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Shiva Texyarn Ltd.

BSE: 511108 Sector: Industrials
NSE: SHIVTEX ISIN Code: INE705C01012
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VOLUME 1674
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P/E 37.72
Mkt Cap.(Rs cr) 783
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OPEN 364.00
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VOLUME 1674
52-Week high 410.00
52-Week low 162.15
P/E 37.72
Mkt Cap.(Rs cr) 783
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shiva Texyarn Ltd. (SHIVTEX) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Thirty fifth Annual Report together withAudited Financial Statements of the Company for the year ended 31st March 2016.

FINANCIAL RESULTS Financial Year
( Rs. in lakhs)
2015-2016 2014-2015
Profit before Interest and Depreciation 5512.90 5506.15
Less: Interest 2348.96 2546.92
Profit before Depreciation 3163.94 2959.23
Less: Depreciation 1709.40 1687.01
Profit before Tax 1454.54 1272.22
Less : Provision for Income Tax
- Current Tax 294.51 165.54
- Deferred tax Liability (Net) 75.43 217.32
Profit after Tax 1084.60 889.36
Add : Surplus brought forward from last year 322.34 444.24
Amount available for appropriation 1406.94 1333.60
Appropriations :
Provision for Equity Dividend 237.65 216.05
Provision for Tax on Dividend 50.95 45.21
Transfer to General Reserve 750.00 750.00
Surplus carried over to Balance Sheet 368.34 322.34
Total 1406.94 1333.60

Dividend

Your Directors are glad to recommend payment of Dividend @ Rs. 1.10/- per equity shareof Rs. 10/- each (@ 11% of the paid up capital). (Last year Rs. 1.00/- per share of Rs.10/- each). The Dividend on Equity Shares together with Distribution Tax on CorporateDividend will absorb Rs. 288.60 lakhs ( Rs. 261.26 lakhs).

REVIEW OF OPERATIONS

During the year under review the two spinning units together produced 19162.81 tonnes(18756.53 tonnes) of yarn of which 3392.26 tonnes (2382.88 tonnes) was used to produceknitted fabrics. The spinning units in aggregate sold 15954.95 tonnes (16123.67 tonnes)of yarn and 3200.54 tonnes (2369.50 tonnes) of knitted fabrics out of which exportsaccounted for 4194.37 tonnes (3223.09 tonnes). Further during the year under review theCompany sold 5554.76 tonnes (5362.98 tonnes) of waste cotton of which exports accountedfor 982.51 tonnes (1005.15 tonnes). The Wind Mills with aggregate installed capacity of28.795 MW generated 279.15 lakh units of Wind Electricity as against 364.21 lakh units inthe last year. The entire power generated by Wind Mills was utilized for captiveconsumption at the textile mills. As in the previous years generation from windmills wasseverely affected due to non-evacuation of Wind power by TANGEDCO during the current yearalso resulting in loss of generation of about 71.70 lakh units (56.56 lakh units) havingadverse effect on profits of the Company by about Rs. 455.27 lakhs ( Rs. 359.15 lakhs). a.Your Directors report that though the Spinning Units achieved higher level of productionand sales the profitability was affected due to fall in price of finished goods (Yarn andFabric) on account of competition in both domestic and export markets which witnessedsubdued demand. The reduced offtake of yarn and fabric by China the World's largestimporter was one of the primary reasons for the glut in cotton textile industry.Consequently the performance of the spinning units remained more or less unchanged duringthe year. b. Tamil Nadu Generation and Distribution Company Limited (TANGEDCO) continuedtheir measures of restriction and control on evacuation of power generated by Wind Millsby which the Company was forced to utilise power purchased from third parties incurringhigher cost. Inspite of these difficulties the Company achieved optimum utilisation andproductivity in the spinning units without resulting in any curtailment of production. c.The operations of the processing unit at SIPCOT Perundurai stabilized during the yearunder review and served as captive source to the Technical Textile Division. Theinitiatives taken by the Company on Technical Textile products started yielding resultswith more and more orders being booked in the field of Defense Medical and otherindustrial applications. The Company also started supplying home textile products to M/s.Ikiya Distribution Services a world renowned Company in the field of home textiles andfurnishing materials.

The overall sales turnover of the Company from all divisions aggregated to Rs. 44208.44Lakhs (Rs. 45745.71 Lakhs) of which exports including Merchant exports amounted to Rs.9524.85 Lakhs (Rs. 9248.26 Lakhs) the exports contributing 21.55% (20.22%) of the overallsales of the Company.

PROSPECTS FOR THE CURRENT YEAR

With domestic demand likely to pick up due to improvement in economic conditions andexport demand likely to pick up upon resumption of import of yarn and fabric by China theprospects for the spinning units appear to be stable. The contribution from Windmills onoverall performance of the textile mills is dependent on availability of Wind of adequatevelocity and during the current year TANGEDCO has committed to evacuate the wind powerwith minimum back out. The contribution from Technical Textile products is likely toimprove significantly in the coming years. The Processing Bag and Garments divisions arealso expected to contribute to the overall earnings and profits of the Company in theensuing years.

EVENT 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.

PUBLIC DEPOSITS

The Company has not accepted any public deposits within the meaning of Section 73 to 76of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the year under review.

DEMERGER OF THE COMPANY

The Company has proposed to demerge the Textile Undertaking comprising of Spinning UnitI situate at Velvarkottai Dindigul District along with the related windmills into aseparate Company. The appointed date fixed for demerger is 1st April 2015. The scheme ofarrangement (Demerger) is subject to approval of Stock Exchanges Shareholders and theHon'ble High Court of Madras.

The Stock Exchanges both BSE Limited and National Stock Exchange of India Limited haveaccorded their no objection for the Scheme of Arrangement (Demerger) vide theirdt.18.3.2016. The Hon'ble High Court of Madras by their Order dated 18.4.2016 has orderedfor a meeting of Shareholders to approve the Scheme.

CORPORATE GOVERNANCE

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 Auditors of the Company regarding Compliance withconditions of Corporate Governance as stipulated under Regulation 34(3) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015which forms part of this Annual Report.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31st March 2016 pursuant to the sub-section (3)of Section 92 of the Companies Act 2013 which forms part of the report in Form MGT - 9 isenclosed as Annexure - I.

DIRECTORS

During the period under review there was no change in the Board of Directors.

Sri S V Arumugam Director (DIN 00002458) is required to retire by rotation at theensuing 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 :

Sri S V Alagappan Managing Director
Sri S Seshadri Chief Financial Officer
Smt M Shyamala Company Secretary

AUDIT COMMITTEE

The Audit Committee comprises of :

1. Sri K N V Ramani Chairman (Non- Executive Independent Director)
2. Sri C S K Prabhu Member (Non- Executive Independent Director)
3. Sri S K Sundararaman Member (Executive Director) and
4. 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 and performanceof the individual Directors as well as the Committees of Directors.

BOARD MEETINGS

During the year under review five 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 behaviour actual or suspected fraud or violation of theCompany's code of conduct or ethics. The policy has been posted in the website of theCompany viz. www.shivatex.co.in.

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 sufficientto attract 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 related party transactions that were entered into during the financial year in theordinary course of business were on arm's length basis. Hence provisions of Section 188 ofthe Companies Act 2013 are not attracted. Further no materially significant related partytransactions were made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the Company atlarge. Hence reporting under AOC-2 is not required. Approval of Audit Committee wasobtained for transactions of repetitive nature on annual basis. All related partytransactions are placed before the Audit Committee and Board of Directors for theirreview. The policy on Related Party Transactions is available in the websitewww.shivatex.co.in.

SUBSIDIARY

The Company has one subsidiary viz. STYL Textile Ventures Limited. The statementpursuant to Section 129 (3) of the Companies Act 2013 containing the salient features ofthe financial statements of Subsidiary Company forms part of this Annual Report.

A separate statement containing the salient features of the Financial Statements of theSubsidiary in Form AOC-1 (Part A) is furnished :

AOC-1

Part "A" - Subsidiaries

Statement pursuant to Section 129(3) of the Companies Act 2013 related to Subsidiary

Name of the Subsidiary STYL Textile Ventures Limited
Reporting period for the subsidiary concerned if different from the holding company's reporting period -
Reporting currency and exchange rate as on the last date of the relevant Financial Year in the case of Foreign subsidiaries -
Share capital 500000
Reserves and surplus -
Total assets 1764120
Total liabilities 1764120
Investments -
Turnover -
Profit before taxation -
Provision for taxation -
Profit after taxation -
Proposed Dividend -
% of shareholding 100%

1. Names of subsidiaries which are yet to commence operations: STYL Textile VenturesLimited

2. Names of subsidiaries which have been liquidated or sold during the year: Nil

3. The Company does not have any Joint Venture and / or associate companies. Hence noreporting of the same in AOC - 1 (Part B) is made.

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 consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period; c) Your Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) Your Directors have prepared the annualaccounts on a going concern basis; e) Your Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and f) Your Directors have devised proper systemto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

AUDITORS

The present Auditors of the Company M/s V K S Aiyer & Co Chartered AccountantsCoimbatore were appointed for a term of 3 years pursuant to the resolution passed by themembers at the Annual General Meeting held on 25th August 2014. A resolution ratifyingtheir appointment in terms of Section 139 is also placed before the shareholders for theirapproval at the ensuing Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedMr R Dhanasekaran Practicing Company Secretary to undertake the Secretarial Audit of theCompany. The report is attached herewith as Annexure - II

No adverse qualifications/comments have been made in the said report by the PracticingCompany Secretary.

COST AUDITOR

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 have 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.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has an Internal Audit Department which monitorsand evaluates the efficiency and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. The scope and authority of the Internal Audit function is defined in theInternal Audit Manual. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman of the Audit Committee and to the Chairman & ManagingDirector.

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 Regulation 21 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasconstituted a Risk Management Committee. The Committee has developed a Risk ManagementPolicy and implemented the same. The details of the Committee and its terms of referenceare set out in the Corporate Governance Report forming part of the Boards Report. Atpresent the Company has not identified any element of risk which may threat the existenceof the Company.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted Corporate Social Responsibility Committee (CSR) whichshall recommend to the Board the activities to be undertaken by the Company as specifiedin Schedule 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 by the Board with effect from 21.5.2014 comprised of the following Directors.

1. Sri S V Alagappan - Managing Director

2. Sri S K Sundararaman - Executive Director

3. Dr K R Thillainathan - Independent Director The CSR activities and its relatedparticulars is enclosed as Annexure III

STATUTORY DISCLOSURES

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 2016 relating to Conservation ofEnergy 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 year ended 31st March 2016 isprovided as

Annexure V to this report.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review the human relations continued to be very cordial. TheBoard of Directors wishes to acknowledge the contribution of the employees at all levelsof the organisation.

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. 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 complaints fordisposal during the year.

ACKNOWLEDGEMENT

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 continued good performance of your company.

By Order of the Board
Coimbatore
S V ALAGAPPAN
25th May 2016
CHAIRMAN AND MANAGING DIRECTOR
(DIN 00002450)

ANNEXURE II

FORM NO. MR - 3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014] To The Members ShivaTexyarn Limited CIN : L65921TZ1980PLC000945 252 Mettupalayam Road Coimbatore 641 043 Ihave conducted the secretarial audit of the compliance of applicable statutory provisionsand the adherence to good corporate practices by Shiva Texyarn Limited (hereinafter calledthe Company). Secretarial Audit was conducted in a manner that provided me a reasonablebasis for evaluating the corporate conducts/statutory compliances and expressing myopinion thereon. Based on my verification of the books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on 31st March 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance-mechanism in place to the extent in the manner and subject to thereporting made hereinafter: I have examined the books papers minute books forms andreturns filed and other records maintained by Shiva Texyarn Limited ("TheCompany") for the financial year ended on 31st March 2016) ('Audit Period') accordingto the provisions of : i. The Companies Act 2013 (the Act) and the Rules made thereunder;ii. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the Rules madethereunder; iii. The Depositories Act 1996 and the Regulations and Bye-laws framedthereunder; iv. Foreign Exchange Management Act 1999 and the Rules and Regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings; v. The following Regulations and Guidelines prescribedunder the Securities and Exchange Board of India Act 1992 ('SEBI Act') to the extentapplicable to the Company;

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers)Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not applicable to the Company during the Audit Period);d. The Securities and Exchange Board of India (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines 1999;

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

f. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not applicable to the Company during the Audit Period); and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(Not applicable to the Company during the Audit Period); vi The following other lawsspecifically applicable to the company :

a) Additional Duties of Excise (Textiles and Textile Articles) Act 1978

b) Textile Committee Act 1963 c) Textiles (Development and Regulation) order 2001

d) Textiles (Consumer Protection) Regulation 1985 I have also examined compliance withthe applicable clauses of the following:

i) Secretarial Standards issued by The Institute of Company Secretaries of India.

ii) The Listing Agreements entered into by the Company with the BSE Limited NationalStock Exchange of India Limited.

I report that during the period under review the Company has complied with theprovisions of the Act Rules Regulations Guidelines Standards Listing Agreements etcmentioned above.

I further report that based on the information provided by the Company its officersand authorised representatives during the conduct of the audit and also on the review ofperiodical compliance reports by respective department heads/company secretary/CFO takenon record by the Board of Directors of the Company in my opinion adequate systems andprocess and control mechanism exist in the Company to monitor and ensure compliance withapplicable financial/general laws like direct and indirect tax laws labour laws andenvironmental laws.

I further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act. Adequatenotice is given to all directors to schedule the Board Meetings agenda and detailed noteson agenda were sent atleast seven days in advance and a system exists for seeking andobtaining further information and clarifications on the agenda items before the meetingand for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are carried out unanimously asrecorded in the minutes of the meetings of the Board of Directors or Committee of theBoard as the case may be.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines. I further report that during theaudit period :The company has not taken any events/actions having a major bearing on thecompany's affairs in pursuance of the above referred laws rules regulations guidelinesstandards etc.

R DHANASEKARAN
Coimbatore Company Secretary in Parctice
25th May 2016
FCS 7070 / CP 7745

ANNEXURE III

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. A Brief outline of the Company's CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programs.

CSR Policy - Approved by the Board of Directors and applicable from 14.8.2014

Present Activities: v Shiva Texyarn Limited adopts Government Schools located at aroundfactory and support construction of class rooms water tanks laboratory and other basicamenities to students. Provide teachers to the schools adopts by the Company. v To provideEducation facility to economically backward people. v To provide Computer Training andorganize Skill development Program to Students and Teachers. v Weblink :www.shivatex.co.in

2. Composition of CSR Committee

Name of the member Designation

Sri S V Alagappan - Managing Director

Sri S K Sundararaman - Executive Director

Dr K R Thillainathan - Independent Director

3. Average net profit of the Company for last 3 financial years Rs. 173494419/-
4. Prescribed CSR expenditure (2% of the amount as in item 3 above) Rs. 3469888/-
5. Details of CSR spend during the financial year
a) Total amount to be spent for the financial year Rs. 3469888/-
b) Amount unspent if any Rs. 3269888/-

c) Manner in which the amount spent during the financial year is detailed below :

(in Rs.)
Projects/ Activities Sector Project / program locations Amount outlay (budget) project/ programwise Amount spent on the project/ program Cumulative expenditure upto the reporting period Amount spent: Direct or through implementing agency
1. Kodangipalayam School Government Kodangi palayam 50000 50000 50000 Direct
2 Wild Life Protection Private ACME Round Table Coimbatore 150000 150000 200000 Direct

Reason for not spending

Some of the projects which were to be executed with the participation of Governmentcould not be initiated for want of required approvals.

Responsibility Statement of the CSR Committee

The CSR Committee hereby confirms that the implementation and monitoring of CSRactivities are in compliance with CSR objectives and policy of the Company.

By Order of the Board
S V ALAGAPPAN
Coimbatore CHAIRMAN AND MANAGING DIRECTOR
25th May 2016
(DIN 00002450)

ANNEXURE - IV

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE

EARNINGS AND OUTGO

The information under 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 2016 is given herebelow and forms part of the Directors' Report.

A) CONSERVATION OF ENERGY

i) Steps taken or impact on conservation of energy;

v Energy Audit and conservation measure is being adopted periodically. v Link conermachine suction motor pressure optimization through closed loop method. v Blow room VXL CFfan suction level optimization through pipe line alteration. v Provision of LED light inplace of conventional tube lights. v Blow room VXL centrifugal motor pulley reduction for4 lines. v Air leakage arresting in pipe lines and machines in all departments. vAutoconer 338 suction fan retrofit funnel ring. v Fan motor 2.5 HP removed in Simplexmachines-Front roving stop motion provided. v Provision of electronic ballast instead ofcopper ballast in light fittings. v Automatic on/off control provided to stop Compressorunloading time. v Humidification plant angle reduced to conserve energy. ii) Steps takenby the company for utilizing alternate sources of energy;

v The company utilized solar energy for water heating. v The Wind Electricity producedby the Wind Mills owned by the Company. iii) Capital investment on energy conservationequipment;

v Investments for reduction of consumption of energy are being made after carefulevaluation of each proposal.

B) TECHNOLOGY ABSORPTION

i) the efforts made towards technology absorption;

Provision of individual energy meter in spinning machines for measuring energyconsumption. Digital air pressure meter provision in receiver tank for on line pressuremonitoring purpose.

ii) the benefits derived like product improvement cost reduction product developmentor import

substitution;

With the measures adopted by the company there is substantial saving in energyconsumption thereby reduction in cost of production.

iii) in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year) : Not applicable. iv) the Company has incurred anexpenditure of Rs. 1.40 lakhs towards Research and Development.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review foreign exchange earnings were Rs. 9202.56 lakhs (previousyear Rs. 8953.07 lakhs). Foreign exchange outgo was Rs. 4057.03 lakhs (previous year Rs.2450.33 lakhs)

By Order of the Board
Coimbatore S V ALAGAPPAN
25 May 2016 CHAIRMAN AND MANAGING DIRECTOR
(DIN 00002450)

ANNEXURE V

Disclosure in the Board's Report

Particulars of Remuneration of Directors and Employees pursuant to Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014

i) The Ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the Financial year 2015 -16

Director's Name Ratio
Sri S V Alagappan Managing Director 94.63 : 1

ii) The Percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the Financial Year 2015-16compared to 2014 -15 means part of the year.

Director's Name/CS/CFO % increase in remuneration
Sri S V Alagappan Managing Director 38.27
Sri S K Sundararaman Executive Director 7.17
Smt M Shyamala (CS) 49.85
Sri S Seshadri (CFO) 12.24

In respect of other Directors the Company is paying only sitting fees. Hence notconsidered for the above purposes.

iii) Percentage increase in the median remuneration of employees in the Financial Year 2015-16 22%
iv) Number of permanent employees on the rolls of the Company 2461
v) Explanation on the relationship between average increase in remuneration and the Company performancec The relationship between average increase in remuneration and the Company's performance are determined in the normal course of business and in line with the Standards & norms of the Industry.

vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against thePerformance of the Company

KMP's remuneration 2015-16 (Rs. in lakhs)

% increase / (Decrease) in KMPs remuneration (2015-16 against 2014-15)

Sales 2015-16 (Rs. in lakhs)

% increase in sales (2015-16 against 2014-15)

93.90

35.20%

44992.42

-3.30

vii) Variation in Market Capitalization of the Company price earnings ratio as at theclosing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of ListedCompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year :

Particulars As on 31.3.2015 As on 31.3.2016 Variations %
Market Capitalization ( Rs. crores ) 83.39 220.58 137.19 164.52
Price Earnings Ratio 9.37 20.34 10.97 117.07

 

Market quotation of the shares as on 31.3.2016 (NSE) Rs. 102.10/- per share of face value Rs.10/- per share
Market quotations of the shares when the Company came out with the last public offer Rights issue in 1995 at a price of Rs. 32/- per share of Face Value of Rs. 10/- each
Percentage increase/decrease over the 31.3.2015 - ( + ) 20.63%
market quotations of the Company 31.3.2016 - ( + ) 219.06%

viii) Average percentile increase already made in the salaries of Employees other thanManagerial Personnel in the last financial year and its comparison with the percentileincrease in managerial remuneration and justification thereof and point out if there areany exceptional circumstances for increase in the managerial remuneration.

The average percentile increase granted to employees other than managerial personnel is22% The percentile increase granted to managerial personnel is Nil ix) Comparison of eachremuneration of the Key Managerial Personal against performance of the Company.

Rs. ( in Lakhs)
Particulars MD CS CFO
Remuneration 76.76 5.96 11.17
Revenue 44992.42 44992.42 44992.42
Remuneration (as % of revenue) 0.17 0.01 0.02
Profit after tax (PAT) 1084.60 1084.60 1084.60
Remuneration (as % of PAT) 7.08 0.55 1.03

 

x) Key parameter for any variable component of remuneration availed by the Directors The Directors are not eligible for any variable compensation other than Commission payable to Managing Director
xi) Ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess the highest paid director during the yearc Since the remuneration of the highest paid employee is not in excess of the highest paid Director it is not applicable

xii) The Board of Directors of the Company affirm that the remuneration paid toDirectors Key Managerial Personnel and employees is as per the remuneration policyapproved by the Board of Directors of the Company. The statement of employees receivingremuneration not less than five lakh rupees per month :

Name S V Alagappan
Age 74
Designation Managing Director
Nature of Duties Manage the day to day affairs of the Company
Remuneration (Rs. in lakhs) 76.76
Qualification & Experience (years) B.Com. B.L. and more than 31 years of experience in Textiles / Business
Date of commencement of employment 27.6.2005
Last employment Bannari Amman Spinning Mills Limited
Name S K Sundararaman
Age 43
Designation Executive Director
Nature of Duties Manage the day to day affairs of the Company subject to the superintendence and control of Managing Director
Remuneration (Rs. in lakhs) 76.76
Qualification & Experience (years) MBA and more than 16 years of experience in Textiles / Business
Date of commencement of employment 15.5.2006
Last employment Bannari Amman Spinning Mills Limited

None of the employees listed in the said Annexure is relative of any Director of theCompany. None of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.

During Financial year 2016 the Company has 2461 employees.

By Order of the Board
S V ALAGAPPAN
Coimbatore CHAIRMAN AND MANAGING DIRECTOR
25th May 2016
(DIN 00002450)