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Rajapalayam Mills Ltd.

BSE: 532503 Sector: Industrials
BSE 00:00 | 19 Aug 860.05 3.90






NSE 05:30 | 01 Jan Rajapalayam Mills Ltd
OPEN 860.00
52-Week high 1398.00
52-Week low 700.00
P/E 21.42
Mkt Cap.(Rs cr) 741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 860.00
CLOSE 856.15
52-Week high 1398.00
52-Week low 700.00
P/E 21.42
Mkt Cap.(Rs cr) 741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rajapalayam Mills Ltd. (RAJPALAYAM) - Director Report

Company director report


Your Directors have pleasure in presenting their 86th Annual Report and the AuditedAccounts of the Company for the year ended 31st March 2022.


The financial results for the year ended 31st March 2022 after charging all expensesbut before deducting finance cost and depreciation have resulted in operating profit(EBITDA) of $ 14423.04 Lakhs against $ 5652.54 Lakhs for the previous financial year2020-21. Summary of Separate Financial Results of the Company is furnished below:

($ in Lakhs)
Financial Results Separate Year ended 31-03-2022 Financials Year ended 31-03-2021
Revenue 70525.97 42912.19
Operating Profit : Profit before Interest Depreciation and Tax (EBIDTA) 14423.04 5652.54
Less: Interest 4295.82 4448.33
Profit before Depreciation and Tax (PBDT) 10127.22 1204.21
Less: Depreciation 5048.43 4759.90
Profit before Exceptional Items 5078.79 (3555.69)
Exceptional Items 2586.77 (276.15)
Profit Before Tax 7665.56 (3831.84)
Less: Tax Expenses
Current Tax 15.20
Withdrawal of MAT Credit relating to earlier years 3273.11
Deferred Tax Expenses / (Savings) 549.33 (1168.48)
Profit after Tax 3827.92 (2663.36)
Other Comprehensive Income for the Year (Net of Tax) 16.36 72.69
Total Comprehensive Income for the Year (TCI) 3844.28 (2590.67)


The Paid-up Capital of the Company is $ 860.55 Lakhs (PY: $ 737.62 Lakhs) consisting of8605520 Shares of $ 10/- each.


The Company in order to fund various capex proposals had raised Equity Shares for anamount of $ 69.95 Crores by way of Rights Issue in the ratio of 1:6 (1 Rights Share forevery 6 Equity Shares held by Shareholders). The issue was opened on 15-03-2021 and closedon 30-03-2021 with 115% subscription. The Company had made allotment of Equity Sharesraised through Rights Issue on 9th April 2021 and the Shares have been approved fortrading by BSE Limited with effect from 15-04-2021. There is no deviation or variation inthe use of proceeds of the Rights Issue from the objects stated in the Letter of Offerdated 27-02-2021 and the proceeds have been fully utilized for the objects as stated inthe Offer Document.


Your Directors have pleasure in recommending a Dividend of $ 1 per share (PY: $ 0.50per share). The total amount of Dividend outgo for the year will be $ 86.06 Lakhs. As perIncome Tax 1961 the dividend will be taxable in the hands of the Shareholders and theCompany will make the payment of dividend after deducting applicable TDS. The distributionof dividend works out to 2% of Net Profit after tax for the financial year 2021-22.

As per the "Dividend Distribution Policy" of the Company it shall strive todistribute atleast 5% of the post-tax profit as Dividend in each financial year. TheCompany proposes a Dividend payout at 2% of the Net Profit after tax in order to conservecash for meeting margin money for its ongoing projects and to fund the incremental workingcapital requirements caused by wide fluctuation in the cotton and yarn prices. TheDividend Distribution Policy is available on the website of the Company under web link


After appropriations a sum of $ 631.79 Lakhs (PY: NIL) has been transferred to GeneralReserve for the financial year 2021-22. As on 31-03-2022 the General Reserve stands at $25000.00 Lakhs.


The Company has opted to pay tax under Section 115BAA of the Income Tax Act ('New TaxRegime') with effect from the Assessment Year 2021-22 (effective last FY 2020-21). TheCompany has provided an amount of $ 15.20 Lakhs (PY: NIL) towards Current Tax underSection 115BAA and Deferred Tax of $ 549.33 Lakhs (PY: withdrawal of $ 1168.48 Lakhs) hasbeen provided for the financial year 2021-22.

The Company is having an amount of $ 3273.11 Lakhs as MAT credit entitlement in itsbooks as on 31-03-2021. Since the Company has opted to pay tax under the New Tax Regimethe Company is not eligible to carry forward the MAT credit available as per Section115JAA of the Income Tax Act. Hence the MAT credit of $ 3273.11 Lakhs has been writtenoff and debited to Statement of Profit and Loss during the financial year 2021-22.




In India the opening stock of cotton for the current cotton season 2021-22 (October toSeptember) was at 75 Lakhs Bales which is lower by 37% as compared to last year openingstock of 120 Lakhs Bales. The Cotton Association of India has estimated the Indian CottonCrop for the cotton season 2021-22 at 335 Lakhs Bales as compared to 360 Lakhs Bales oflast cotton season which is lower by 7%. The lower opening stock coupled with lowerproduction estimate of cotton during the current cotton crop season has pushed-up thecotton prices in upward trend. The cotton price has increased from $ 60000/- to more than$ 100000/- per candy within a period of 6 months from the beginning of the cottonseason. The Government of India has imposed duty on all varieties of imported cottonduring February 2021 and this made imported cotton dearer by 11% for Indian SpinningMills; however the Government of India has withdrawn the import duty effective 14thApril 2022 till 30th September 2022.

Due to lower production of long stable imported cotton the prices of some of theimported cotton varieties had also increased very steeply. The price of medium stablefibres has increased by more than 40% and in case of long stable fibre it has increasedby more than 70%.

Since the Company is focusing to produce more value added counts and in order to meetthe quality requirement of value added counts more volume high quality imported cottonhas been procured when the prices were at reasonable level. The imported cottonconsumption for the financial year 2021-22 has been increased by 56% as compared to lastfinancial year. This strategy has helped the Company to procure diversified varieties ofcotton across the globe and to quote competitive prices for our yarn which helped toimprove the operating margin in the financial year 2021-22.


The production volume of yarn has increased to 136.36 Lakhs Kgs during the financialyear 2021-22 as against 110.52 Lakhs Kgs of last year registering a growth of 23%. Theincrease in production was due to full utilization of machineries made during thefinancial year 2021-22.


The Company's focus on new product development innovation and cost-effectiveproduction has started yielding results. The sale volume for the FY 2021-22 stood at133.75 Lakh Kgs as compared to 121.99 Lakh Kgs of last year registering a growth of 10%.The Company was able to achieve growth in sale volume mainly due to full utilization ofmachineries and good demand for yarn both in domestic and export markets. The sale valueof yarn has increased to $ 550.09 Crores during the FY 2021-22 as compared to $ 362.95Crores of last year registering a growth of 52%. The yarn market in India has bouncedback after witnessing a slowdown in the last 2 years. Due to geopolitical factors likebanning of imports from China by United States and disruption in supply of textiles andapparel products to countries across the world by China due to shortage of electricity intheir country boosted the demand for textile products including yarn manufactured inIndia.

The Company's quality of yarn in value added segment has been well appreciated by thecustomers and the Company is receiving good volume of orders for value added counts. Thesale volume of value added yarn viz. Elitwist Gassing High twist Melange Core yarnand Mercerized yarn has increased to 2217 Tonnes during the FY 2021-22 (PY: 1159Tonnes) registering a growth of 91%. The Company is taking various steps to expand itsmarket presence both in domestic and international markets and hope to achieve highervolume of sales in value added yarns in the forthcoming years.


The Company has made export of Cotton Yarn (including merchant exports) for a value of

$ 187.04 Crores as against $ 106.75 Crores of the previous year registering a growthof 61%.

In addition to growth of export in our regular International Markets the sales volumehas grown considerably in new markets viz. Turkey Portugal etc.

Your Directors are thankful to M/s. Asahi Kasei Advance Corporation M/s. Doko SpinningCo. Ltd. and M/s. Unitika Ltd. Japan for their continued support and efforts forpromotion of exports to Japan.


Fabric Unit commissioned during FY 2020-21 is successfully running with the capacity of146 Looms. The division was able to maintain optimum utilization level throughout theFinancial Year 2021-22.

The Fabric Unit is producing special value added fabric especially from its JacquardLooms and the quality is well appreciated by the customers in Export Market. The Fabricunit has produced

79 Lakhs Meters of Fabric (PY: 39 Lakhs Meters) and sold 91 Lakhs Meters of Fabrics(PY: 41 Lakhs Meters) registering a growth of 122%. Total Revenue generated by Fabricunit for the financial year 2021-22 was $ 121.95 Crores (PY: $ 38.67 Crores) registeringa growth of 215%. Export Turnover of Fabric for the financial year 2021-22 was $ 30.72Crores (PY: $ 11.47 Crores) registering a growth of 168%.


During the financial year 2021-22 the Company was able to consume power from its ownwind farms to the extent of 58% (PY: 65%) of total power requirement. The power cost hasincreased during the financial year 2021-22 to $ 39.79 Crores as compared to $ 26.91Crores incurred during previous year due to increased level of utilization ofmachineries.


The Finance cost has decreased to $ 42.96 Crores during the financial year 2021-22 from

$ 44.48 Crores of previous financial year inspite of additional borrowings for ourmodernization and expansion projects. Various measures announced by RBI to reduce theinterest cost in order to support the economic growth of the Country has helped theCompany to minimize the cost of borrowing.


During the financial year 2021-22 the Company has received dividend income of

$ 2.25 Crores (PY: $ 13.01 Crores) and the particulars of dividend received areprovided under Note No.51 (a) (viii).


Pursuant to Schedule V(B) of SEBI (LODR) Regulations 2015 the Key Financial Ratiosfor the Financial Year 2021-22 are given below:

S.No. Particulars 31-03-2022 31-03-2021 Formula adopted
1 Debtors Turnover Ratio (Days) 48 56 365 Days / (Net Revenue / Average Trade Receivables)
2 Inventory Turnover Ratio (Days) 100 123 365 Days / (Net Revenue / Average Inventories)
3 Interest Coverage Ratio 2.66 0.14 (Profit Before Tax + Interest)/ (Interest + Interest Capitalised)
4 Current Ratio 1.08 0.94 Current Assets / (Total Current Liabilities - Other Financial Liabilities
- Current maturities of Long Term Debt)
5 Debt - Equity Ratio 1.96 2.28 Total Debt / Total Equity
6 Operating Profit Margin 20% 13% EBITDA / Net Revenue
7 Net Profit Margin 5% (-) 6% Net Profit / Net Revenue
8 Return on Net worth 12% (-) 9% Total Comprehensive Income /
Average Net worth
9 Total Debt / EBITDA 4.86 11.50 Total Debt / EBITDA
10 Return on Capital Employed 8% 2% (TCI + Interest)/ (Average of Equity plus Total Debt)
11 Price Earnings Ratio 21 (-) 23 Market Price per share as at 31st March / Earning per share

Notes: a) For serial no. 3678910 and 11 there have been significant change (ie.25% or more) in the ratios as compared to the previous financial year. The favourablechange in the ratio during the current year is due to increase in Profit on account ofgood demand for yarn and increased production of value added counts.

b) EBITDA denotes Profit Before Tax + Interest + Depreciation


As a part of continuous thrust on modernization programme the Company has replaced allthe old Open End Spinning Machines with most modern fully automatic OE Machines at a costof $ 45 Crores. The installation of all machines has been completed on 30-04-2021 and fullbenefit of this modernization has helped the Company to achieve better results in FY2021-22. In addition to this the Company has also invested an amount of $ 20.69 Crores(PY: $ 13 Crores) in modernizing other textile machinery & equipment.

The Company has also installed second line of yarn mercerizing machineries and the samewas commissioned during September 2021.

In order to take advantage of the current higher demand for yarn the Company hasimplemented the expansion of spinning capacity by adding 18144 spindles in Rajapalayam byutilizing the existing building space and this project was commissioned during March2022.

The Company has also added 24 Airjet Jacquard Looms which increased the existing loomscapacity from 122 Looms to 146 Looms in the existing loom-shed without incurring anyadditional construction cost. All the new 24 Jacquard Looms were commissioned duringMarch 2022. Another

8 Nos. of Jacquard looms will be received and installed during June 2022.

Total capital expenditure spent by the Company during the FY 2021-22 including theabove projects was $ 155.14 Crores which has been funded from proceeds of Rights Issueinternal accruals and term loan from Banks.


The quality of fabric produced by the Company has been well accepted both in domesticand export markets and the Company receives lot of enquiries from leading brands acrossthe globe for supply of processed fabric. Since the demand for our quality fabric is verymuch encouraging the Company has decided to further expand its Fabric division by adding166 Looms and also decided to establish a new Fabric processing unit with a capacity toprocess 50000 meters of fabric per day at Rajapalayam. In order to strengthen theelectrical infrastructure the Company has decided to install 110 KVA /

11 KVA own substation inside our Mills premises at Rajapalayam.

Total outlay for all the above capex proposals is $ 400 Crores which will be fundedfrom internal accruals / equity instruments and term loan from Banks.


The prices of all varieties of cotton are ruling at all-time high. Since the prices aregoing up farmers are bringing the cotton crop at a very slow pace into the market. Themultinational companies which are holding cotton stock are also selling the ginned cottonbales very slowly. Because of the high prices of cotton the demand for alternate fibresviz. polyster and viscose is showing an increasing trend. There may be correction in thecotton prices if the demand and consumption of cotton comes down due to increasedconsumption of manmade fibres by spinning mills and fabric manufacturers. In addition tocotton all other commodity prices are also going up including fuel metal etc. whichwill have an inflationary effect on cost of production of yarn.

Retail sales of textile products across the globe is witnessing a robust trend. Due tothe effects of pent up demand and increased spending by the consumers the global demandfor cotton yarn fabric and garments are on the rising trend. India is becoming a strongalternative sourcing base to China for textile products. The recent trade agreementsentered into between India and other countries like UAE and Australia will further boostthe demand for Indian textile products in the export market in the forthcoming years.

The Company has reshaped itself to a better position by strengthening its product lineswith more value added customized yarn counts viz. Mercerized Yarn Melange Yarn Core Yarnetc. to take full advantage of the current market trend. The Company is continuouslymonitoring various process parameters and also implementing various system controls todeliver consistent quality of yarn and fabric to the end customers and leading brands. TheCompany has also strengthened the product lines with more automation like fully automaticcontamination removal system at blow room stage 100% ring spindle monitoring systeminstallation of linkconers etc. which has resulted in overall improvement in the operatingefficiency of the Company. Efforts are being taken continuously to scale up the production& sale of value added counts like M?lange yarn Mercerized yarn core spun yarn etc.which will replace commodity counts in the forthcoming years.

Some of the research and prediction modelling study conducted by leading Institutes inIndia suggests that there may be a possibility of fourth wave of the COVID-19 pandemic inIndia which may pose a challenge; however the Company is continuously following the SoPsto safeguard its employees from spreading of COVID-19.


The Company has wind mills with installed capacity of 35.15 MW for its captive powerconsumption.

The wind farm has generated 589 Lakhs Kwh as compared to 564 Lakhs Kwh of the previousyear. The wind availability / velocity was better during initial wind season of thefinancial year 2021-22 as compared to the last financial year. All the Units generated bywind mills were adjusted for captive consumption at our Mills. The income during the yearfrom the Wind Mill Division was

$ 39.27 Crores as against $ 37.59 Crores of previous year.


The Company has three Associate Companies viz. M/s. The Ramco Cements Limited M/s.Ramco Industries Limited and M/s. Ramco Systems Limited.

In accordance with Rule 5 of Companies (Accounts) Rules 2014 a statement containingthe salient features of the financial statements of the Company's Associates' is attachedin Form AOC-1 as Annexure - I.


As per provisions of Section 129(3) of the Companies Act 2013 and Regulation 34 ofSEBI (LODR) Regulations 2015 Companies are required to prepare Consolidated FinancialStatements of its Subsidiaries and Associates to be laid before the Annual General Meetingof the Company.

Accordingly the Consolidated Financial Statements incorporating the accounts ofAssociate Companies viz. M/s. The Ramco Cements Limited M/s. Ramco Industries Limitedand M/s. Ramco Systems Limited along with the Auditors' Report thereon forms part ofthis Annual Report. As per Section 136 (1) of the Companies Act 2013 the FinancialStatements including Consolidated Financial Statements are available at the Company'swebsite at the following link at

The consolidated profit of the Company amounted to $ 16657.61 Lakhs for the year ended31st March 2022 as compared to $ 10118.48 Lakhs of the previous year.

The Consolidated Total Comprehensive Income for the year under review is $ 16628.50Lakhs as compared to $ 10216.67 Lakhs of the previous year.


In accordance with Section 134(5)(e) of the Companies Act 2013 the Company hasInternal Financial Controls by means of Policies and Procedures commensurate with the size& nature of its operations and pertaining to financial reporting. In accordance withRule 8(5)(viii) of Companies (Accounts) Rules 2014 it is hereby confirmed that theInternal Financial Controls are adequate with reference to the financial statements. ERPSystem developed by Ramco Systems Limited has been installed for online monitoring of allfunctions and management information reports are being used to have better internalcontrol system and to take decisions in time.


In accordance with Section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (LODR) Regulations 2015 the Company has established a Vigil Mechanism and has aWhistle Blower Policy. The policy is available at the Company's website. The Policyprovides the mechanism for the receipt retention and treatment of complaints and toprotect the confidentiality and anonymity of the stakeholders. The complaints can be madein writing to be dropped into the Whistle Blower Drop Boxes or through E-Mail to dedicatedmail IDs. The Corporate Ombudsman shall have the sole access to these. The Policy providesto the complainant access to the Chairman of the Audit Committee. The web link for theVigil Mechanism is disclosed in the Corporate Governance Report.


Smt. R. Sudarsanam (DIN:00433926) was reappointed as Managing Director of the Companyfor a period of three years starting from 01-04-2020 to 31-03-2023 at the AGM held on14-08-2019. Due to her age factor she has resigned from the Board as well as from theposition of Managing Director effective 31-05-2022.

Based on the recommendation of the Nomination and Remuneration Committee made at itsmeeting held on 25-05-2022 the Board of Directors at their meeting held on 25-05-2022have appointed Smt. P.V.Nirmala Raju (DIN:00474960) as Managing Director for a period of 5years starting from 01-06-2022 subject to the approval of the Shareholders. Approval ofthe Members has been sought for her appointment in the Notice convening the AGM.

In accordance with the provision of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company the following Directors retire byrotation at the ensuing Annual General Meeting and they are eligible for re-appointment:

1. Shri S.S. Ramachandra Raja (DIN: 00331491)

2. Shri A.V. Dharmakrishnan (DIN: 00693181)

Shri P.A.S. Alaghar Raja (DIN 00487312) has been re-appointed as Independent Directorfor another term of 5 years at the Annual General Meeting held on 25th August 2021. Inthe opinion of the Board Shri P.A.S. Alaghar Raja possess integrity expertise andexperience for being re-appointed as an Independent Director.

Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules 2014 it is reported thatother than the above there have been no changes in the Directors or Key ManagerialPersonnel during the year.

The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Companies Act 2013 that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013.

Independent Directors have complied with the Code for Independent Directors prescribedin Schedule IV of the Companies Act 2013.

The Company had formulated a Code of Conduct for the Directors and Senior Managementpersonnel and the same has been complied with.

The Audit Committee has four members out of which three are Independent Directors.Pursuant to Section 177(8) of the Companies Act 2013 it is reported that there has notbeen an occasion where the Board had not accepted any recommendation of the AuditCommittee.

The Company has a policy relating to appointment and remuneration of Directors KeyManagerial Personnel and other employees duly approved by the Board of Directors basedupon the recommendation of Nomination and Remuneration Committee in accordance withSection 178(3) of the Companies Act 2013.

As per Provisio to Section 178(4) the salient features of the Nomination andRemuneration Policy should be disclosed in the Board's Report. Accordingly the followingdisclosures are given:

Salient Features of the Nomination and Remuneration Policy:

The objective of the Policy is to ensure 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 involvesbalance between fixed and incentive pay reflecting short and long term performanceobjectives shall be appropriate to the working of the company and its goals.

The Nomination and Remuneration Committee and this Policy are in compliance with theCompanies Act 2013 and SEBI (LODR) Regulations 2015. During the year under review therehas been no change in the policy.

The web address of the Policy is at

As required under Regulation 25(7) of LODR the Company has programmes forfamiliarisation for the Independent Directors about the nature of the industry businessmodel roles rights and responsibilities of Independent Directors and other relevantinformation. As required under Regulation 46(2)(i) of LODR the details of theFamiliarisation Programme for Independent Directors are available at the Company'swebsite at the following link -

The details of familiarisation programme are explained in the Corporate GovernanceReport also.


Pursuant to Section 134(3)(p) of the Companies Act 2013 and Regulation 25(4) of SEBI(LODR) Regulations 2015 Independent Directors have evaluated the quality quantity andtimeliness of the flow of information between the Management and the Board Performance ofthe Board as a whole and its Members and other required matters.

Pursuant to Schedule II Part D of SEBI (LODR) Regulations 2015 the Nomination andRemuneration Committee has laid down evaluation criteria for performance evaluation ofIndependent Directors which will be based on attendance expertise and contributionbrought in by the Independent Director at the Board Meeting which shall be taken intoaccount at the time of reappointment of Independent Director.

Pursuant to Regulation 17(10) of SEBI (LODR) Regulations 2015 the Board of Directorshave evaluated the performance of Independent Directors and observed the same to besatisfactory and their deliberations beneficial in Board / Committee meetings.

Pursuant to Regulation 4(2)(f)(ii)(9) of SEBI (LODR) Regulations 2015 the Board ofDirectors have reviewed and observed that the evaluation frame work of the Board ofDirectors was adequate and effective.

The Board's observations on the evaluations for the year under review were similar totheir observations for the previous year. No specific actions have been warranted based oncurrent year observations. The Company would continue to familiarize its Directors on theindustry technological and statutory developments which have a bearing on the Companyand the industry so that Directors would be effective in discharging their expectedduties.


During the year five Board Meetings were held. The details of the Meetings of theBoard and its various Committees held during the financial year including the number ofmeetings attended by each Director are given in Corporate Governance Report.


As required under Clause 9 of Secretarial Standard 1 the Board of Directors confirmsthat the Company has complied with applicable Secretarial Standards.


Pursuant to Rule 8(5)(v) & (vi) of Companies (Accounts) Rules 2014 it is reportedthat the Company has not accepted any deposit from public during the financial year underreview. There was no outstanding of deposits as on 31-03-2022 (Previous year: NIL). TheCompany has no deposit which is not in compliance with the Chapter V of the CompaniesAct 2013.

The Company has received a sum of $ 0.08 Crores (net of repayment) (PY: $ 3.50 Crores)from Directors as loan during the financial year 2021-22. The loans from Directors are nottreated as deposits under Chapter V of the Companies Act 2013.


Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules 2014 it is reported that nosignificant and material orders have been passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.


Pursuant to Section 186(4) of the Companies Act 2013 it is reported that:

(a) the particulars of loans are provided under Note No. 51(b)(i).

(b) the particulars of the guarantees and investments are provided under Note No.47 andNote No. 12 & 13 respectively of Notes forming part of financial statements. Theguarantees are provided to secure the loans from Banks / Financial Institutions at acompetitive pricing by the borrowers.


In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors have constituted a Corporate Social Responsibility (CSR) Committee and adopted aCSR Policy which is based on the philosophy that "As the Organization grows theSociety and Community around it also grows."

The Company has undertaken various projects in the areas of education health ruraldevelopment environmental sustainability livelihood enhancement projects disastermanagement activity etc. largely in accordance with Schedule VII of the Companies Act2013.

Though there was no CSR obligations under Section 135(5) of the Companies Act 2013for the Company to spend any amount towards CSR activity due to losses incurred duringprevious years the Company has spent an amount of $ 42.88 Lakhs on CSR activities. TheCompany had also spent a sum of $ 20.05 Lakhs on other social causes and projects whichdo not qualify as CSR expenditure under the classifications listed out in Schedule VII ofthe Companies Act 2013.

The CSR policy is available at the Company's website at the following link at

The Annual Report on CSR activities as prescribed under Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached as Annexure - II.



M/s. N.A. Jayaraman & Co. Chartered Accountants (FRN: 001310S) and M/s. SRSVAssociates Chartered Accountants (FRN:015041S) who have been appointed as the StatutoryAuditors of the Company at the 81st Annual General Meeting would be the Auditors of theCompany till the conclusion of forthcoming 86th Annual General Meeting.

No change is proposed in the Auditors for the Company. The existing Auditors areeligible for re-appointment for the second term of 5 years.

The Audit Committee and the Board of Directors at their meeting held on 25-05-2022 hadrecommended their appointment as Statutory Auditors pursuant to Section 139 of theCompanies Act 2013 for a period of 5 years from the conclusion of 86th Annual GeneralMeeting till the conclusion of 91st Annual General Meeting. Accordingly the matterrelating to the re-appointment of Statutory Auditors has been included in the noticeconvening the 86th Annual General Meeting. Written consent from the Auditors for theirproposed re-appointment and necessary certificates under Rule 4 of the Companies (Auditand Auditors) Rules 2014 confirming that their re-appointment if made shall be inaccordance with the conditions as prescribed by law and they satisfy the criteria providedunder Section 141 of the Companies Act 2013 has been received.

As required under Regulation 33(1)(d) of SEBI (LODR) Regulations 2015 the Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

The report of the Statutory Auditors for the year ended 31st March 2022 does notcontain any qualification reservation or adverse remark and no instance of fraud has beenreported by Auditors under Section 143(12) of Companies Act 2013.


Shri M.R.L. Narasimha a Practicing Company Secretary is the Secretarial Auditor of theCompany. Pursuant to Section 204(1) of the Companies Act 2013 the Secretarial AuditReport submitted by the Secretarial Auditor for the year ended 31st March 2022 isattached as Annexure - III. The report does not contain any qualification reservation oradverse remark.


As per Section 148(1) of the Companies Act 2013 read with Rule 3 of Companies (CostRecords and Audit) Rules 2014 the Company is required to maintain cost records andaccordingly such records and accounts are made and maintained.

The Board of Directors had approved the appointment of Shri M. Kannan Cost Accountantas the Cost Auditor of the Company to audit the Company's Cost Records relating tomanufacture of textile products for the year 2022-23 at a remuneration of $175000/-(Rupees One Lakh Seventy-five Thousand only) exclusive of GST and out-of-pocket expenses.

The remuneration of the cost auditor is required to be ratified by the members inaccordance with the provisions of Section 148(3) of the Companies Act 2013 and Rule 14 ofCompanies (Audit and Auditors) Rules 2014. Accordingly the matter is being placed beforethe Members for ratification at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2020-21 due to be filed with Ministry ofCorporate Affairs by 12-09-2021 had been filed on 06-09-2021. The Cost Audit Report forthe financial year 2021-22 due to be submitted by the Cost Auditor within 180 days fromthe closure of the financial year will be filed with the Ministry of Corporate Affairswithin the due date.



Pursuant to Section 134(3)(m) of the Companies Act 2013 and Rule 8(3) of Companies(Accounts) Rules 2014 the information relating to Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.


In Accordance with Section 92(3) of the Companies Act 2013 read with Rule 12(1) ofCompanies (Management and Administration) Rules 2014 the copy of the Annual Return forthe year ended 31-03-2021 has been placed on the website of the Company and web link ofsuch Annual Return is -


The Company has complied with the requirements regarding Corporate Governance asstipulated in SEBI (LODR) Regulations 2015. As required under Schedule V(C) of SEBI(LODR) Regulations 2015 a Report on Corporate Governance being followed by the Company isattached as Annexure - V.

As required under Schedule V(E) of SEBI (LODR) Regulations 2015 a Certificate from theAuditors confirming compliance of conditions of Corporate Governance is also attached asAnnexure - VI to this Report.

As required under Regulation 34(3) read with Schedule V Para C (10)(i) of SEBI (LODR)Regulations 2015 Certificate from the Secretarial Auditor that none of the Company'sDirectors have been debarred or disqualified from being appointed or continuing asDirectors of Companies is enclosed as Annexure - VI A.

No complaints had been received pertaining to sexual harassment during the year underreview. The relevant statutory disclosure pertaining to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 are available at Point No. 10(xii) of Corporate Governance Report.


The disclosures in terms of provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) (2) and (3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 relating to remuneration are provided in Annexure - VII.


The Company has 4173 employees as on 31-03-2022 (PY: 3340). Industrial relations withemployees remained cordial during the year. Human Resources Development activitiesreceived considerable focus. The emphasis was on imparting training and development of theskill-set of the employees to enable them to face the challenges in the work environment.

The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


Prior approval / Omnibus approval is obtained from the Audit Committee for all relatedparty transactions and the transactions are periodically placed before the Audit Committeefor its approval. No transaction with the related party is material in nature inaccordance with Company's "Related Party Transaction Policy" and Regulation 23of SEBI (LODR) Regulations 2015. In accordance with Indian Accounting Standard - 24(Related Party Disclosure) the details of transactions with the related parties are setout in Note No. 51 of disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations 2015 The Company'sRelated Party Transaction Policy is disclosed in the Company's website and its web link is


Pursuant to Section 134(3)(n) of the Companies Act 2013 and Regulation 17(9) of SEBI(LODR) Regulations 2015 the Company has developed and implemented a Risk ManagementPolicy. The Policy envisages identification of risk and procedures for assessment andminimization of risk thereof. The Risk Management policy of the Company is available atthe Company's website at the following weblink-


Dividend amount remaining unclaimed / unpaid for a period of over 7 years wastransferred to IEPF as detailed below:

Dividend Details Amount Transferred (in $) Date of Transfer to IEPF
Final Dividend 2013-2014 529235 21-08-2021

Shares transferred to IEPF during the year under review are as given below:

Date of Transfer to IEPF
205 01-09-2021
80 16-09-2021
20 23-09-2021

Year wise amount of unpaid / unclaimed dividend lying in the unpaid account andcorresponding shares which are liable to be transferred to IEPF and due dates for suchtransfer are tabled below:

Year Type of Dividend Date of Declaration of Dividend Last date for claiming Unpaid Dividend Due date for transfer to IEP Fund No. of Shares of $10/- each Amount of unclaimed / unpaid Dividend as on 31-03-2022 - $
2014-2015 Dividend 12-08-2015 11-08-2022 10-09-2022 259370 648425
2015-2016 Interim Dividend 16-03-2016 15-03-2023 14-04-2023 284514 853542
2016-2017 Dividend 10-08-2017 09-08-2024 08-09-2024 280929 1123716
2017-2018 Dividend 10-08-2018 09-08-2025 08-09-2025 118007 472028
2018-2019 Dividend 14-08-2019 13-08-2026 12-09-2026 119780 479120
2019-2020 Dividend 15-09-2020 14-09-2027 14-10-2027 139877 139051*
2020-2021 Dividend 25-08-2021 24-08-2028 23-09-2028 257369 127839*

* Net of TDS


Share transfer and other related matters had been handled by the Company in-house till19-04-2022. The Company has appointed M/s.Cameo Corporate Services Limited as itsRegistrar and Share Transfer Agent. The shifting of electronic connectivity to M/s. CameoCorporate Services Limited has been made effective 20-04-2022. The Contact details of M/s.Cameo Corporate Services Limited is given in the Corporate Governance report.


There have been no changes affecting the financial position of the Company between theend of the financial year (31-03-2022) and till the date of this report (25-05-2022).


Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:

(a) they had followed the applicable accounting standards along with proper explanationrelating to material departures if any in the preparation of the annual accounts for theyear ended 31st March 2022;

(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2022 and the profit of theCompany for the year ended on that date;

(c) they had 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) they had prepared the Annual Accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


The Directors are grateful to the various Departments and agencies of the Central andState Governments for their help and co-operation. They are thankful to the FinancialInstitutions and Banks for their continued help assistance and guidance. The Directorswish to place on record their appreciation of employees at all levels for their commitmentand their contribution.

By Order of the Board
25th May 2022. CHAIRMAN