Your Directors have pleasure in presenting the 27th Annual Report togetherwith audited accounts of the Company for the year ended 31st March 2017.
The sales include 11006.80 tonnes (12080.68 tonnes) by way of Export. The total yarnsales of this division amounted to '49587.71 Lakhs ('50170.72 Lakhs) of which export salesamounted to '22715.09 Lakhs ('23975.03 Lakhs) constituting 45.81% (47.79%) of the totalyarn sales.
The Weaving Division specializes in manufacturing wider width cotton fabric. During theyear under review 117.39 Lakh Metres (88.09 Lakh Metres) of Fabric were produced and112.50 Lakh Metres (91.20 Lakh Metres) of Fabric were sold.
During the year under review 6515.43 tonnes (5165.75 tonnes) of Knitted fabric wereproduced and 6341.31 tonnes (5092.95 tonnes) were sold. The total sales of this divisionamounts to '12291.71 Lakhs ('10580.38 Lakhs) of which export sales amounted to '6649.90Lakhs ('2845.66 Lakhs).
Processing and Technical Textiles Division
During the year under review 2967.82 tonnes (1655.67 tonnes) of fabric were processedand the total processing charges of this division amounts to '1166.00 Lakhs ('1393.58Lakhs) and 1236.55 tonnes (756.39 tonnes) of fabric were produced and 1137.57 tonnes(776.21 tonnes) of fabric were sold. The total fabric sales of this division amounts to'4711.83 Lakhs ('3034.86 Lakhs).
During the year under review '14.93 Lakhs ('12.86 Lakhs) pieces of Garments wereproduced and sold 13.58 Lakhs (10.19 Lakhs) pieces. The total sales of this divisionamounts to '2704.85 Lakhs ('3303.77 Lakhs) of which export sales amounted to '2611.12Lakhs ('3303.77 Lakhs).
The company has ventured into Retail Marketing under the brand name "BITZ"both innerwear and Garments catering to the need of kids and women.
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 583.71 Lakh units of power as against 343.38 Lakh units producedin the last year.
PROSPECTS FOR THE CURRENT YEAR
The yarn production in Spinning units is proposed to be increased to 90 tonnes per dayfrom the existing 75 tonnes per day by installing additional machinery in Preparatory andAutoconer sections without any increase in existing spindleage. Work on the project hasalready begun and is likely to be completed in the first quarter of the current year. Itis expected that the increased production coupled with better product mix will lead toimproved Profitability of the spinning units in the ensuing years. The contribution fromWindmills on overall performance of the textile mills is dependent on availability of Windof adequate velocity and during the current year also TANGEDCO has committed to evacuatethe wind power with minimum back out.
The new Garment unit which has became operational during the last financial year hasstabilized and it is expected to contribute to the performance of the Company in asignificant way during the current year. The Retail division of the Company set up underthe brand name "BITZ" has commenced operations and will be slowly expanded toTier I & II cities in the coming years as the demand for Apparel products is set toincrease due to changing consumer preference.
The other divisions of the Company viz. Weaving Home Textiles Knitting and Processinghave stabilized their operations and taking into consideration the above initiatives takenby the Company in Spinning Garment & Retail divisions the overall performance of theCompany is expected to improve during the current year.
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 provisions of Section 73 to 76of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 duringthe year under 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 Analysisalong with a certificate from the Statutory Auditors of the Company regarding complianceof conditions of Corporate Governance as stipulated under Regulation 34(3) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on Financial Year Ended on 31st March 2017pursuant 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.
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 is eligible for re appointment and seeks reappointment.
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 (KMP):
|Name of the KMP ||^^^"Designation |
|Sri S V Arumugam ||Managing Director |
|Sri C S Balakumar ||Chief Financial Officer |
|Sri N Krishnaraj ||Company Secretary |
AUDIT COMMITTEE AS PER SECTION 177 OF THE COMPANIES ACT 2013
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 held. The details of the samehave 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 to attractretain and motivate Directors of the quality required to run the Company successfully
b. Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and
c. Remuneration to Directors Key Managerial Personnel and senior management involves abalance between fixed and incentive pay reflecting short and long term performanceobjectives 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 and hence reporting in AOC 2 is notapplicable. Approval of Audit Committee was obtained for transactions of repetitive natureon annual basis. All related party transactions are placed before the Audit Committee andBoard of Directors for their review. The policy on Related Party Transactions is availablein the website 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.
Pursuant to the Provisions of Section 139 of Companies Act 2013 and Rules madethereunder the term of M/s.P.N.Raghavendra Rao & Co as the Statutory Auditors of theCompany will be concluded at the close of ensuing Annual General Meeting of the Company.
The Board of Directors places on record its appreciation to the services rendered byM/s.P.N.Raghavendra Rao & Co as the Statutory Auditors of the Company.
There is no audit qualification for the year under review.
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 on therecommendation of Audit Committee has appointed Sri M Nagarajan Cost AccountantCoimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year2017 2018. As required under the Companies Act 2013 a resolution seeking members'approval for the remuneration payable to the Cost Auditor forms part of the Noticeconvening Annual General Meeting.
JOINT VENTURE ASSOCIATES AND SUBSIDIARIES
The Company has two wholly owned subsidiaries viz. Abirami Amman Mills Private Limitedand Accel Apparel Private Limited and one Joint Venture Company viz. Young Brand ApparelPrivate Limited as on 31.3.2017. In accordance with the Section 129 (3) of the CompaniesAct 2013 the consolidated Financial Statements of the Company has been prepared whichforms part of the Annual Report. A separate statement containing the salient features ofthe Financial Statements of Subsidiaries and Joint Venture in Form AOC 1 (Part A & B)is furnished.
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 and Managing Director.
The Company has an Independent Internal Auditor and an Internal Audit Department whichmonitors and evaluates the efficiency and adequacy of internal control system in theCompany its compliance with operating systems accounting procedures and policies at alllocations 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 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 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 Committeeconsisting of the following Directors:
|1. Sri S V Arumugam ||Managing Director |
|2. Sri S Palaniswami ||Independent Director |
|3. Sri K Sadhasivam ||Independent Director |
The CSR activities and its related particulars is enclosed as Annexure III.
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 2017 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 2017 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 complaintsduring 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 |
| ||S V ARUMUGAM |
|Coimbatore ||Chairman & Managing Director |
|30th May 2017 ||DIN 00002458 |