Your Directors have pleasure in presenting the 26thAnnual Report together with auditedaccounts of the Company for the year ended 31 March 2016. st
FINANCIAL RESULTS :
( Rs. in Lakhs)
| ||2015-2016 ||2014-2015 |
|Profit before Depreciation ||5653.56 ||4580.63 |
|Less : Depreciation ||2880.71 ||2666.24 |
|Less : Taxes ||917.81 ||631.75 |
|Less : Extra Ordinary Item (Net of Tax Expenses) ||- ||- |
|Profit after Tax ||1855.03 ||1282.64 |
|Surplus brought forward from last year ||1538.31 ||1540.09 |
|Amount available for appropriation ||3393.34 ||2822.73 |
|Appropriations: || || |
|Provision for Equity Dividend ||252.07 ||236.31 |
|Provision for Tax on Dividend ||51.31 ||48.11 |
|Transfer to General Reserve ||1000.00 ||1000.00 |
|Surplus carried over to Balance Sheet ||2089.95 ||1538.31 |
|Total ||3393.34 ||2822.73 |
Your Directors are glad to recommend payment of dividend of Rs. 1.60/- per equity shareof Rs. 10/- each to the equity shareholders (@ 16% of the paid up capital).
REVIEW OF OPERATIONS
There is no change in the nature of business of the Company. The overall turnover ofthe Company has increased by 13.22% in turnover as compared to the previous year mainlydue to higher takeoff of finished goods in the market.
During the year under review the Spinning Mills produced 27108.36 tonnes (22054.34tonnes) inclusive of purchased quantity 2570.55 tonnes (885.25 tonnes) of Yarn and sold25144.14 tonnes (20818.38 tonnes) of Yarn.
The sales include 12080.68 tonnes (11195.79 tonnes) by way of Export. The total yarnsales of this division amounted to Rs. 50170.72 Lakhs ( Rs. 48931.22 Lakhs) of whichexport sales amounted to Rs. 23975.03 Lakhs ( Rs. 25398.85 Lakhs) constituting 47.79%(51.91%) of the total yarn sales.
The Weaving Division specializes in manufacturing wider-width cotton fabric. During theyear under review 88.09 Lakh metres (96.40 Lakh Metres) of Fabric were produced and 91.20Lakh Metres (88.85 Lakh Metres) of Fabric were sold.
During the year under review 5165.75 tonnes (3176.25 tonnes) of Knitted fabric wereproduced and 5092.95 tonnes (3224.01) tonnes were sold. The total sales of this divisionamounts to Rs. 10580.38 Lakhs ( Rs. 7367.93Lakhs) of which export sales amounted to Rs.2845.66 Lakhs ( Rs. 1370.13 Lakhs).
Processing and Technical Textiles Division
During the year under review 1655.67 tonnes (768.54 tonnes) of fabrics were processedand the total processing charges of this division amounts to Rs. 1393.58 Lakhs ( Rs.614.62 Lakhs) and 756.39 tonnes (Nil) of fabrics were produced and 776.21 tonnes (Nil) offabrics were sold. The total fabric sales of this division amounts to Rs. 3034.86Lakhs(Nil).
During the year under review 12.86 Lakhs (9.10 Lakhs) pieces of Garments were producedand sold 10.19 Lakhs (8.68 Lakhs) pieces. The total sales of this division amounts to Rs.3303.77 Lakhs ( Rs. 3572.56 Lakhs) of which export sales amounted to Rs. 3303.77 Lakhs (Rs. 3533.38 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 Units and Weaving Unit.
The windmills produced 343.38 Lakh units of power as against 449.40 Lakh units producedin the last year.
PROSPECTS FOR THE CURRENT YEAR
During the current year a new Garments project near Palladam Tirupur DistrictTamilnadu has become operational. The results of the same are expected to be reflected inthe current Financial Year. Further with the promised evacuation of wind energy byTANGEDCO to the maximum possible extent wind energy contribution will increasesignificantly.
Considering the above the overall performance of the 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 the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company is committed to the principles of good Corporate Governanceand continues to adhere good corporate governance practices consistently.
A separate section is given on Corporate Governance Management Discussion and Analysisalongwith a certificate from the Statutory Auditors of the Company regarding compliance ofconditions of Corporate Governance as stipulated under Regulation 34(3) read with ScheduleV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formspart of this Annual Report.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on Financial Year Ended on 31March 2016 pursuantto the st sub-section (3) of Section 92 of the Companies Act 2013 and forming part of thereport in Form MGT - 9 is enclosed as Annexure - I
During the period under review there were no change in the Board of Directors.
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.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013.
KEY MANAGERIAL PERSONNEL
The Company has appointed the following persons as Key Managerial Personnel :
|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 Regulation 17 (10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 IndependentDirectors at their meeting without participation of non Independent Directors andmanagement considered and evaluated the Boards' performance performance of the Chairmanand Managing Director.
The Board has carried out an annual evaluation of its own performance of the individualDirectors 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 under Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forming part of thisReport.
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 year2016 - 2017 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.
JOINT VENTURE AND ASSOCIATE
We have one Joint Venture Company and one Associate Company as on 31 March 2016. In staccordance with the Section 129 (3) of the Companies Act 2013 the Consolidated FinancialStatements of the Company has been prepared which forms part of the Annual Report. Aseparate statement containing the salient features of the Financial Statements of theJoint Venture/Associate in Form AOC-1 (Part - B) is furnished :