evaluated based on the criteria and communicated the results of the evaluation to the Chairman.
There is no change in the nature of business. There is no appointment of Director, Key Managerial Personnel during the year and there is no change in the Key Managerial Personnel.
There is no addition or cessation of Subsidiaries, Joint ventures or Associates during the year. The Company has not accepted or holds any deposit from the public or directors or shareholders. There is no significant material orders passed by the regulators or courts or tribunals which affects the going concern status or operations in future.
The Company has established adequate internal control system which is commensurate with its nature and volume of operations. All the independent directors are in the first term of appointment. There is no resignation of the Directors during the year 2015-16.
The Composition of the Audit committee is given in the Corporate Governance Report. Board has accepted all the recommendations made by the Audit Committee during the year 2015-16.
Particulars pursuant to section 197(12) and the relevant rules are given in the annexure 5
VIGIL MECHANISM
The Company has established a vigil mechanism and adopted whistle blower policy which protects persons who uses the mechanism from victimization and allows direct access to the Chairman of the Audit Committee if required. The Policy is posted in the website of the Company.
REMUNERATION POLICY
Based on the recommendation of the Nomination and Remuneration Committee, the Board has approved the Remuneration Policy of the Company for selection and appointment of Directors and senior management personnel, their remuneration, policy on succession plans, Board diversity and the same is enclosed as Annexure 6 to this report.
A certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is enclosed as Annexure 7 to this report.
Information Pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
In terms of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has no employee drawing salary exceeding Rs. 60.00 Lakhs per annum or Rs. 5.00 Lakhs per month during the year under review.
Company is not paying any commission to the Directors and Whole time Director.
Disclosures under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013
Company has not received any complaint under the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 during the year 2015-16.
ADDITIONAL DISCLOSURES
In line with the requirement of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report, Related Party disclosures are made part of the Annual Report.
A certificate from CEO & CFO, interalia, confirming the correctness of the financial statements is also made part of the Annual Report.
GENERAL
The Directors place on record their sincere thanks to all the Principals for their whole hearted co-operation and to the bankers of the Company for their financial assistance. Directors also wish to thank the customers for their support and confidence reposed in the Company and to the employees at all levels for their co-operation and dedication.
For and on behalf of the Board
SANJAY JAYAVARTHANAVELU
Chairman
DIN: 00004505
Coimbatore
25th May, 2016
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 33rd Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2015.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2014- 15 2013- 14
Particulars (Rs. in Lakhs) (Rs. in Lakhs)
Income from operations 22059.22 21803.82
Other Income 520.41 549.60
Profit before Interest and Depreciation 4135.33 4851.61
Less: Interest 751.74 945.03
Profit/(Loss) before Depreciation 3383.59 3906.58
Less: Depreciation 1180.74 1935.90
Profit/(Loss) before Tax 2202.85 1970.68
Less: Exceptional item 92.95 ---
(Add)/Less: Provision for Taxes 528.66 281.84
Profit/(Loss) after Tax 1581.24 1688.84
Add: Balance in Profit & Loss Account 2448.68 1849.68
Less: Depreciation adjusted as per
Revised schedule II 41.78 ---
Balance Available for Appropriation 3988.14 3538.52
Appropriation:
Proposed Dividend 76.79 76.79
Tax on Dividend 13.05 13.05
Transferred to General Reserve 1000.00 1000.00
Surplus in Profit & Loss Account
Carried over to Balance Sheet 2898.30 2448.68
DIVIDEND
Your Directors recommend payment of dividend of Rs. 2.50/- per equity
share of Rs.10/- each for the financial year ended 31st March, 2015,
which if approved at the forthcoming Annual General Meeting, will be
paid to those equity shareholders whose names appear in the Register of
Members as on 5th August, 2015 in respect of shares held in physical
form and in respect of shares held in dematerialized form, the dividend
shall be paid on the basis of beneficial ownership as per the details
furnished by the Depositories for this purpose at the end of the
business hours on 5th August, 2015.
SEGMENT WISE PERFORMANCE
Agency Division
The performance of the division during 2014-15 was better compared to
previous year. This division earned a PBT of Rs. 1429.55 Lakhs compared
to Rs.1382.71 Lakhs during the previous year.
Textile Division
The cotton prices were higher during the first half of the year. There
was a sudden fall in the cotton prices in the second half. The fall in
the yarn prices was much steeper during this period. Increase in the
cost of labour and power have affected the performance of the division.
This division earned a PBT of Rs. 68.95 Lakhs compared to Rs. 633.62
Lakhs during the previous year.
Wind Energy Division
In order to ensure the continuous supply of power to the business and
domestic consumers, the Government of Tamilnadu has entered in to a
long term arrangement with private power generation companies and this
has resulted in to lower evacuation of power by the TANGEDCo from wind
power sources. The lower wind velocity has also affected the generation
of wind power.
This division has posted a PBT of Rs. 691.51 Lakhs compared to Rs.
299.61 Lakhs in the previous year, in view of lower depreciation as per
the provisions of the Companies Act, 2013.
Engineering Division
This division has achieved a higher turnover and started making profit
in the last quarter of the year under review. It has incurred a loss of
Rs. 4.51 Lakhs compared to a loss of Rs. 366.63 Lakhs.
EXPORTS
The Company has recorded a multifold increase in exports to Rs. 2456.88
Lakhs from Rs. 585.22 Lakhs. More thrust is given to improve the
exports.
PROSPECTS
As the major economies such as United States and European Union are
expected to perform better during the current year, the Indian economy
is also in a growth trajectory. Hence your Company is expected to do
better. The Engineering division has commenced the manufacture of gear
boxes which will bring in more revenue to the Company.
DIRECTORS
Sri. Sanjay Jayavarthanavelu, Chairman retires by rotation at the
ensuing Annual General Meeting, being eligible, offers himself for
re-appointment.
Smt. Vijayalakshmi Narendra was appointed as an Additional Director of
the Company with effect from 2nd February, 2015 and will hold office up
to the ensuing Annual General Meeting. A notice proposing her
candidature for the Directorship is received from a shareholder.
Necessary resolution will be moved at the ensuing Annual General
Meeting.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the
co-operation extended by the employees. LISTING
Your Company's shares are listed in Bombay Stock Exchange Limited and
Madras Stock Exchange Limited. The listing fee to the Bombay Stock
Exchange has been duly paid. The Madras Stock Exchange is in the
process of winding up and the Company has not received any Bill for the
listing fee. Pursuant to the letter received from the Madras Stock
Exchange, the Company is complying with all other compliance
requirements as per the listing agreement.
AUDITORS
Statutory Auditors
The Company's Auditors, M/s. S. Krishnamoorthy & Co., hold the office
till the conclusion of the ensuing Annual General Meeting. The auditors
have consented and confirmed their eligibility and desire to continue
as statutory auditors of the Company.
Cost Auditor
Pursuant to the provisions of Section 148 of the Companies Act, 2013
read with the Companies (Cost Records and Audit) Amendment Rules, 2014,
the Directors, on the recommendation of the Audit Committee, have
appointed Sri. G. Sivagurunathan, Practicing Cost and Management
Accountant, as the Cost Auditor of the Company for the financial year
2015 -16.
Secretarial Auditor
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 Sri. M. R. L.
Narasimha, Practicing Company Secretary to undertake the Secretarial
Audit of the Company for the financial year 2015-16.
Extract of the annual return as per the provisions of the Companies
Act, 2013 is enclosed as annexure 1 to this report.
The secretarial audit report for the financial year 2014-15 is enclosed
as annexure 2 to this report.
The details of the meetings of the Board and Committees and attendance
of directors are given in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 134 of the Companies Act, 2013, the Directors
of your Company confirm that:
a. in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
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 profit and 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, in the case of a listed company, had laid down
internal financial controls to be followed by the Company and that such
internal financial controls are adequate and were operating effectively
and
f. 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.
DISCLOSURES
Independent Directors have met all the criteria of an independent
Director and they have given a declaration to the effect that they have
met all the criteria of an independent director as prescribed in
Section 149 of the Companies Act, 2013 and the Listing agreement
entered with the Stock exchanges.
The Nomination and Remuneration Policy is enclosed to this annual
report.
Directors are eligible to get only sitting fee for attending the Board
or Committee or other meetings as approved by the Board of Directors.
Outstation directors are entitled to get reimbursement of out of pocket
expenses incurred by them in connection with attending of the Board or
Committee or other meetings.
Company has not provided any loans, guarantees, security, investments
under Section 186 of the Companies Act, 2013 during the year under
review.
All the transactions entered by the Company during the financial year
with the related parties are in the ordinary course of business and at
Arms length. The details of material related party transactions are
given in form AOC -2 as annexure 3 to this report.
There is no material changes and commitments which have occurred
between the end of the financial year and to the date of the report
which affects the financial position of the Company.
(A) Conservation of Energy -
i. the steps taken or impact of The Company is continuously investing
in energy conservation of energy
conservation measures such as
replacement of old motors
with new high efficiency motors,
replacement of old lights with new
power saving LED lights and also
following energy saving work methods.
ii. the steps taken by the
Company for Company has installed 26.425 MW
of windmills to utilizing alternate
source of energy generate green
energy. It also purchases bio mass
power from third parties to meet the
shortages during the period of power
cut.
iii. the Capital investment
on energy Rs.1.32 Lakhs
conservation equipments
(B) Technology absorption
i. Efforts made towards technology
absorption. : --
ii. Benefits derived like product
improvement, cost reduction, product
development, import substitution, etc., : --
iii. In case of imported technology
(imported during the last
3 years reckoned from the beginning of
the financial year) : --
(a) Details of technology imported. : --
(b) Year of import.
(c) Whether the technology been
fully absorbed-
(d) If not fully absorbed, areas where
this has not taken place, reasons there for
and future plans of action.
iv. The expenditure incurred on Research
and Development. : --
(C) Foreign Exchange Earnings and out go
The Foreign Exchange earnings and outgo
during the year under review
were as follows:
Foreign Exchange Earned : Rs. 221.60 Lakhs
Foreign Exchange Outgo :
Capital goods imports (including
advances) : Rs. 368.12 Lakhs
Raw Material imports : Rs. 494.24 Lakhs
Stores and Spares imports (including
advances) : Rs. 67.47 Lakhs
Others : Rs. 4.21 Lakhs
Total : Rs. 934.04 Lakhs
RISK MANAGEMENT
The Company has constituted a Risk Management Committee and also
adopted the risk management policy. The Company has established a risk
management frame work to identify, evaluate the business risks and
opportunities. The main object of the framework is to minimise the
adverse impact of the risks by taking effective mitigating measures to
retain the business advantages. The identified risks and mitigation
measures are reviewed by the Risk Management Committee and all the
risks identified and mitigation measures will be placed before the
Board. Board is of the opinion that there is no risk which affects the
existence of the Company.
CSR ACTIVITIES
The CSR Committee consists of three directors out of which two are
independent directors. The Board has approved the CSR Policy and the
same is posted in the website of the Company. The Company has spent the
full eligible amount during the financial year. Annual Report on CSR
activities is annexed as annexure 4 to this report.
DISCLOSURES
Pursuant to the provisions of the Companies Act, 2013 and clause 49 of
the Listing Agreement entered with the stock exchanges, the Board has
carried out annual evaluation of its own performance, that of
committees and individual directors for the financial year 2014-15.
There is no change in the nature of business. The following persons are
named as Key Managerial Personnel Sri. N.R. Selvaraj (Wholetime
Director), Sri. S. Ravindran, Chief Financial Officer and Sri. S.K.
Radhakrishnan, Company Secretary and there is no change in the Key
Managerial Personnel. Smt. Vijayalakshmi Narendra has been appointed
as an additional director and she holds office up to the date of
ensuing Annual General Meeting. A resolution for appointing her as an
independent director is being placed before the shareholders for
approval at the ensuing Annual General Meeting.
There is no addition or cessation of Subsidiaries, Joint ventures or
Associates during the year. The Company has not accepted or holds any
deposit from the public or directors or shareholders. There is no
significant material orders passed by the regulators or courts or
tribunals which affects the going concern status or operations in
future.
The Company has established adequate internal control system which is
commensurate with its nature and volume of operations. All the
independent directors are in the first term of appointment. There is no
resignation of the Director during the year 2014 - 15.
The Composition of the Audit committee is given in the Corporate
Governance Report. Board has accepted all the recommendations made by
the Audit Committee during the year 2014-15.
Particulars pursuant to section 197(12) and the relevant rules are
given in the annexure 5 to this report.
VIGIL MECHANISM
The Company has established vigil mechanism and adopted whistle blower
policy which protects persons who uses the mechanism from victimization
and allows direct access to the Chairman of the Audit Committee if
required. The Policy is posted in the website of the Company.
NOMINATION AND REMUNERATION POLICY
Based on the recommendation of the Nomination and Remuneration
Committee, the Board has approved the Nomination and Remuneration
Policy of the Company for selection and appointment of Directors and
Senior Management Personnel, their remuneration, policy on succession
plans, Board diversity and the same is enclosed as annexure 6 to this
report.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
In terms of Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 the Company has no employee drawing
salary exceeding Rs. 60.00 Lakhs per annum or Rs. 5.00 Lakhs per month
during the year under review.
Company is not paying any commission to the Directors and Wholetime
Director.
DISCLOSURES UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Company has not received any complaint under the Sexual Harrassment of
women at work place (Prevention, Prohibition and Redressal) Act, 2013
during the year 2014-15.
ADDITIONAL DISCLOSURES
In line with the requirement of Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, A certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
GENERAL
The Directors place on record their sincere thanks to all the
Principals for their whole hearted co-operation and to the bankers of
the Company for their financial assistance. Directors also wish to
thank the customers for their support and confidence reposed in the
Company and to the employees at all levels for their co-operation and
dedication.
By Order of the Board
Coimbatore SANJAY JAYAVARTHANAVELU
20th May, 2015 Chairman
Mar 31, 2014
Dear members,
The Directors have pleasure in presenting the 32nd Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2014.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2013 14 2012 13
Particulars (Rs. in Lakhs) (Rs. in Lakhs)
Income from operations 21803.82 18684.04
Other Income 549.60 373.90
Profit before Interest and Depreciation 4851.61 4987.92
Less: Interest 945.03 1206.97
Profit/(Loss) before Depreciation 3906.58 3780.95
Less: Depreciation 1935.90 1942.61
Profit/(Loss) before Tax 1970.68 1838.34
Add/(Less): Provision for Taxes 281.84 785.49
Profit/(Loss) after Tax 1688.84 1052.85
Add: Balance in Profit & Loss Account 1849.68 1386.67
Balance Available for Appropriation 3538.52 2439.52
Appropriation:
Proposed Dividend 76.79 76.79
Tax on Dividend 13.05 13.05
Transferred to General Reserve 1000.00 500.00
Surplus in Profit & Loss
Account Carried
over to Balance Sheet 2448.68 1849.68
DIVIDEND
Your Directors recommend, payment of dividend of Rs. 2.50 /- per equity
share of Rs.10/- each for the financial year ended 31st March, 2014,
which if approved at the forthcoming Annual General Meeting, will be
paid to those equity shareholders whose names appear in the Register of
Members as on 27th August, 2014 in respect of shares held in physical
form and in respect of shares held in dematerialized form, the dividend
shall be paid on the basis of beneficial ownership as per the details
furnished by the Depositories for this purpose at the end of business
hours on 22nd August, 2014
SEGMENT WISE PERFORMANCE
Agency Division
The growth of the division is moderate during 2013-14 compared to
previous year. The substantial increase in import of yarn by China
helped the spinning mills to improve their performance. Hence the order
flow and off take of machinery by the mills have increased. This
division earned a PBT of Rs. 1382.71 Lakhs compared to Rs. 1114.52
Lakhs during the previous year.
Textile Division
The cotton prices were highly volatile in view of higher exports to the
tune of 110 lakh bales during the cotton year 2012-13. But yarn prices
were stable and reasonably remunerative. This division earned a PBT of
Rs. 633.62 Lakhs compared to Rs.334.88 Lakhs during the previous year.
Wind Energy Division
The Government of Tamilnadu has entered in to long term arrangement
with private power generation companies to manage the power shortage.
In view of this the power generated from the windmills was not fully
evacuated by the TAnGeDCO. This affected the profitability of this
division. Moreover TANGEDCO has levied higher transmission and
operation and maintenance charges for the wind power wheeled to the
industries for captive consumption.
This division could achieve a PBT of Rs. 299.61 Lakhs during the year
compared to Rs.646.75 Lakhs in the previous year.
Engineering Division
This division has started taking up the manufacturing of gear boxes in
addition to the gears. The sales of the division have improved during
the year under review. But higher operational costs resulted in a loss
of Rs. 366.63 Lakhs.
EXPORTS
The Company''s exports including the supplies to merchant exporters was
Rs. 585.22 Lakhs (Previous year Rs. 1268.21 Lakhs) during the year
under review.
PROSPECTS
The US and European economies are emerging out of recession and hence
exports of textile goods are expected to grow reasonably well during
the year 2014-15. Though the monsoon is predicted to be lower than
average due to the EL NINO effect, the cotton production is estimated
to be normal. The change in the cotton stock piling policy of China may
result in lower exports to that country. Therefore the prices of cotton
is expected to be stable. In view of these positive factors,
performance of the Company is expected to be better.
DIRECTORS
Sri.R.Satagopan was inducted into the Board of the Company on
25.10.2004. Sri.R.Satagopan, with his in- depth knowledge in the fields
of Corporate planning, Performance review and insurance guided the
Board of Directors and the Company in all its functions. He has retired
at the last Annual General Meeting and not opted for reappointment.
The Board records its appreciation of his valuable contribution for the
development and growth of the Company during his tenure.
Sri.J.Raghupathy and Sri.S.Venkataraman Directors were appointed under
the Companies Act, 1956 and they are liable to retire by rotation. But
as per the provisions of section 149 of the Companies Act, 2013,
independent directors are not liable to retire by rotation and can hold
office for a period of five years. A notice proposing their
candidatures for the Directorship is received from a shareholder.
Necessary resolutions will be placed at the ensuing Annual General
Meeting for appointing them as independent directors of the Company.
Sri.S.K.Najmul Hussain was appointed as Additional Director of the
Company with effect from 20.01.2014 and will hold office up to the date
of the ensuing Annual General Meeting. A notice proposing his
candidature for the Directorship is received from a shareholder.
Necessary resolution will be placed at the ensuing Annual General
Meeting for appointing him as Independent Director of the Company.
FIXED DEPOSITS
There is no deposit remaining unclaimed at the end of the financial
year 2013-14. The Company has complied with all the provisions of
Section 58A of the Companies Act, 1956 and Rules made there under with
regard to acceptance of Deposits.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the
co-operation extended by the employees.
LISTING
Your Company''s shares are listed in Bombay Stock Exchange Limited and
Madras Stock Exchange Limited. The listing fee has been duly paid.
AUDITORS
M/s. S. Krishnamoorthy & Co., Chartered Accountants, the retiring
auditors have given the certificate pursuant to Section 141 of the
Companies Act, 2013 and are eligible for re-appointment.
COST AUDIT REPORT
The cost Audit report for the year 2012-13 has been filed on 9th
September, 2013 and the same was filed within the due date.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
In terms of sub-section (2A) of Section 217 of the Companies Act, 1956,
the Company has no employee drawing salary exceeding Rs. 60.00 Lakhs
per annum or Rs. 5.00 Lakhs per month during the year under review.
Energy consumption particulars as required by Rule 2 of the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure I attached.
Technology absorption particulars as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure II attached.
ADDITIONAL DISCLOSURES
In line with the requirement of Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, a certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors of your Company confirm that:
* all applicable Accounting Standards have been followed in the
preparation of annual accounts and that there is no material departure;
* such accounting policies have been selected and applied consistently
and such judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
at March 31, 2014 and of the profit of the Company for the year ended
on that date;
* proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act 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.
GENERAL
The Directors place on record their sincere thanks to all the
Principals for the whole hearted co-operation and to the bankers of the
Company for their financial assistance. Directors also wish to thank
the customers for their support and confidence reposed in the Company
and to the employees at all levels for their co-operation and
dedication.
By Order of the Board
Coimbatore SANJAY JAYAVARTHANAVELU
28th May, 2014 Chairman
Mar 31, 2013
The Directors have pleasure in presenting the 31st Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2013.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2012-13 2011-12
Particulars (Rs. in Lakhs) (Rs. in Lakhs)
Income from operations 18684.04 14469.19
Other Income 373.90 317.79
Profit before Interest and Depreciation 4987.92 917.93
Less: Interest 1206.97 1243.04
Profit/(Loss) before Depreciation 3780.95 (325.11)
Less: Depreciation 1942.61 1783.46
Profit/(Loss) before Tax 1838.34 (2108.57)
Add/(Less): Provision for Taxes 785.49 (692.90)
Profit/(Loss) after Tax 1052.85 (1415.32)
Add: Balance in Profit & Loss Account 1386.67 2801.99
Balance Available for Appropriation 2439.52 1386.67
Appropriation:
Proposed Dividend 76.79 Nil
Tax on Dividend 13.05 Nil
Transferred to General Reserve 500.00 Nil
Surplus in Profit & Loss
Account Carried
over to Balance Sheet 1849.68 1386.67
DIVIDEND
Your Directors recommend, payment of dividend of Rs. 2.50 per equity
share of Rs.10/- each for the financial year ended 31st March, 2013,
which if approved at the forthcoming Annual General Meeting, will be
paid to those equity shareholders whose names appear in the Register of
Members as on 8th August, 2013 in respect of shares held in physical
form and in respect of shares held in dematerialized form, the dividend
shall be paid on the basis of beneficial ownership as per the details
furnished by the Depositories for this purpose at the end of business
hours on 31st July, 2013.
SEGMENT WISE PERFORMANCE
Agency Division
The liquidity constrains of the spinning mills due to heavy losses
incurred during the previous financial year were not fully overcome
during the year under review inspite of better performance. Hence the
mills could not re-commence their normal modernization and expansion
programmes yet.
The off take of machinery was slow and hence our agency division could
achieve a turnover of Rs. 1579.07 lakhs only during the year.
This division earned a PBT of Rs. 1114.52 Lakhs.
Textile Division
The stabilisation of cotton and yarn prices provided some respite to
the spinning mills during the year. There was a moderate improvement in
the workings and the division has achieved a turn over of Rs 14255.58
Lakhs and PBT of Rs. 334.88 Lakhs.
Wind Mill Division
This division has done extremely well with highest generation of wind
power during the year under review. However due to frequent and long
hours of shutdowns, the power generated by the wind mills could not be
fully consumed at our spinning mills and hence unutilized banked power
has been billed to TANGEDCO at a lower rate of Rs. 2.75 per unit. This
affected the turnover and profits of the division which otherwise would
have been much better. This division has achieved a turnover of Rs.
1803.88 Lakhs and a PBT of Rs. 646.76 Lakhs.
Engineering Division
The performance of the division has improved from the last quarter of
the year. During the year under review this division has incurred a
loss of Rs. 354.61 Lakhs.
EXPORTS
The Company''s exports including the supplies to merchant exporters was
Rs. 1268.21 Lakhs (Previous year Rs. 1174.89 Lakhs) during the year
under review.
PROSPECTS
The cotton prices are comparatively stable. Though yarn prices have
come down sharply, it is expected to improve from the second quarter of
the current year. The power supply position will be better till
October, 2013 in view of the support from windmills during the season.
The spinning mills are slowly returning to the normal working and hence
the modernization and expansion activities are expected to improve. The
Engineering division will also improve its performance during the
current year. Considering the above facts the performance of the
company is expected to be good during the current year.
DIRECTORS
Sri. J. Raghupathy and Sri. R. Satagopan, Directors, retire by rotation
at the ensuing Annual General Meeting. Being eligible, Sri. J.
Raghupathy offers himself for re-appointment. However Sri. R. Satagopan
does not opt for re-appointment.
Sri. R. Venkatrangappan was inducted into the Board of our Company on
9th September, 1983. Then on 25th November, 1989 he was elected as
Chairman of the board succeeding Late Sri. G.Devarajan.
Sri. R. Venkatrangappan, with his in-depth administrative knowledge and
professional expertise gained through years of varied work in public
sector, guided the Board of Directors and the Company in all functional
domains. He was instrumental in developing a good customer base for the
agency division.
The Board records its appreciation of his distinguished and dedicated
guidance and valuable contribution for the development and growth of
the Company during his tenure of more than 29 years.
Sri. C. B. Kariappa, was inducted into the Board of the Company on 30th
June,1989. Sri. C. B. Kariappa, with his in-depth knowledge in the
fields of HR, Corporate planning, industrial relation and insurance,
guided the Board of Directors and the Company in all its functions.
The Board records its appreciation of his valuable contribution for the
development and growth of the Company during his tenure of more than 23
years.
Sri. N. R. Selvaraj and Sri. S. Venkataraman were appointed as
Additional Directors of the company with effect from 29.10.2012 will
hold office up to the ensuing Annual General Meeting. A notice
proposing their candidatures for the Directorship have been received
from shareholders. Necessary resolutions will be placed at the ensuing
Annual General Meeting.
FIXED DEPOSITS
There is no deposit remaining unclaimed at the end of the financial
year 2012-13. The Company has complied with all the provisions of
Section 58A of the Companies Act, 1956 and Rules made there under with
regard to acceptance of Deposits.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the
co-operation extended by the employees.
LISTING
Your Company''s shares are listed in Bombay Stock Exchange Limited and
Madras Stock Exchange Limited. The listing fee has been duly paid.
AUDITORS
M/s. S. Krishnamoorthy & Co., Chartered Accountants, the retiring
auditors have given the certificate pursuant to Section 224(1B) of the
Companies Act, 1956 and are eligible for re-appointment.
COST AUDITOR
Pursuant to the directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, Sri. G.
Sivagurunathan, Cost Auditor has been appointed to conduct Cost Audit
relating to the Textile and Engineering Divisions for the financial
year 2012-13.
The cost Audit report for the year 2011- 12 has been filed on 8th
January, 2013 and the same was filed within the due date.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
In terms of sub-section (2A) of Section 217 of the Companies Act, 1956,
the Company has no employee drawing salary exceeding Rs. 60.00 Lakhs
per annum or Rs. 5.00 Lakhs per month during the year under review.
Energy consumption particulars as required by Rule 2 of the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure I attached.
Technology absorption particulars as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure II attached.
FOREIGN EXCHANGE EARNINGS AND OUT GO
The Foreign Exchange earnings and outgo during the year under review
were as follows:
Foreign Exchange Earned : Rs. 54.58 Lakhs
Foreign Exchange Outgo : Rs. 505.32 Lakhs
Foreign currency Term loan Repayment : Rs. 138.93 Lakhs
Capital goods imports (including advances) : Rs. 166.02 Lakhs
Foreign currency Term loan interest payment : Rs. 7.41 Lakhs
Raw Material imports : Rs. 132.12 Lakhs
Stores and Spares imports (including advances) : Rs. 52.81 Lakhs
Others : Rs. 8.03 Lakhs
ADDITIONAL DISCLOSURES
In line with the requirement of Listing Agreement entered with the
Stock Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, A certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors of your Company confirm that:
- all applicable Accounting Standards have been followed in the
preparation of annual accounts and that there is no material departure;
- such accounting policies have been selected and applied consistently
and such judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
at March 31, 2013 and of the profit of the Company for the year ended
on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act 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.
GENERAL
The Directors place on record their sincere thanks to all the
Principals for the whole hearted co-operation and to the bankers of the
Company for their financial assistance. Directors also wish to thank
the customers for their support and confidence reposed in the Company
and to the employees at all levels for their co-operation and
dedication.
By Order of the Board
Coimbatore SANJAY JAYAVARTHANAVELU
22nd May, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 30th Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2012.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2011-12 2010-11
(Rs. in Lakhs) (Rs. in Lakhs)
Turnover 12805.72 16389.70
Commission Receipts 1278.98 1152.34
Other Income 689.19 591.50
Profit before Interest and Depreciation 917.92 5351.35
Less: Interest 1243.04 636.43
Profit/(Loss) before Depreciation (325.12) 4714.92
Less: Depreciation 1783.45 1408.17
Profit/(Loss) before Tax (2108.57) 3306.75
Add/(Less): Provision for Current Taxes -- (654.00)
Add/(Less): Provision for Deferred Taxes 692.89 (511.42)
Add: Excess provision for Tax
Reversed/ Refund 0.36 2.29
Profit/(Loss) after Tax (1415.32) 2143.62
Add: Balance in statement of Profit & Loss 2801.99 2016.53
Balance Available for Appropriation 1386.67 4160.15
Appropriation:
Proposed Dividend Nil 307.15
Tax on Dividend Nil 51.01
Transferred to General Reserve Nil 1000.00
Surplus in statement of Profit & Loss
carried over to Balance Sheet 1386.67 2801.99
DIVIDEND
In view of the loss incurred by the Company during the year under
review, Board of directors has not recommended any dividend for the
financial year 2011-12.
SEGMENT WISE PERFORMANCE:
Agency Division
During the last year by expecting further upward movement in the cotton
prices mills stored the cotton up to next season. But substantial fall
in the prices of cotton and corresponding slide in the yarn prices
during the first quarter of 2011-12 resulted in heavy losses to the
spinning mills. Due to this the Companies shelved their modernization
programmes. However as some of the new projects have been implemented,
the division has moderate improvement in its performance.
This division earned a PBT of Rs. 1205.06 Lakhs, an increase of 11.40%
over the previous year.
Textile Division
Increase in labour cost, higher power cuts, slow movement of yarn and
sudden fall in the cotton prices which were purchased at higher cost
and corresponding downfall in the yarn prices have severely affected
the performance of this division.
The textile division of the Company incurred a loss of Rs. 3144.21
Lakhs during the year under review compared to profit of Rs. 2146.76
Lakhs in the previous year.
Wind Energy Division
The performance of the Wind Energy Division has been affected by low
velocity of the wind, unscheduled shut down in drawal and high interest
costs during the financial year under review. This division has earned
a PBT of Rs. 58.95 Lakhs during the year under review compared to Rs.
433.72 Lakhs in the previous year.
Engineering Division
Due to lower off take of gears by the capital goods industries and
increase in power cut have affected the performance of this division.
During the year this division has commenced supplies to some new
customers.
During the year under review this division has incurred a loss of Rs.
303.49 Lakhs as against a loss of Rs. 292.26 Lakhs in the previous
year.
EXPORTS
The Company's exports include the supplies to merchant exporters to the
tune of Rs. 1174.89 Lakhs (Previous year Rs. 2298.50 Lakhs).
PROSPECTS
Volatility in cotton price, higher fuel and power cost, labour shortage
coupled with increase in interest cost, sluggish movement of yarn etc.,
may affect the growth of the textile sector. This may affect the
performance of both the agency and textile divisions.
In order to meet the shortfall between the requirement and availability
of power, it is reported that the Government is taking all measures to
utilize the full generation of wind power by establishing the
infrastructure for better grid availability. If these facilities are in
place with better velocity of the wind, the wind energy division is
expected to perform better.
Performance of the Gears unit is expected to improve during the current
year.
DIRECTORS
Sri. Ravi Sam and Sri. Sanjay Jayavarthanavelu, Directors, retire by
rotation at the ensuing Annual General Meeting, being eligible, offer
themselves for re-appointment.
FIXED DEPOSITS
There is no deposit remaining unclaimed at the end of the financial
year 2011-12. The Company has complied with all the provisions of
Section 58A of the Companies Act, 1956 and Rules made there under with
regard to acceptance of Deposits.
INDUSTRIAL RELATIONS
Industrial relations are cordial and your Directors appreciate the
o-operation extended by the employees.
LISTING
Your Company's shares are listed in Bombay Stock Exchange Limited and
Madras Stock Exchange Limited. The listing fee has been duly paid.
AUDITORS
M/s. S. Krishnamoorthy & Co., Chartered Accountants, the retiring
auditors have given the certificate pursuant to Section 224(1B) of the
Companies Act, 1956 and are eligible for re-appointment.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, Sri. R.
Krishnan, Cost Auditor has been appointed to conduct Cost Audit
relating to the Textile Division for the financial year 2011-12.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
In terms of sub-section (2A) of Section 217 of the Companies Act, 1956,
the Company has no employee drawing salary exceeding Rs. 60.00 Lakhs
per annum or Rs. 5.00 Lakhs per month during the year under review.
Energy consumption particulars as required by Rule 2 of the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure I attached.
Technology absorption particulars as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure II attached.
FOREIGN EXCHANGE EARNINGS AND OUT GO
The Foreign Exchange earnings and outgo during the year under review
were as follows:
Foreign Exchange Earned : Rs. 130.75 Lakhs
Foreign Exchange Outgo : Rs. 1385.15 Lakhs
Foreign currency Term loan Repayment : Rs. 219.44 Lakhs
Capital goods imports (including advances) : Rs. 1078.30 Lakhs
Foreign currency Term loan interest payment : Rs. 19.66 Lakhs
Raw Material imports : Rs. 34.76 Lakhs
Stores and Spares imports (including advances) : Rs. 32.03 Lakhs
Others : Rs. 0.96 Lakhs
ADDITIONAL DISCLOSURES:
In line with the requirement of Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, a certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors of your Company confirm that:
- all applicable Accounting Standards have been followed in the
preparation of annual accounts and that there is no material departure;
- such accounting policies have been selected and applied consistently
and such judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
at March 31, 2012 and of the loss of the Company for the year ended on
that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act 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.
GENERAL
The Directors place on record their sincere thanks to the Principals
for the whole hearted co-operation and to the bankers of the Company
for their financial assistance. Directors also wish to thank the
customers for their support and confidence reposed in the Company and
to the employees at all levels for their co-operation and dedication.
By Order of the Board
Coimbatore R. VENKATRANGAPPAN
23rd May, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the 29"' Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2011.
FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2010-11 2009-10
(Rs. in Millions) (Rs. in Millions)
Turnover 1638.97 1188.37
Commission Receipts 115.23 81.01
Other Operating Income 29.55 14.68
Other Income 29.60 28.68
Profit before Interest and Depreciation 534.20 415.08
Less: Interest 63.64 45.81
Profit before Depreciation 470.56 369.27
Less: Depreciation 140.82 110.77
Profit before Tax 329.74 258.50
Less: Provision for Current Taxes 65.40 53.20
Less: Provision for Deferred Taxes 51.14 21.43
Profit after Tax 213.20 183.87
Add: Balance in Profit & Loss Account 201.65 156.78
Add: Prior year income 1.16 0.06
Less: Prior year expenses 0.22 1.40
Add: Excess provision for Tax
Reversed/
Refund à 0.12
Add / (Less): Prior year taxes 0.23 (1.84)
Balance Available for Appropriation 416.02 337.59
Appropriation:
Proposed Dividend 30.72 30.72
Tax on Dividend 5.10 5.22
Transferred to General Reserve 100.00 100.00
Surplus in Profit & Loss Account Carried 280.20 201.65
over Balance Sheet
DIVIDEND
Your Directors recommend payment of dividend of Rs. 10 /- per equity
share of Rs. 10/- each for the financial year ended 31st March, 2011,
which if approved at the forthcoming Annual General Meeting will be
paid to those equity shareholders whose names appear in the Register of
Members as on 11th August, 2011 in respect of shares held in physical
form and in respect of shares held in dematerialized form, the dividend
shall be paid on the basis of beneficial ownership as per the details
furnished by the Depositories for this purpose at the end of business
hours on 1sl August, 2011.
PERFORMANCE
Agency Division
The uptrend started in the financial year 2009-10 has continued
throughout the financial year 2010-11. The yarn price realisation was
better in the year which helped the spinning mills to continue their
expansion and modernization programmes. This in turn improved the sales
of the Textile Machineries of our principals.
This division has started a training center at Guntur, Andhra Pradesh
to provide training to the technical personnel of the mills for
effective utilization of the machines.
This division earned a PBT of Rs. 108.17 Millions, an increase of
62.92% over the previous year.
TEXTILE DIVISION
The good demand for the yarn has helped this division to post
impressive results in spite of the unprecedented high cotton cost
during the year under review. Both turn over and profits have gone up
to record levels.
The textile division of the Company earned a PBT of Rs. 214.67 Millions
during the year under review compared to Rs. 152.68 Millions in the
previous year.
WIND MILL DIVISION
Your Company has replaced 12 numbers of old Wind Energy Generators
(WEG) with new machines for better generation and to reduce the
maintenance cost at our wind farms at Kammalapatti and Vadavedampatti
villages at an investment of Rs. 203.70 Millions during the year under
review. The present total installed capacity of this division is 27.025
MW.
The wind energy division has performed well in the financial year under
review due to better wind and better grid availability and this
division has earned a PBT of Rs. 43.37 Millions during the year under
review compared to Rs. 40.76 Millions in the previous year..
ENGINEERING DIVISION
The Gears unit has started its operations from July, 2010 onwards and
operations were stabilized in the last quarter of the year under
review. Some more machines will be imported for this unit during the
current year to increase the production.
During the year under review the unit has incurred a loss of Rs. 29.23
Millions.
EXPORTS
The Company's exports include the supplies to merchant exporters to the
tune of Rs. 217.78 Millions (Previous year Rs. 119.79 Millions).
PROSPECTS
Better Yarn price realisation, in spite of increase in the cotton
prices, helped the entire textile industry to earn good profits during
the year under review.
Sudden fall in the cotton prices reflected in the yarn price
realisation also. There is a glut in the yarn market and the movement
of yarn is very poor. Higher cost of power, employees cost and the
lower yarn prices are expected to reverse the trend and the prospects
for the current year are not promising.
This may affect the performance of the textile division as well as the
agency division substantially in the coming months.
To meet the increase in the requirement of power by the industries,
Government is taking all measures to utilize the full generation of
wind power by establishing the infrastructure for better grid
availability. The wind energy division is expected to continue its
better performance.
Gears unit is expected to improve its performance during the current
year.
DIRECTORS
Sri. R. Satagopan and Sri. R. Venkatrangappan, Directors, retire by
rotation at the ensuing Annual General Meeting, being eligible, offer
themselves for re-appointment.
FIXED DEPOSITS
There is no deposit remaining unclaimed at the end of the financial
year 2010-11. The Company has complied with all the provisions of
Section 58Aof the Companies Act, 1956 and Rules made there under with
regard to acceptance of Deposits.
INDUSTRIAL RELATIONS
Industrial relations are cordial in all the units and your Directors
appreciate the co-operation extended by the employees.
LISTING
Your Company's shares are listed in Bombay Stock Exchange Limited and
the listing fee has been duly paid.
Madras Stock Exchange Ltd (MSE) has approached the Company and informed
that they are taking steps for restarting the trading facilities and
they have also informed that MSE has entered into a Strategic
arrangement with the National Stock Exchange of India in terms of which
the members of the MSE are allowed to trade in the National Stock
Exchange platform. The continuous listing in MSE will add liquidity to
our shares which is beneficial to our shareholders. Therefore we wish
to continue the listing with Madras Stock Exchange Limited in order to
extend the facility to the shareholders. It is proposed to seek
approval of the shareholders in this regard in the ensuing Annual
General Meeting.
AUDITORS
M/s. S. Krishnamoorthy & Co., Chartered Accountants, the retiring
auditors have given the certificate pursuant to Section 224(1 B) of the
Companies Act, 1956 and are eligible for re-appointment.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, Sri. R.
Krishnan, Cost Auditor has been appointed to conduct Cost Audit
relating to the Textile Division for the financial year 2011 -12.
INFORMATION PURSUANT TO SECTION 2170F THE COMPANIES ACT, 1956
In terms of sub-section (2A) of Section 217 of the Companies Act, 1956,
the Company has no employee drawing salary exceeding Rs. 60.00 Lakhs
per annum or Rs. 5.00 Lakhs per month during the year under review.
Energy consumption particulars as required by Rule 2 of the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure I attached.
Technology absorption particulars as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure II attached.
FOREIGN EXCHANGE EARNINGS AND OUT GO
The Foreign Exchange earnings and outgo during the year under review
were as follows:
Foreign Exchange Earned: Rs. 5.83 Millions
Foreign Exchange Outgo: Rs. 143.19 Millions
Foreign currencyTerm loan Repayment : Rs. 15.20 Millions
Capital goods imports (including advances) : Rs. 72.91 Millions
Foreign currencyTerm loan interest payment : Rs. 2.70 Millions
Raw Material imports : Rs. 46.86 Millions
Stores and Spares imports (including advances) : Rs. 5.45 Millions
Others : Rs. 0.07 Millions
ADDITIONAL DISCLOSURES:
In line with the requirement of Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, a certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
DIRECTORS" RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors of your Company confirm that:
- all applicable Accounting Standards have been followed in the
preparation of annual accounts and that there is no material departure;
- such accounting policies have been selected and applied consistently
and such judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
at March 31,2011 and of the profit of the Company for the year ended on
that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act 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.
GENERAL
The Directors place on record their sincere thanks to the Principals
M/s. Lakshmi Machine Works Limited for the whole hearted co-operation
and to the bankers of the Company for their financial assistance.
Directors also wish to thank the customers for their support and
confidence reposed in the Company and to the employees at all levels
for their co-operation and dedication.
By Order of the Board
Coimbatore (Sd.) R. VENKATRANGAPPAN
20th May, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 28th Annual Report of
the Company together with audited accounts of the Company for the
financial year ended 31st March, 2010. FINANCIAL RESULTS
Financial results for the year under review are summarized below:
2009-10 2008-09
(Rs. in Millions)
Turnover 1190.70 925.08
Commission Receipts 81.01 103.96
Other Income 41.03 31.77
Profit before Interest and Depreciation 415.08 197.39
Less: Interest 45.81 60.12
Profit before Depreciation 369.27 137.27
Less: Depreciation 110.77 127.10
Profit before Tax 258.50 10.17
Less: Provision for Current Tax 53.20 0.66
Less: Provision for Deferred Tax 21.43 2.76
Less: Provision for Fringe Benefit Tax - 0.35
Profit after Tax 183.87 6.40
Add: Balance in Profit and Loss Account 156.78 151.19
Add: Prior year income/Depreciation 0.06 0.80
Less: Prior year expenses 0.12 0.67
Add: Excess provision for Tax
Reversed/ Refund 0.01 2.31
Less: Prior year taxes 1.84 0.09
Balance Available for Appropriation 337.59 159.94
Appropriation:
Proposed Dividend 30.71 1.84
Tax on Dividend 5.22 0.31
Transferred to General Reserve 100.00 1.00
Surplus in Profit and Loss Account
Carried over to Balance Sheet 201.66 156.79
DIVIDEND
Your Directors recommend, payment of dividend of Rs. 10/- per equity
share of Rs.10/- each for the financial year ended 31s March, 2010,
which if approved at the forthcoming Annual General Meeting, will be
paid to those equity shareholders whose names appear in the Register of
Members as on 28" July, 2010 in respect of shares held in physical
form and in respect of shares held in dematerialized form, the dividend
shall be paid on the basis of beneficial ownership as per the details
furnished by the Depositories for this purpose at the end of business
hours on 15" July, 2010.
PERFORMANCE
Agency Division
The effect of the global meltdown has continued up to first half of the
financial year under review which reduced the off-take of the
machineries by the spinning mills. The situation has improved slightly
in the second half due to better yarn prices. This helped the mills to
restart their expansion and modernization programmes which were shelved
due to global down turn of the textile industry during the previous
financial year. This division has performed better in the second half
of the financial year under review.
The principals have decided to market the CNC Machines manufactured by
it directly. Consequently the agency arrangement which expired on 30"1
September, 2009 for marketing of the CNC machines has not been renewed.
This division earned a PBT of Rs. 66.40 Millions, a decline of 28.10%
over the previous year.
Textile Division
During the first half of the financial year the yarn prices were ruling
lower and the cotton prices were steady. However in the second half
the demand for yarn picked up and the prices have improved
considerably. In spite of the higher cotton prices throughout the
period, the mills were able to make better yarn price realization.
The textile division of the Company earned an EBIDTA of Rs. 286.71
Millions during the year under review compared to Rs. 32.92 Millions in
the previous year.
Wind Mill Division
Your Company has installed two more 1500 KW Wind Energy Generators
(WEG) which have commenced generation during the fag end of March,
2010. The present total installed capacity of this division is 27.50
MW. The full benefit of these two new WEGs will be available during
2010 -11. The wind Energy division has performed well in the financial
year under review due to better wind and better grid availability and
this division has earned a PBT of Rs. 40.76 Millions.
EXPORTS
The Companys exports include the supplies to the units situated in the
special economic zones of Rs. 23.25 Millions (Previous year Rs. 29.47
Millions) and the merchant export of Rs. 119.79 Millions (Previous year
Rs. 32.16Millions).
The Company used this opportunity of better price realization to its
advantage by concentrating on the domestic market.
PROSPECTS
Good demand for the yarn and better yarn prices will help the industry
in general to continue its better performance. However the reduction of
the incentives for the export of yarn may increase the competition in
the domestic market. Severe power cut, increase in the fuel prices,
shortage of labour and increase in the employee cost may result in
lower margins. This may affect the performance of the textile division
as well as the agency division to some extent.
The wind energy division is expected to perform better. The gear
manufacturing unit will commence its operation from July, 2010 onwards
which will also contribute to the overall turnover and profitability of
the Company.
DIRECTORS
Sri. CBKariappaandSri. J Raghupathy, Directors, retire by rotation at
the ensuing Annual General Meeting, being eligible, offer themselves
for re-appointment.
FIXED DEPOSITS
There is no deposit remaining unclaimed at the end of the financial
year 2009 - 10. The Company has complied with all the provisions of
Section 58A of the Companies Act, 1956 and the Rules made there under
with regard to acceptance of Deposits.
INDUSTRIAL RELATIONS
Industrial relations are cordial in all the units and your Directors
appreciate the co-operation extended by the employees.
LISTING
Your Companys shares are listed in Bombay Stock Exchange Limited and
the listing fees have been duly paid. Company has filed application for
delisting of its shares from Madras Stock Exchange Limited based on the
resolution passed at the last Annual general meeting. Confirmation for
delisting of shares is awaited.
AUDITORS
M/s. S. Krishnamoorthy & Co., Chartered Accountants, the retiring
auditors have given the certificate pursuant to Section 224(1 B) of the
Companies Act, 1956 and are eligible for re-appointment.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, Sri. R.
Krishnan, Cost Auditor has been appointed to conduct Cost Audit
relating to the Textile Division for the financial year 2010 -11.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
In terms of sub-section (2A) of Section 217 of the Companies Act, 1956,
the Company has no employee drawing salary exceeding Rs. 24.00 Lakhs
per annum or Rs. 2.00 Lakhs per month during the year under review.
Energy consumption particulars as required by Rule 2 of the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure I attached.
Technology absorption particulars as required under the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are given in the Annexure II attached.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Foreign Exchange earnings and outgo during the year under review
were as follows:
Foreign Exchange Earned Rs.6.25 Millions
Foreign Exchange Outgo:
Foreign currency Term loan repayment Rs. 13.98 Millions
Foreign currency Term loan interest payment Rs. 0.38 Millions
Raw material imports Rs. 30.51 Millions
Stores and Spares imports Rs. 0.37 Millions
Capital goods imports Rs. 1.68 Millions
Total Rs. 46.92 Millions
ADDITIONAL DISCLOSURES:
In line with the requirement of Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Corporate
Governance Report, A certificate from the Auditors of the Company
regarding compliance of Corporate Governance and Related Party
disclosures are made part of the Annual Report.
A certificate from CEO/CFO, interalia, confirming the correctness of
the financial statements is also made part of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors of your Company confirm that:
all applicable Accounting Standards have been followed in the
preparation of annual accounts and that there is no material departure;
such accounting policies have been selected and applied consistently
and such judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
at March 31, 2010 and of the profit of the Company for the year ended
on that date;
proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act 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.
GENERAL
The Directors place on record their sincere thanks to the Principals
M/s. Lakshmi Machine Works Limited for the whole hearted co-operation
and to the bankers of the Company for their financial assistance.
Directors also wish to thank the customers for their support and
confidence reposed in the Company and to the employees at all levels
for their co-operation and dedication.
For and on behalf of the Board
Chennai (Sd.)R.VENKATRANGAPPAN
24th May, 2010 Chairman
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