Your Directors have pleasure in presenting the 25thAnnual Report together with auditedaccounts of the Company for the year ended 31 March 2015. st
FINANCIAL RESULTS :
(Rs. in Lakhs)
| ||2014-2015 ||2013-2014 |
|Profit before Depreciation ||4580.63 ||8105.12 |
|Less: Depreciation ||2666.24 ||3500.16 |
|Less : Taxes ||631.75 ||1448.15 |
|Less : Extra Ordinary Item (Net of Tax Expenses) ||- ||- |
|Profit after Tax ||1282.64 ||3156.81 |
|Surplus brought forward from last year ||1540.09 ||751.92 |
|Amount available for appropriation ||2822.73 ||3908.73 |
|Appropriations: || || |
|Provision for Equity Dividend ||236.31 ||315.09 |
|Provision for Tax on Dividend ||48.11 ||53.55 |
|Transfer to General Reserve ||1000.00 ||2000.00 |
|Surplus carried over to Balance Sheet ||1538.31 ||1540.09 |
|Total ||2822.73 ||3908.73 |
Your Directors are glad to recommend payment of dividend of Rs. 1.50/- per equity shareof 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 tothe previous year mainly due to lower off take of finished goods in the market. There isno change in the nature of Business of the Company.
During the year under review the Spinning Mills produced 22054.34 tonnes (20700.32tonnes) inclusive of purchased quantity 885.25 tonnes (1378.53 tonnes) of Yarn and sold20818.38 tonnes (21050.40 tonnes) of Yarn.
The sales include 11195.79 tonnes (10732.84 tonnes) by way of Export. The total salesof this division amounted to Rs. 48931.22 Lakhs (Rs. 52366.13 Lakhs) of which export salesamounted to Rs. 25398.85 Lakhs (Rs. 25454.37 Lakhs) constituting 51.91% (48.60%) of thetotal sales.
The Weaving Division specializes in manufacturing wider-width cotton fabric. During theyear under review 96.40 Lakh Metres (76.23 Lakh Metres) of Fabric were produced and 88.85Lakh Metres (71.59 Lakh Metres) of Fabric were sold.
During the year under review 3176.25 tonnes (1672.42 tonnes) of Knitted fabric wereproduced and 3224.01 tonnes (1529.40) tonnes were sold. The total sales of this divisionamounts 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 processedand the total processing charges of this division amounts to Rs. 614.62 Lakhs (Rs. 464.13lakhs).
During the year under review 9.10 lakhs (7.46 lakhs) pieces of Garments were producedand 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 lakhs).
Wind Mill Division
The company has 4 windmills of 1250 KW each totaling 5 MW in Radhapuram TalukTirunelveli District Tamilnadu 25 Nos windmills each of 800 KW capacity totaling 20 MWcapacity in Dharapuram Taluk Tirupur District and Palani Taluk Dindigul DistrictTamilnadu and 3 Windmills of 1650 KW each in Kongalnagaram Udumalpet Taluk TirupurDistrict Tamilnadu. The total installed capacity of Windmills is 29.95 MW and the wholeof 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 producedin the last year.
PROSPECTS FOR THE CURRENT YEAR
The parity between the cost of inputs and realization on finished products is expectedto be favorable. Installation of new machinery in value added divisions will increasebusiness volume and profit margin. Overall performance of your company is expected to besatisfactory.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
There are no material changes and commitments affecting the financial position of theCompany subsequent to the end of the Financial Year.
The company has no public deposits outstanding at the beginning of the year and theCompany has not accepted any deposits within the meaning of Section 73 to 76 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 during the yearunder review.
In line with requirements of Clause 49 of the Listing Agreement our Company iscommitted to the principles of good Corporate Governance and continues to adhere goodcorporate governance practices consistently.
A separate section on Corporate Governance Management Discussion and Analysisalongwith a certificate from the Auditors of the Company regarding compliance ofconditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreementforms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on Financial Year Ended on 31st March 2015pursuant to the sub-section (3) of Section 92 of the Companies Act 2013 and forming partof 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 from1.9.2014. She holds office upto the date of ensuing Annual General Meeting and beingeligible offers herself for re-appointment. Further Smt S Sihamani fulfills thecriteria required for being appointed as an Independent Director and recommended to beappointed as an Independent Director of the Company for a term of five consecutive yearsfrom date of the ensuing Annual General Meeting.
Sri S V Arumugam Managing Director (DIN 00002458) is required to retire by rotation atthe 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. TheBoard of Directors on the recommendation of Nomination and Remuneration Committee haveappointed him for a further period of 5 years and approved the remuneration payable tohim. Such appointment and payment of remuneration are subject to approval of shareholdersin the ensuing Annual General Meeting.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.
KEY MANAGERIAL PERSONNEL
The Company has appointed the following persons as Key Managerial Personnel during theyear.
|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 totime.
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement Independent Directors at their meeting without participation of non-independentdirectors and management considered and evaluated the Boards' performance performance ofthe Chairman and Managing Director.
The Board has carried out an annual evaluation of its own performance of theindividual directors as well as the Committees of Directors.
During the year under review four Board Meetings were conducted. The details of thesame have been given in the Corporate Governance Report of Clause 49 of the ListingAgreement forming part of this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees governed under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by Company aregiven in the notes to the financial statements.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism for Directors and employees to reportconcerns about unethical behavior actual or suspected fraud or violation of the Company'scode of conduct or ethics. The policy has been posted in the website of the Company:www.bannarimills.com.
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors have framed a policy setting out the framework for payment ofRemuneration to Directors Key Managerial Personnel and Senior Management Personnel of theCompany. The policy is explained as part of the Corporate Governance Report. The Committeeensures that a. The level and composition of remuneration is reasonable and sufficient toattract retain and motivate Directors of the quality required to run the Companysuccessfully b. Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and c. Remuneration to Directors Key Managerial Personnel andSenior Management involves a balance between fixed and incentive pay reflecting short andlong 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 inthe ordinary course of business and the prices were at arm's length basis Hence theprovisions of Section 188 of the Companies Act 2013 are not attracted. Further nomaterially significant related party transactions were made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have potentialconflict 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 annualbasis. All related party transactions are placed before the Audit Committee and Board ofDirectors for their review. The policy on Related Party Transactions is available in thewebsite www.bannarimills.com.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact 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 confirmthat:
a) Your Directors have followed in the preparation of the annual accounts theapplicable accounting standards with proper explanation relating to material departures;
b) Your Directors have 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 and loss of the Company for that period;
c) Your Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) Your Directors have prepared the annual accounts on a going concern basis;
e) Your Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) Your Directors have devised proper system to ensure compliance with the provisionsof 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. CharteredAccountants Coimbatore were appointed for a term of 3 years pursuant to the resolutionpassed by the members at the Annual General Meeting held on 25th August 2014. Aresolution ratifying their appointment in terms of Section 139 is also placed before theshareholders 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 hasappointed Mr R Dhanasekaran Practicing Company Secretary to undertake the SecretarialAudit of the Company. The report is annexed herewith as Annexure - II
No adverse qualifications/comments have been made in the said report by the PracticingCompany Secretary.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the Board of Directors onthe recommendation of Audit Committee has appointed Sri M Nagarajan Cost AccountantCoimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year2015 - 2016 with remuneration. As required under the Companies Act 2013 a resolutionseeking members' approval for the remuneration payable to the Cost Auditor forms part ofthe Notice convening Annual General Meeting.
During the year under review Abirami Amman Mills Private Limited ceased to be asubsidiary of your company. Further the policy determining 'material' subsidiary isavailable in the website www.bannarimills.com.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee & to theChairman & Managing Director.
The Company has an Internal Audit Department which monitors and evaluates theefficiency and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies at all locations of the Company.
Based on the report of internal audit function corrective actions are taken in therespective areas and thereby strengthen the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
STATEMENT ON RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act 2013 and Clause 49 of the ListingAgreement the Company has constituted a Risk Management Committee. The Committee hasdeveloped a Risk Management Policy and implemented the same. The details of the Committeeand its terms of reference are set out in the Corporate Governance Report forming part ofthe Boards Report. At present the Company has not identified any element of risk which maythreat the existence of the Company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted Corporate Social Responsibility Committee which shallrecommend to the Board the activities to be undertaken by the Company as specified inSchedule VII recommend the amount of expenditure to be incurred on such activities andmonitor the CSR policy of the Company. The Company has partially spent the amountstipulated under the requirements of the Act. Corporate Social Responsibility Committeeconstituted 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 III STATUTORYDISCLOSURES
I. Conservation of Energy and others - The particulars required to be included in termsof 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 toConservation of Energy etc. is enclosed as Annexure IV.
II. Remuneration of Directors and other details- The information required under Section197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and forming part of the Directors' Report for the yearended 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. TheCompany wishes to acknowledge the contribution of the employees at all levels of theorganisation.
The Company has placed an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints for sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The Company has not received any complaintsreceived for disposal off during the year.
Your Directors acknowledge with gratitude the timely assistance and help extended bythe Bankers for having provided the required bank facilities. Your Directors wish to placeon record their appreciation of the contributions made by the employees at all levels forthe excellent performance of your company.
| ||By Order of the Board |
|Coimbatore ||S V ARUMUGAM |
|30th May 2015 ||Chairman & Managing Director |