DIRECTORS' REPORT To the Members Your directors are pleased to present their Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2014. Dividend Your Directors are glad to recommend for your approval, a dividend of 10% 1 per share), [Previous year Rs. 0.60 per share] for the year ended 31st March 2014, involving an outgo of Rs. 10.00 lakhs. Additionally, the dividend distribution tax will involve an outlay of Rs. 1.70 lakhs. Operations During the year, the Company reported a Profit after Tax (PAT) of Rs. 82.43 lakhs as against Rs. 19.80 lakhs for the previous year. During the year under review, the sales and other income were at Rs. 973.38 lakhs as against Rs. 141.62 lakhs for the previous year. Garment Unit Your Company has successfully completed its first year of operations with manufacturing of garments which has huge potential on export target of textiles set by the Government of India. The Management is confident by bagging new orders from Direct buyers, which will contribute higher margin on our exports by improving capacity utilization of units during the financial year 2014-15. Depository System As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on 31st March 2014, 84.55% of the Company's total paid-up Capital representing 8,45,490 Shares is in dematerialised form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the Depositories. Deposits The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March 2014. Subsidiary Companies In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss and other documents of the subsidiary companies, Sri Mahasakthi Mills Limited and Sri Arumuga Cottspin Private Limited are not being attached with the Balance Sheet of the Company. The summary of the key financials of the Company's Subsidiaries is included in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies shall be kept for inspection by any shareholders at Registered Office of the holding company. Disclosure of Particulars As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988: a. The Company has no activity involving conservation of energy or technology absorption; b. The details of Foreign Exchange Earnings and Foreign Exchange Outgo are annexed in Annexure - I of the Directors' Report. Personnel The Company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956. Corporate Governance Report As required under Clause 49 of the Listing Agreement, a report on Corporate Governance (including Management Discussion and Analysis Report) and a certificate from the Auditors of the Company regarding compliance of the conditions of corporate governance as stipulated under the Listing Agreement forms part of the Annual Report. Consolidated Financial Statements The Directors also present the audited consolidated financial statements incorporating the audited financial statements of the subsidiaries prepared in accordance with the Accounting Standards and Listing Agreement as prescribed by SEBI. Directors' Responsibility Statement The Board of Directors of the Company confirm: i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure; ii. that the selected accounting policies were applied consistently and the Directors 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 as at 31st March 2014 and of the profit of the Company for the year ended on that date; iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the annual accounts have been prepared on a going concern basis. Directors Sri K Dhanakumar, Director retires from the Board by rotation and is eligible for re-appointment and Sri Vaibhav Duvvur and Sri S Sanjay, Independent Directors appointed as required under Companies Act,2013 for a period of five years commencing from 29th September 2014. The profile of the director, as required under Clause 49(IV)(G) of the Listing Agreement entered into with stock exchanges are given in the Annexure to the Notice of the Annual General Meeting. Audit Committee The Audit Committee consists of three Non-Executive Directors out of which two are Independent Directors. The present members of the Committee are Sri S Sanjai, Mr K Dhanakumar and Sri Vaibhav Duvvur. Sri S Sanjai is the Chairman of Audit Committee. The role, terms of reference, the authority and power of Chairman are in conformity with the requirements of the Companies Act, 1956. Auditors The Auditors, M/s S Lakshminarayanan Associates, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Acknowledgements Your Directors wish to place on record the valuable assistance and co-operation extended by the members and other stakeholders. For and on behalf of the Board T Rajkumar Chairman & Managing Director 30th May 2014 Coimbatore |