DIRECTORS' REPORT Your 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. 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, Practising 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, Practising 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 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 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 Arm's 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. 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. 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 Board's 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 |