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Bannari Amman Spinning Mills Directors Report, Bannari A Spg Reports by Directors
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Bannari Amman Spinning Mills

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Directors Report Year End : Mar '15    « Mar 14
Dear Members,
 
 The Directors have pleasure in presenting the 25th Annual Report
 together with audited accounts of the Company for the year ended 31st
 March, 2015.
 
 FINANCIAL RESULTS :                                   (Rs. in Lakhs)
 
                                                  2014-2015     2013-2014
 
 Profit before Depreciation                        4,580.63      8,105.12
 
 Less: Depreciation                                2,666.24      3,500.16
 
 Less : Taxes                                        631.75      1,448.15
 
 Less : Extra Ordinary Item (Net of Tax Expenses)         -             -
 
 Profit after Tax                                  1,282.64      3,156.81
 
 Surplus brought forward from last year            1,540.09        751.92
 
 Amount available for appropriation                2,822.73      3,908.73
 
 Appropriations:
 
 Provision for Equity Dividend                       236.31        315.09
 
 Provision for Tax on Dividend                        48.11         53.55
 
 Transfer to General Reserve                       1,000.00      2,000.00
 
 Surplus carried over to Balance Sheet             1,538.31      1,540.09
 
 Total                                             2,822.73      3,908.73
 
 DIVIDEND
 
 Your Directors are glad to recommend payment of dividend of Rs. 1.50/-
 per equity share of Rs. 10/- each to the equity shareholders (@ 15% of
 the paid up capital).
 
 REVIEW OF OPERATIONS
 
 The overall turnover of the Company has decreased by 2.50% in turnover
 as compared to the previous year, mainly due to lower off take of
 finished goods in the market. There is no change in the nature of
 Business of the Company.
 
 Spinning Division
 
 During the year under review, the Spinning Mills produced 22054.34
 tonnes (20700.32 tonnes) inclusive of purchased quantity 885.25 tonnes
 (1378.53 tonnes) of Yarn and sold 20818.38 tonnes (21050.40 tonnes) of
 Yarn.
 
 The sales include 11195.79 tonnes (10732.84 tonnes) by way of Export.
 The total sales of this division amounted to Rs. 48931.22 Lakhs (Rs.
 52366.13 Lakhs) of which export sales amounted to Rs. 25398.85 Lakhs
 (Rs.  25454.37 Lakhs) constituting 51.91% (48.60%) of the total sales.
 
 Weaving Division
 
 The Weaving Division specializes in manufacturing wider-width cotton
 fabric. During the year under review, 96.40 Lakh Metres (76.23 Lakh
 Metres) of Fabric were produced and 88.85 Lakh Metres (71.59 Lakh
 Metres) of Fabric were sold.
 
 Knitting Division
 
 During the year under review, 3176.25 tonnes (1672.42 tonnes) of
 Knitted fabric were produced and 3224.01 tonnes (1529.40) tonnes were
 sold. The total sales of this division amounts to Rs. 7367.93 Lakhs
 (Rs. 3640.95 lakhs) of which export sales amounted to Rs. 1370.13 Lakhs
 (Rs.  806.07 lakhs).
 
 Processing Division and Technical Textiles Division
 
 During the year under review, 768.54 tonnes (583.32 tonnes) of fabrics
 were processed and the total processing charges of this division
 amounts to Rs. 614.62 Lakhs (Rs. 464.13 lakhs).
 
 Garment Division
 
 During the year under review, 9.10 lakhs (7.46 lakhs) pieces of
 Garments were produced and sold 8.68 lakhs (7.09 lakhs) pieces. The
 total sales of this division amounts to Rs. 3572.56 lakhs (Rs. 3192.49
 lakhs) of which export sales amounted to Rs. 3533.38 lakhs (Rs. 3143.25
 lakhs).
 
 Wind Mill Division
 
 The company has 4 windmills of 1250 KW each totaling 5 MW in Radhapuram
 Taluk, Tirunelveli District, Tamilnadu, 25 Nos windmills, each of 800
 KW capacity totaling 20 MW capacity in Dharapuram Taluk, Tirupur
 District and Palani Taluk, Dindigul District, Tamilnadu and 3 Windmills
 of 1650 KW each in Kongalnagaram, Udumalpet Taluk, Tirupur District,
 Tamilnadu. The total installed capacity of Windmills is 29.95 MW and
 the whole of the power generated is captively consumed by the Spinning
 and Weaving Unit.
 
 The windmills produced 449.40 Lakh units of power as against 492.39
 Lakh units produced in the last year.
 
 PROSPECTS FOR THE CURRENT YEAR
 
 The parity between the cost of inputs and realization on finished
 products is expected to be favorable.  Installation of new machinery in
 value added divisions will increase business volume and profit margin.
 Overall performance of your company is expected to be satisfactory.
 
 EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
 
 There are no material changes and commitments affecting the financial
 position of the Company, subsequent to the end of the Financial Year.
 
 PUBLIC DEPOSITS
 
 The company has no public deposits outstanding at the beginning of the
 year and the Company has not accepted any deposits within the meaning
 of Section 73 to 76 of the Companies Act, 2013 and the Companies
 (Acceptance of Deposits) Rules, 2014 during the year under review.
 
 CORPORATE GOVERNANCE
 
 In line with requirements of Clause 49 of the Listing Agreement our
 Company is committed to the principles of good Corporate Governance and
 continues to adhere good corporate governance practices consistently.
 
 A separate section on Corporate Governance, Management Discussion and
 Analysis alongwith a certificate from the Auditors of the Company
 regarding compliance of conditions of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreement forms part of this
 Annual Report.
 
 EXTRACT OF ANNUAL RETURN
 
 An extract of the Annual Return as on Financial Year Ended on 31st
 March, 2015, pursuant to the sub-section (3) of Section 92 of the
 Companies Act, 2013 and forming part of the report, in Form MGT - 9 is
 enclosed as Annexure - I
 
 DIRECTORS
 
 Smt S Sihamani (DIN 06945399), was appointed as Additional Director
 (Woman Director) u/s 149 of the Companies Act, 2013 and Clause 49 of
 the Listing Agreement with effect from 1.9.2014. She holds office upto
 the date of ensuing Annual General Meeting and being eligible, offers
 herself for re-appointment.
 
 Further, Smt S Sihamani, fulfills the criteria required for being
 appointed as an Independent Director and recommended to be appointed as
 an Independent Director of the Company for a term of five consecutive
 years from date of the ensuing Annual General Meeting.
 
 Sri S V Arumugam, Managing Director (DIN 00002458) is required to
 retire by rotation at the ensuing Annual General Meeting, he is
 eligible and seeks re-appointment.
 
 The term of office of Sri S V Arumugam as Managing Director expires on
 26.6.2015. The Board of Directors on the recommendation of Nomination
 and Remuneration Committee, have appointed him for a further period of
 5 years and approved the remuneration payable to him. Such appointment
 and payment of remuneration are subject to approval of shareholders in
 the ensuing Annual General Meeting.
 
 All Independent Directors have given declarations that they meet the
 criteria of independence as laid down under section 149(6) of the
 Companies Act, 2013 and Clause 49 of the Listing Agreement.
 
 KEY MANAGERIAL PERSONNEL
 
 The Company has appointed the following persons as Key Managerial
 Personnel during the year.
 
 Name of the persons       Designation
 
 Sri S V Arumugam          Managing Director
 
 Sri C S Balakumar         Chief Financial Officer
 
 Sri N Krishnaraj          Company Secretary
 
 AUDIT COMMITTEE
 
 The Audit Committee comprises of
 
 1.  Sri C S K Prabhu - Chairman (Non- Executive Independent Director)
 
 2.  Sri K N V Ramani - Member (Non- Executive Independent Director) and
 
 3.  Sri S Palaniswami - Member (Non- Executive Independent Director)
 
 The Board has implemented the suggestions made by the Audit Committee
 from time to time.
 
 EVALUATION OF BOARD OF DIRECTORS
 
 Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
 the Listing Agreement, Independent Directors at their meeting without
 participation of non-independent directors and management considered
 and evaluated the Boards'' performance, performance of the Chairman and
 Managing Director.
 
 The Board has carried out an annual evaluation of its own performance,
 of the individual directors as well as the Committees of Directors.
 
 BOARD MEETINGS
 
 During the year under review, four Board Meetings were conducted. The
 details of the same have been given in the Corporate Governance Report
 of Clause 49 of the Listing Agreement forming part of this Report.
 
 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
 
 The Company has not given any loans or guarantees governed under the
 provisions of Section 186 of the Companies Act, 2013. The details of
 the investments made by Company are given in the notes to the financial
 statements.
 
 ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
 
 The Company has established a Vigil Mechanism for Directors and
 employees to report concerns about unethical behavior, actual or
 suspected fraud or violation of the Company''s code of conduct or
 ethics. The policy has been posted in the website of the Company:
 www.bannarimills.com.
 
 POLICY ON NOMINATION AND REMUNERATION COMMITTEE
 
 The Board of Directors have framed a policy setting out the framework
 for payment of Remuneration to Directors, Key Managerial Personnel and
 Senior Management Personnel of the Company. The policy is explained as
 part of the Corporate Governance Report. The Committee ensures that
 
 a.  The level and composition of remuneration is reasonable and
 sufficient to attract, retain and motivate Directors of the quality
 required to run the Company successfully
 
 b.  Relationship of remuneration to performance is clear and meets
 appropriate performance benchmarks and
 
 c.  Remuneration to Directors, Key Managerial Personnel and Senior
 Management involves a balance between fixed and incentive pay
 reflecting short and long term performance objectives appropriate to
 the working of the Company and its goals.
 
 RELATED PARTY TRANSACTIONS
 
 All the related party transactions that were entered into during the
 financial year in the ordinary course of business and the prices were
 at arm''s length basis Hence, the provisions of Section 188 of the
 Companies Act, 2013 are not attracted. Further no materially
 significant related party transactions were made by the Company with
 Promoters, Directors, Key Managerial Personnel or other designated
 persons which may have potential conflict with interest of the company
 at large. Hence reporting in AOC-2 is not required. Approval of Audit
 Committee was obtained for transactions of repetitive nature on annual
 basis. All related party transactions are placed before the Audit
 Committee and Board of Directors for their review. The policy on
 Related Party Transactions is available in the website
 www.bannarimills.com.
 
 SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
 
 There are no significant and material orders passed by the
 Regulators/Courts that would impact the going concern status and the
 Company''s operation in future.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As stipulated in Section 134 (5) of the Companies Act, 2013 your
 Directors confirm that:
 
 a) Your Directors have followed in the preparation of the annual
 accounts, the applicable accounting standards with proper explanation
 relating to material departures;
 
 b) Your Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit and
 loss of the Company for that period;
 
 c) Your Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 d) Your Directors have prepared the annual accounts on a going concern
 basis;
 
 e) Your Directors have laid down internal financial controls to be
 followed by the Company and that such internal financial controls are
 adequate and were operating effectively; and
 
 f) Your Directors have devised proper system to ensure compliance with
 the provisions of all applicable laws and that such systems were
 adequate and operating effectively.
 
 AUDITORS
 
 The present Auditors of the Company M/s P.N.Raghavendra Rao & Co.,
 Chartered Accountants, Coimbatore, were appointed for a term of 3
 years, pursuant to the resolution passed by the members at the Annual
 General Meeting held on 25th August, 2014. A resolution ratifying their
 appointment in terms of Section 139 is also placed before the
 shareholders for their approval at the ensuing Annual General Meeting.
 
 SECRETARIAL AUDIT
 
 Pursuant to provisions of Section 204 of the Companies Act, 2013 and
 The Companies (Appointment and Remuneration of Managerial Personnel)
 Rules, 2014 the Company has appointed Mr R Dhanasekaran, Practicing
 Company Secretary to undertake the Secretarial Audit of the Company.
 The report is annexed herewith as Annexure - II
 
 No adverse qualifications/comments have been made in the said report by
 the Practicing Company Secretary.
 
 COST AUDITOR
 
 Pursuant to Section 148 of the Companies Act, 2013 read with the
 Companies (Cost Records and Audit) Rules, 2014 as amended from time to
 time, the Board of Directors, on the recommendation of Audit Committee,
 has appointed Sri M Nagarajan, Cost Accountant, Coimbatore as Cost
 Auditor to conduct Cost Audit of the Company for the financial year
 2015 - 2016 with remuneration. As required under the Companies Act,
 2013, a resolution seeking members'' approval for the remuneration
 payable to the Cost Auditor forms part of the Notice convening Annual
 General Meeting.
 
 SUBSIDIARY
 
 During the year under review, Abirami Amman Mills Private Limited
 ceased to be a subsidiary of your company. Further the policy
 determining ''material'' subsidiary is available in the website
 www.bannarimills.com.
 
 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
 
 The Company has an Internal Control System, commensurate with the size,
 scale and complexity of its operations. The scope and authority of the
 Internal Audit function is defined in the Internal Audit Manual. To
 maintain its objectivity and independence, the Internal Audit function
 reports to the Chairman of the Audit Committee & to the Chairman &
 Managing Director.
 
 The Company has an Internal Audit Department which monitors and
 evaluates the efficiency and adequacy of internal control system in the
 Company, its compliance with operating systems, accounting procedures
 and policies at all locations of the Company.
 
 Based on the report of internal audit function, corrective actions are
 taken in the respective areas and thereby strengthen the controls.
 Significant audit observations and recommendations along with
 corrective actions thereon are presented to the Audit Committee of the
 Board.
 
 STATEMENT ON RISK MANAGEMENT POLICY
 
 Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Clause 49
 of the Listing Agreement, the Company has constituted a Risk Management
 Committee. The Committee has developed a Risk Management Policy and
 implemented the same. The details of the Committee and its terms of
 reference are set out in the Corporate Governance Report forming part
 of the Boards Report.
 
 At present the Company has not identified any element of risk which may
 threat the existence of the Company.
 
 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
 
 The Company has constituted Corporate Social Responsibility Committee
 which shall recommend to the Board, the activities to be undertaken by
 the Company as specified in Schedule VII, recommend the amount of
 expenditure to be incurred on such activities and monitor the CSR
 policy of the Company. The Company has partially spent the amount
 stipulated under the requirements of the Act.  Corporate Social
 Responsibility Committee constituted consisting of the following
 Directors with effect from 21.5.2014.
 
 Sri S V Arumugam - Managing Director
 
 Sri S Palaniswami - Independent Director
 
 Sri K Sadhasivam - Independent Director
 
 The CSR activities and its related particulars is enclosed as Annexure
 III 
 
 
 STATUTORY DISCLOSURES
 
 I.  Conservation of Energy and others - The particulars required to be
 included in terms of Section 134(3)(m) of the Companies Act, 2013 read
 with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year
 ended 31st March 2015 relating to Conservation of Energy, etc., is
 enclosed as Annexure IV.
 
 II.  Remuneration of Directors and other details- The information
 required under Section 197(12) of the Companies Act, 2013 read with
 Companies (Appointment and Remuneration of Managerial Personnel) Rules,
 2014 and forming part of the Directors'' Report for the year ended 31st
 March, 2015 is provided in Annexure V.
 
 HUMAN RESOURCES AND INDUSTRIAL RELATIONS
 
 During the year under review the human relations continued to be very
 cordial. The Company wishes to acknowledge the contribution of the
 employees at all levels of the organisation.
 
 The Company has placed an Anti Sexual Harassment Policy in line with
 the requirements of The Sexual Harassment of Women at the Workplace
 (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints
 Committee (ICC) has been set up to redress complaints for sexual
 harassment. All employees (permanent, contractual, temporary, trainees)
 are covered under this policy. The Company has not received any
 complaints received for disposal off during the year.
 
 ACKNOWLEDGEMENT
 
 Your Directors acknowledge with gratitude the timely assistance and
 help extended by the Bankers for having provided the required bank
 facilities. Your Directors wish to place on record their appreciation
 of the contributions made by the employees at all levels for the
 excellent performance of your company.
 
                                                 By Order of the Board 
 
 Coimbatore                                               S V ARUMUGAM
 
 30th May, 2015                           Chairman & Managing Director
Source : Dion Global Solutions Limited
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