TO THE MEMBERS OF AMARJOTHI SPINNING MILLS LIMITED
Your Directors have pleasure in presenting the Twenty Seventh Annual Report togetherwith the audited accounts of your Company for the year ended 31st March 2015.
| ||2014-2015 ||2013-2014 |
| ||Rs. ||Rs. |
|Revenue from Operations ||2014788794.60 ||1981092608.70 |
|Other Income ||16457814.74 ||22101203.76 |
|Total Revenue ||2031246609.34 ||2003193812.46 |
|Less: Total Expenses ||1856165136.16 ||1733668758.76 |
|Profit before Tax ||175081473.18 ||269525053.70 |
|Profit after Tax ||132188548.95 ||201125053.70 |
|Surplus brought forward ||511634412.59 ||331703076.89 |
|Add : Excess provision for taxation reversed ||0 ||14646320.00 |
|Less : Transition provision for Depreciation ||0 ||0 |
|Amount available for appropriation ||643822961.54 ||547474450.59 |
|Appropriations to : || || |
|General Reserve ||13220000.00 ||20150000.00 |
|Proposed Dividend Including Dividend Tax ||15836040.00 ||15690038.00 |
|Surplus carried to balance sheet ||614766921.54 ||511634412.59 |
|TOTAL ||643822961.54 ||547474450.59 |
STATE OF COMPANY S AFFAIRS AND FUTURE OUTLOOK :
The Company s sales increased slightly by 1.70% to Rs.20147.89 Lacs during the yearunder review as against Rs.19810.92 Lacs in the previous year.
i) YARN DIVISION
Your Directors inform you that yarn division continues to perform well. Production andsales increased more than last year level. However due to raw material price fluctuationand Power cost the profitability of the yarn Division have not improved much.
ii) PROCESSING UNIT
The performance of the Processing unit has improved and problems arising from theeffluent Treatment plants are being sorted out.
The Company will continue to perform well in the domestic market. The Company is in theprocess of implementing several cost saving measures which will make the product morecompetitive.
CHANGE IN NATURE OF BUSINESS IF ANY :
There were no changes in Nature of Business during the year 2014-2015
Your Directors are glad to recommend a dividend of Rs. 2.00 per share (20% on theEquity Capital) for the year ended 31st March 2015 absorbing a sum of Rs.13500000/- forthe approval of the share holders at the ensuing Annual General Meeting. The dividend willbe free of tax in the hands of shareholders since the Company will be paying the DividendDistribution Tax at the prescribed rate.
During the year your Company has transferred an amount of Rs.13220000.00 to theGeneral Reserve.
CHANGES IN SHARE CAPITAL :
There were no changes in Share Capital of the Company during the Financial Year2014-2015.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS :
The Company has not issued any Equity Shares with Differential Rights during theFinancial Year 2014-2015.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS :
The Company has not provided any Stock Option Scheme to the employees during the yearUnder Review.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES :
The Company has not issued any Sweat Equity Shares during the year under review.
EXTRACT OF ANNUAL RETURN :
As required pursuant to Section 92 (3) of the Companies Act 2013 and Rule 12 (1) ofthe Companies (Management and Administration) Rules 2014 an extract of Annual Return inthe Form MGT-9 is annexed as a part of this report vide ANNEXURE VI .
NUMBER OF BOARD MEETINGS :
During the Financial Year 2014-15 14 (Fourteen) Meetings of the Board of Directors ofthe company were held. The details of Board Meeting and Attendance of Directors aredisclosed in the Corporate Governance Report.
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186 :
The Company has not provided any Loan/Guarantee during the year under review.
Details of Investments during the year 01.04.2014 to 31.03.2015 :
|Sl. No ||Date of Investment ||Details of Investee ||Amount ||Purpose for which the proceed from investment is proposed to be utilized by the recipient |
|1 ||12.05.2014 ||Amarjothi Power Generation & Distrubition co ltd. ||7500000.00 ||Equity capital |
|2 ||02.07.2014 ||Amarjothi Wind Farm ||9475600.00 ||Partner capital |
RELATED PARTY TRANSACTIONS :
All contracts / arrangements / transactions entered by the company during the financialyear with related parties where on arms length basis .During the year the company had notentered into any contracts/ arrangements / transactions with related parties which couldbe considered material in accordance with the policy of the company on materiality ofrelated party transactions. Hence the requirement for furnishing details under section134(3) (h) in prescribed Form No AOC 2 is not applicable. Further the Company s policy onRelated Party Transactions is attached as part of this report vide ANNEXURE III .
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS :
Based on the Secretarial Audit Report we have observed that few aspects are not incompliance with Companies Act and Listing Agreement entered into with Stock Exchange whichis purely unintentional and the necessary actions have been taken to resolve the issue.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT :
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information relating to Conservation of Energy Foreign Exchange Earning and OutGo Technology Absorption pursuant to section 134(3) (m) of the act read with rule 8 subrule 3 of the companies (accounts) rules 2014 is attached as ANNEXURE I which forms partof the report.
RISK MANAGEMENT POLICY :
Availability of quality raw material and at competitive prices continuous to be a majorfactor of concern because India is basically an agrarian economy depending mostly onnatural resources like water for its crops. The rising interest rates increasing fuelprices power shortage labour scarcity are causes of the concern for the industry as awhole. The effluent treatment related problem faced by the Processing Division and thenon-drawal of wind mill generated power by the TNEB are Company-specific causes ofconcern.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES :
The Company does not have any Subsidiary Joint venture or Associate Company.
SECRETARIAL AUDIT :
In terms of Section 204 of the Companies Act 2013 and the rules thereunder theCompany has appointed Mr. R.Ramchandar B.com ACS LLB as the Secretarial Auditor of theCompany. Secretarial Audit Report in Form MR-3 as provided by Mr. R. Ramchandar is annexedto this Report vide ANNEXURE V .
REMUNERATION OF DIRECTORS & KMP :
Disclosure pursuant to Rule 5 (1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed vide ANNEXURE VII .
DETAILS OF DIRECTORS APPOINTMENT AND RESIGNATION :
i) Smt. Meiyappan Amutha (DIN: 07137884) who was appointed as Additional Director ofthe company w.e.f. 27th Day of March 2015 and who holds office upto the date ofthis Annual General Meeting of the Company be and is hereby appointed as an IndependentDirector of the Company.
ii) Sri. S. Sathyanarayanan Independent Director has resigned from the board on09.09.2014
DIRECTORS RETIRE BY ROTATION :
Mr. N. Rajan and Mr. R. Premchander retire by rotation and being eligible offerthemselves for reelection.
ANNUAL EVALUATION BY THE BOARD
The Board has made a formal evaluation of its own performance and that of itscommittees and individual directors as required under Section 134(3) (p) of the CompaniesAct 2013.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL :
During the year 2014-15 no significant and material Orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and company soperations in future
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS :
The Company has a well-established internal financial control and risk managementframework with appropriate policies and procedures to ensure the highest standards ofintegrity and transparency in its operations and a strong corporate governance structurewhile maintaining excellence in services to all its stakeholders. Appropriate controls arein place to ensure:
(a) the orderly and efficient conduct of business including adherence to policies
(b) safeguarding of assets
(c) prevention and detection of frauds / errors
(d) accuracy and completeness of the accounting records and
(e) timely preparation of reliable financial information.
The Company has neither accepted nor renewed any deposits during the year under review.
RECEIPT OF ANY COMMISSION BY MD/WTD FROM A COMPANY OR FOR RECEIPT OF COMMISSION/REMUNERATION FROM ITS HOLDING OR SUBSIDIARY :
REAPPOINTMENT OF INDEPENDENT DIRECTOR :
DECLARATION BY INDEPENDENT DIRECTOR :
The Company has received necessary declaration from each Independent Director of theCompany under Section 149 (7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149 (6).
BOARD & AUDIT COMMITTEE :
The details regarding number of board meetings held during the financial year andcomposition of Audit Committee is furnished in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE POLICY :
The details regarding Nomination and Remuneration Committee Meeting held during thefinancial year is annexed to the Corporate Governance Report.
DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM :
During the year the Company adopted a Whistle Blower Policy and established thenecessary vigil mechanism for Directors and Employees to report concerns about unethicalbehavior. The mechanism provides for adequate safeguards against victimization. Furtherno person has been denied access to the Audit Committee.
The Whistle Blower Policy is available under the following web site:http://www.amarjothi.net
Mr. V. Narayanaswami M.A. F.C.A. Chartered Account Coimbatore (MembershipNo.023661) retires and is eligible for re-appointment for a term of five years. Acertificate from the Auditors that they satisfy the conditions prescribed under theCompanies Act 2013 and the Rules made thereunder (including satisfaction of criteriaunder section 141 of the Companies Act 2013) has been received from them.
A detailed report on corporate governance together with a certificate from theStatutory Auditors in compliance with clause 49 of the Listing Agreement is attached aspart of this report vide ANNEXURE II .
CORPORATE SOCIAL RESPONSIBILITY
Based on last three years average Net Profit the Company is required to spend a sum ofRs. 2489413 in the year 2014-15. The Company is working out for schemes that couldresult in enduring benefits to the community at large. The Company shall find out ways andmeans to spend the same in the coming months and shall submit the relevant report in theensuing year. The Company could not spend the money before finalising this report as thetime was too short to identify suitable projects for spending the same.
List of CSR Activities and Composition of CSR Committee is annexed herewith as ANNEXUREIV .
CORPORATE SOCIAL RESPONSIBILITY POLICY
Through Amarjothi Spinning Mills Limited long standing commitment to service to thesociety we strive to attain leadership in our business through a socially andenvironmentally responsible way while taking care of the interests of our stakeholders.
We work with the primary objective of contributing to the sustainable development ofthe society and creating a greener and cleaner environment around us.
Towards achieving these objectives Amarjothi Spinning Mills Limited has initiatedSanitation Programme for providing toilets a program which executes various social andenvironmental development activities in and around its operational locations.
CORPORATE SOCIAL RESPONSIBILITY PURPOSE STATEMENT
The Company shall seek to impact the lives of the disadvantaged by supporting andengaging in activities that aim to improve their wellbeing. We are dedicated to the causeof empowering people educating them and in improving their quality of life. While we willundertake programmes based on the identified needs of the community education andhealthcare shall remain our priority. Across the different programme areas identified bythe company it would be our endeavour to reach the disadvantaged and the marginalisedsections of the society to make a meaningful impact on their lives. We are committed toidentifying and supporting programmes aimed at:
Empowerment of the disadvantaged sections of the society through education access toand awareness about financial services and the like;
Provision of access to basic necessities like healthcare drinking water &sanitation and the like to underprivileged;
Work towards eradicating hunger and poverty through livelihood generation and skilldevelopment;
Supporting environmental and ecological balance through afforestation soilconservation rain water harvesting conservation of flora & fauna and similarprogramme;
Promotion of rural sports nationally recognized sports paralympic sports and Olympicsports through training of sportspersons;
Undertake rural development projects;
Any other programme that falls under CSR purpose listed in Schedule VII of theCompanies Act 2013 amended from time to time and which are aimed at the empowerment ofdisadvantaged sections of the society.
This policy will apply to all projects/programmes undertaken as part the Company sCorporate Social Responsibility and will be developed reviewed and updated periodicallywith reference to relevant changes in corporate governance international standards andsustainable and innovative practices. The policy will maintain compliance and alignmentwith the activities listed in Schedule VII and Section 135 of the Companies Act 2013 andthe rules framed there under.
The approval of the CSR policy and oversight is the responsibility of the Company sBoard of Directors. The responsibility of the CSR committee is to formulate the policy andto administer the policy through implementing partner(s) or via self-implementation. TheCSR Committee shall provide guidelines for projects/partner selection to the respective HRor CSR teams wherever applicable. The CSR committee is to ensure that projects/programmesare compliant with regulations and are monitored and reported effectively. As the Companys CSR activities evolve the policy may be revised by the CSR committee and approved bythe Board of Directors.
The CSR Committee shall recommend to the Board the amount of expenditure to be incurredon the CSR activities to be undertaken by the company as approved by the Board. In case ofany surplus arising out of CSR projects the same shall not form part of business profitsof the Company.
The Company shall undertake CSR project/programmes identified by the CSR Committee andapproved by the Board of Directors in line with the CSR Policy.
The Company shall implement its CSR programmes/projects:
a) Through an implementation partner that can be a public charitable trust or a societyregistered under applicable Acts or a Company registered under Section 8 of the CompaniesAct 2013; or
b) On its own through the relevant HR or CSR department or through its own foundation(if applicable) specifically created for implementing its CSR initiatives.
The Company may enter into partnerships or alliances with NGOs Trusts or otherCorporate Foundations etc. to effectively implement its CSR programmes/projects.
The Company can also implement programme(s) in collaboration with other company(ies)if permissible and feasible in such a manner that the CSR Committee is in a position toreport separately on such projects / programs.
The Company shall formulate criteria and procedure for selection screening and duediligence of its implementing partners.
MONITORING AND REPORTING
The CSR Committee will oversee the implementation and monitoring of all CSR projects/programmes and periodic reports shall be provided for review to the Board. The Companywill institute a well-defined transparent monitoring and review mechanism to ensure thateach CSR project/programme has:
1. Clear objectives developed out of the societal needs that may be determined throughneed assessment studies and research (secondary or primary);
2. Clear targets time lines and measurable indicators wherever possible;
A progress monitoring and reporting framework that is aligned with the requirements ofSection 135 of the Companies Act 2013 and the CSR Rules.
In term of the provision of Section 197(12) of Act read with rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial personnel) Rules 2014 a statementshowing the names and other particulars of the employees drawing remuneration in excess ofthe limits set out in the said rules are annexed to this report as ANNEXURE VIII .
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. No complaints were received during the year 2014-15.
DIRECTORS RESPONSIBILITY STATEMENT :
Your directors confirm that :
1. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2. The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the Company for that period;
3. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. The directors had prepared the annual accounts on a going concern basis;
5. The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
6. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your directors gratefully acknowledge the support and co-operation extended to yourCompany by all the customers shareholders and bankers.
Your directors also place on record their appreciation of the tireless efforts of TeamAmarjothi a dedicated and loyal band of people who have displayed unswerving commitmentto their work in these challenging times and helped the Company deliver good results.
MAY LORD VENKATESWARA SHOWER HIS BLESSINGS FOR THE CONTINUED PROSPERTIY OF THE COMPANY.
| || ||By Order of the Board |
|Place : Tirupur ||(Sd/-) N. RAJAN ||(Sd/-) R. PREMCHANDER |
|Date : 30.07.2015 ||Chairman ||Managing Director |