The Directors have pleasure in presenting the 25th Annual Report
together with audited accounts of the Company for the year ended 31st
FINANCIAL RESULTS : (Rs. in Lakhs)
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
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
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.
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
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.
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.
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).
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
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.
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.
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
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
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
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
The Board has carried out an annual evaluation of its own performance,
of the individual directors as well as the Committees of Directors.
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
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:
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
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
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.
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.
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.
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
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
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 &
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
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
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.
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