With a deep sense of sorrow, it is reported that Sri.R.Doraiswami
Naidu, Chairman of the Company expired on 9th April 2015. The Company
hereby places on record the distinguished service rendered by
Sri.R.Doraiswami Naidu who founded the Company, by being at the helm
of affairs of the company for about 66 years and also the phenomenal
contribution made by him for the progress of the company during his
tenure of Directorship / Chairmanship.
Your Directors submit the following Report on the working of the
Company for the year ended 31.03.2015.
After meeting all working expenses, interest, repairs to machinery and
buildings, the working results of the company for the year 2014-15 is
given below :-Financial results:
(Loss) before Interest and
Depreciation (2,74,43,316) (10,53,969)
Less : Interest (4,49,04,680) (3,23,31,592)
Depreciation (1,23,38,637) (1,02,13,362)
(Loss) before Exceptional items (8,46,86,633) (4,35,98,923)
Exceptional Item: Surplus on conversion
of land into Stock-in-Trade 6,82,42,005 85,94,196
(Loss) after Exceptional Item (1,64,44,628) (3,50,04,727)
(DEFICIT) carried over to Balance Sheet (1,64,44,628) (3,50,04,727)
The turnover of the Company has come down from Rs.17.30 crores to
Rs.16.25 crores and the Company has incurred a loss of Rs.1.64 crores
after charging Interest and Depreciation and the exceptional items.
This is mainly due to suspension of activity in Tamilnadu and reduced
utilization in Andhra Pradesh.
There was volatility in cotton price and due to general sluggishness
of the economy in the Country as well as in the World over, there was
no pick up in demand. Consequently, much progress could not take place
in the performance of the company. However, the prospects for textile
industry looks promising provided a favourable condition prevails in
the Country due to Governments initiatives.
The economy is expected to pick up in the coming months due to the
initiatives taken by the Government. The Company intends to operate
its plant during the current year to the full capacity, utilizing the
power available to the maximum extent thereby improve its performance.
Management Discussion and Analysis
In terms of the provisions of Clause 49 of the Listing Agreement, the
Management Discussion and Analysis is set out in this report. It
contains an analysis on the Performance of the industry, the Company,
Internal Control System and Risk management policy.
Board of Directors:
The composition of the Board of Directors of the Company is furnished
in the Corporate Governance Report annexed to this report. The Company
has issued a letter of appointment to all independent directors and
the terms and conditions of their appointment have been disclosed on
the website of the company. In terms of Section 149 of the Companies
Act, 2013 (Act), Sri.N.Jothikumar (DIN:00028025) Sri.R.Narayanamurthy
(DIN:00028158) and Sri.R.Radhakrishnan (DIN:00028190), Independent
Directors were appointed by the Shareholders at the 67th Annual
General Meeting (AGM) held on September 29, 2014 for a period of five
years to hold Office upto 28th September 2019. All the independent
directors have affirmed that they satisfy the criteria laid down under
Sec.149(6) of the Act and Clause-49 of the Listing Agreement. Further,
the Company''s Code of Conduct suitably incorporates the duties of
independent directors as laid down in the Act.
Retirement by rotation:
Smt. L. Nagaswarna (DIN: 00051610), who has been appointed as a Whole
time Director, retires by rotation at the ensuing Annual General
Meeting of the Company, as per the terms of her appointment. The place
so vacated by her has to be filled up at the same meeting. The
retiring Director is eligible for re-appointment at the ensuing Annual
General Meeting. Accordingly, a resolution to this effect is included
in the Agenda for consideration of members at the ensuing Annual
General Meeting of the Company.
During the year six (6) Board Meetings were convened and held, the
details of which are given in the Corporate Governance Report. The
intervening period between two consecutive meetings was within the
period prescribed under the Act.
Meeting of Independent Directors:
During the year, one separate meeting of independent directors was
held. All the independent directors were present at this meeting. In
the said meeting, the independent directors assessed the quality,
quantity and timeliness of flow of information between the management
and the Board and expressed that the current flow of information and
contents were adequate for the Board to effectively perform its
The evaluation of all the Directors and the Board as a whole was
conducted based on the criteria and framework adopted by the Board.
The evaluation process has been framed by the Nomination and
Remuneration Committee and approved by the Board. A questionnaire
consisting of certain criteria is adopted for reviewing the
functioning and effectiveness of the Board and for identifying
possible areas for improvement. Each Board member is requested to
evaluate the effectiveness of the Board dynamics and relationships,
information flow, decision making of the Directors, relationship to
Stakeholders, Company performance, company strategy and effectiveness
of the whole Board and its various committees on a scale of one to
Necessary feed back is provided for improvement in the performance of
the Directors and the functioning of the overall Board and the various
Familiarisation Programme for Independent Directors :
The Company has put in place required programme for independent
directors to get familiarized with the Organisation and also about
their duties and responsibilities.
Key Managerial Personnel:
Sri.D.Lakshminarayanaswamy (DIN:00028118), Managing Director,
Smt.L.Nagaswarna, Wholetime Director (DIN:00051610),
Sri.S.A.Subramanian and Sri. G. Krishnakumar as Company Secretary and
Chief Financial Officer respectively constitute Key Managerial
Personnel of the Company.
The policy on appointment, remuneration and evaluation criteria for
Directors and Senior Management is as per the recommendation of the
Nomination and Remuneration Committee of the Board. The Company
recognized that Compensation Policy is an important and strategic tool
in the achievement of vision and goals of the company. It is in
keeping with the performance of the individuals, internal equity,
market trends and industry practices, legal requirements and
appropriate governance standards.
The Nomination and Remuneration Committee recommends the remuneration
of Directors and Senior Management personnel which is approved by the
Board of Directors, subject to the approval of shareholders, where
In terms of the provisions of Section 177 of the Act and Clause 49 of
the Listing Agreement, the Audit Committee of the Board was
reconstituted to act in accordance with the terms of reference
prescribed therein. Detailed disclosure on compositions, terms of
reference and meetings of the Audit Committee are furnished in the
Corporate Governance Report. Statutory Auditors:
The Auditors of the Company M/s.M.S.Jagannathan & Visvanathan were
appointed at the last AGM to hold Office till the conclusion of 69th
Annual General Meeting subject to ratification by members at the
ensuing Annual General Meeting and being eligible offer themselves for
their continuance as auditors of the company.
Ministry of Corporate Affairs (MCA) has vide Notification dated 31st
December 2014 amended the Companies (Cost Records and Audit) Rules
2014. Accordingly, the rules apply to the Companies which have
turnover exceeding the prescribed limits. Since the Company''s
turnover is less than the prescribed limit, the company is exempt from
maintenance of Cost Records and Audit thereof.
Smt.C.Jayanthi, Practising Company Secretary was appointed to conduct
the Secretarial Audit of the Company for the Financial year 2014-15 as
required under Sec.204 of the Act, and Rules made thereunder. The
Secretarial Audit Report for the Financial Year 2014-15 forms part of
the Annual Report as annexure to the Board''s Report.
The Board has appointed Smt.C.Jayanthi, Practising Company Secretary
as Secretarial Auditor of the Company for the Financial Year 2015-16.
Internal Auditor :
The Company continues to engage Smt.Sasirekha Vengatesh, Chartered
Accountants as Internal Auditors of the Company. The scope of work
includes review of processes for safeguarding the assets of the
company, review of operational efficiency, effectiveness of systems
and processes and assessing the strength and weaknesses of internal
control. Internal Auditors reports are placed before the Audit
Committee on a regular basis for taking suitable action for
improvement, wherever required.
Statement of Responsibility of Directors:
As required under section 134 of the Act, it is stated
a. that in the preparation of the annual accounts, the applicable
accounting standards had been followed alongwith proper explanation
relating to material departures.
b. that the Directors had selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year (i.e.) 31st
March 2015 and of the loss of the company for that period.
c. that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
d. that the directors had prepared the annual accounts on a going
concern basis, and
e. that 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.
f. that 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. Related Party Transactions:
All contracts / arrangements / transactions entered into by the
company during the Financial Year with related parties were in the
ordinary course of business and on arm''s length basis. During the
year, the company had not entered into any contracts / arrangements /
transactions with related parties which could be considered material
in accordance with the policy of the company on materiality of related
Statement giving details of the Contacts / arrangements / transactions
with related parties is placed before the Audit Committee and the
Board of Directors for their approval on quarterly basis.
Corporate Social Responsibility :
Pursuant to Sec.135 of the Act the Company does not satisfy the
eligibility criteria with regard to networth, turnover and net profit
and hence the company is not required to comply with the provisions
relating to CSR.
As on 31.03.2015, there was no Fixed Deposits lying with the Company.
Energy Conservation, Technology Absorption and Foreign Exchange
earnings & outgo :
The information on the above stipulated under Sec.134(3)(m) of the Act
read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed
herewith as Annexure-I. Particulars of Directors, Key Management
Personnel and Employees:
The information required pursuant to Sec.197 of the Act read with
Rule5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules 2014 in respect of Directors, Key Management
Personnel and employees of the Company are provided in the Annual
A separate Report on Corporate Governance is attached to this report.
A certificate from the Auditors of the company confirming compliance
with the conditions of Corporate Governance as stipulated under Clause
49 of the Listing Agreement is attached to this report.
a. Details of loan, guarantees and investments under the provisions of
Sec.186 of the Act are given in the Notes.
b. The internal control systems and its adequacy are discussed in the
Management Discussion and Analysis annexed to the Directors Report.
c. There was no significant material order passed by the Regulators /
Courts which would impact the going concern status of the company and
its future operations.
d. The details forming part of the extract of the Annual Return in
Form MGT-9 is annexed to the Directors'' Report.
e. The Company has adopted the Whistle Blower Policy for Directors and
Employees of the Company to report concerns about the unethical
behaviour, actual or suspected fraud or violation of the Company''s
Code of Conduct and ethics. The policy is provided pursuant to Clause
7(iii) of Annexure-XII to the Listing Agreement. It also provides for
adequate safeguard against victimization of Directors / Employees who
avail of the mechanism and also provide for direct access to the
Chairman of the Audit Committee in exceptional cases. The policy is
also disclosed in the Company''s Website.
f. The Company has adopted a code of conduct for the Board of
Directors and Senior Management of the company and all of them have
affirmed compliance of the same.
g. The Company has in place an Anti Sexual Harassment Policy in line
with the requirements of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. Necessary
mechanism has been put across the company in this regard to cover all
the women employees in the company.
h. As contemplated under Clause 49(IX) of the Listing Agreement,
certificate from MD/CEO Sri.D.Lakshminarayanaswamy & CFO
Sri.G.Krishnakumar was placed before the Board of Directors at their
meeting held on 28.05.2015.
i. Pursuant to Sec.134(3)(l) of the Act, there was no significant
material changes and commitments affecting the financial position of
the Company has taken place between the end of the financial year of
the company and the date of Directors'' Report.
As reported earlier, the company proposes to develop the land at
Ganapathy, in stages and necessary actions are being taken in this
regard. If, any material development takes place, the same will be
reported in due course.
Our thanks are due to The South Indian Bank Ltd., for their support
and assistance to meet our business needs.
The Directors appreciate the services rendered by the Officers, Staff
and the employees of the Company.
We pray for the Grace of Almighty Sri Jaganatha Perumal for the
prosperity of the Company.
For and on behalf of the Board of Directors
of Sri Ramakrishna Mills (Coimbatore) Limited
Place : Coimbatore D. LAKSHMINARAYANASWAMY
Date : 28.05.2015 Chairman of the meeting