DIRECTORS' REPORT TO SHAREHOLDERS Dear Shareholders, Your Directors present the Fortieth Annual Report and the Company's audited financial statements for the financial year ended 31st March 2015. PROFITS/ DIVIDENDS The workings during the year 2014-15 have resulted in a net loss of ^19.41 Lakhs as against a net profit of Rs. 49.03 Lakhs in the previous year. No dividend is recommended in view of the loss in the year and the need to conserve funds for reducing borrowings. AMALGAMATION OF SUBSIDIARY COMPANY Veejay Lakshmi Textiles Limited, the erstwhile wholly owned Subsidiary of the company has been merged with the Company by amalgamation from 1.4.2014 and the same has been approved by the Hon'ble High Court, Madras by its order dated 10/07/2015. Accordingly the audited accounts of the Company for the financial year 2014-15 covers both the operations of the engineering activities of the Company and the textile business handled by the subsidiary earlier. OPERATIONS There has not been any improvement in the demand for the products of the company's engineering division and the sales volume of both products have declined. Considering the fall in demand for the automatic cone winder and the delay in development of the new model, the company has decided to discontinue the manufacture of the automatic cone winders. The technology for the new model of automatic cone winder under development has been sold by the company. The export market has not been encouraging for the textile division in the later part of the year. The capacity utilization of the textile division could not be at the optimum level due to the power cut in force through major part of the year. The sales of textile machinery and spares during the year under review is Rs.10,945 Lakhs as against Rs.7,022 Lakhs in the previous year. The sales in the current year include sales from the subsidiary company consequent to amalgamation. The income from the wind mill during the year is Rs.254 lakhs against Rs.136 lakhs in the previous year, mainly due to inclusion of revenue on amalgamation. The exceptional income represents the income on account of know-how fee and also the profit on sale of part of the assets used for automatic cone winders. FINANCE There has not been any additional borrowings/limits availed during the year. The repayment of the Term loans is made as per schedule and the outstanding has come down to Rs.514 lakhs. All interest payments due have been paid in time without any delay. R&D/TECHNOLOGY AND AWARDS The focus of the Company is on product development to improve productivity and energy conservation. The Company's R & D efforts resulted in the development of a new model of Two for one Twister with energy efficient spindles. This has been recognized by the Textile Machinery Manufacturers' Association(India), in the selection of the Company for R&D Award for the year 2014-15. The Textile Division (erstwhile Veejay Lakshmi Textiles Ltd) has also won an award from Texprocil for its export performance in the year 2013-14. INDUSTRIAL RELATIONS The relationship with the workmen has been cordial in all the units of the Company. FIXED DEPOSITS The Company has not accepted any deposits from public during the year and there are no deposits from the public as at 31.3.2015. The Company has an amount of Rs.970.0 lakhs as unsecured loans from Directors. DIRECTORATE Sri D. Ranganathan, Wholetime Director will retire by rotation at the ensuing Annual General meeting and being eligible he offers himself for re appointment. Sri J. Vijayakumar and Sri B.Selvarajan have relinquished their directorships in the Company during the year. Smt Arthi Anand, relative of promoter directors has been co-opted as an additional Director from March 30, 2015. Sri Rajiv A. Naidu has been appointed as Alternate Director to Sri N. Athimoolam Naidu from April 2, 2015. INFORMATION STATUS OF THE COMPANY Information on the performance of the company is given in the Management Discussion and Analysis report which forms a part of the annual report and has been prepared in accordance with clause 49 of the listing agreement. INFORMATION PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013 The information pursuant to provisions of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with provisions of Section 134 of the Companies Act, 2013 are furnished in Corporate Governance Report under the title 'Details of Remuneration for the Year 2014-15.' PARTICULARS OF EMPLOYEES There are no employees within the meaning of sub rule (2) of rule (5) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 who are paid remuneration in excess of the amounts prescribed. Other particulars relating to employees are furnished in the Report on Corporate Governance. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors hereby state that: • in preparation of annual accounts for the financial year ended March 31,2015, the applicable Accounting standards have been followed along with proper explanation relating to material departures. • the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year ended 31st March 2015. • the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. • the Directors have prepared the annual accounts for the Financial year ending March 31, 2015 on a going concern basis. • the Directors had laid down internal financial controls to be followed by the company and that such internal controls are adequate and are operating effectively. • the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented separately forming part of the Annual Report. CORPORATE GOVERNANCE The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. BUSINESS RESPONSIBILITY REPORT As stipulated under the Listing Agreement, the Business Responsibility Report describing the initiatives taken by the Company in this respect is attached as part of the Annual Report. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and were on arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. The prescribed Form AOC-2 in this respect is attached as Annexure I. Your Directors draw attention of the members to note No.7 to the financial statement which sets out related party disclosures. CORPORATE SOCIAL RESPONIBILITY Not applicable to the Company under the relevant provisions of the Companies Act, 2013. RISK MANAGEMENT During the year your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in overseeing and approving the companywide risk management framework and ensuring that there is an adequate risk management infrastructure in place commensurate to the size and nature of business, capable of addressing all the risks. None of the identified risk elements have any threat on the sustainability of the business. The Company's Risk Management Policy which has been approved by the Board is subject to review every year. INTERNAL FINANCIAL CONTROLS The Company has adequate internal financial controls in place with reference to financial statements. During the year such controls were reviewed and ensured that it had no material weakness. DIRECTORS AND KEY MANAGERIAL PERSONNEL The profile of Directors proposed to be reappointed is attached separately. DISCLOSURES: Audit Committee The Audit Committee comprises Independent Directors Sri N.M. Ananthapadmanabhan (Chairman) and Sri B. Sriram and Whole-time Director Sri D.Ranganathan. All the recommendations made by the Audit Committee were accepted by the Board. Vigil Mechanism The Vigil Mechanism of the Company also incorporates whistle blower policy stipulated under the Listing Agreement. Execution of the responsibility in terms of the policy has been entrusted to the Audit Committee. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Chairman of the Audit Committee. The Policy on Vigil Mechanism and Whistle Blower may be accessed on the Company's website. Meetings of the Board Four meetings of the Board of Directors were held during the year. For more details, please refer report on Corporate Governance. Policy on Director's appointment and Remuneration The appointment of Directors and fixation of their remuneration is as per the guidelines laid down in the Nomination and Remuneration Policy of the Company and the provisions of the Companies Act, 2013 and rules in this respect under the Act. The policy is disclosed as Annexure 2 to this report. Declaration by Independent Directors The independent directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as independent directors under the provisions of the above act and the relevant rules. Disclosure under the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) Act, 2013 As per the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) Act, 2013, the Company has constituted a Complaints Committee within HR department. No complaints were received by the committee during the year 2014-15. Particulars of Loans given, Investments Made, Securities provided and guarantees given Particulars of loans given, investments made, securities provided and guarantees given, covered under the provisions of section 186 of the Companies Act, 2013 are contained under note No.3 of the Financial Statement. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure-3 to this report. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure-4 to this report. Particulars of Employees and related disclosures In terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of employees drawing remuneration in excess of the limits set out and other particulars relative of the remuneration of Key Managerial Personnel are provided in the Corporate Governance Report under the title 'Details of Remuneration for the Year 2014-15.' AUDITORS AND AUDITORS' REPORT Statutory Auditors M/s. N.R. Doraiswami & Co., Chartered Accountants, statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting of the Company and are eligible for reappointment. They have confirmed their eligibility to the effect that their reappointment if made, would be within the prescribed limits under the Act and that they are not disqualified for reappointment. The Auditors' Report does not contain any qualification, reservation or adverse remark. Cost Auditors The Cost Records of the Company are not liable for cost audit for the year 2014-15 as per the Cost Audit Rules applicable for that period. Secretarial Auditor The Board has appointed M/s. J Macs Associates P. Ltd, Practicing Company Secretaries to conduct Secretarial Audit for the Financial Year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. ACKNOWLEDGEMENT The Board of Directors wishes to place on record their sincere appreciation to the customers, suppliers, business partners and group companies and shareholders for their support. The Directors would like to thank the Bankers and financial Institutions as well. The Directors would take this opportunity to express their appreciation for their dedicated efforts of the employees and their contribution which is deeply acknowledged. For and on behalf of the Board (Sd/-) V.J. Jayaraman Chairman and Managing Director Place : Coimbatore Date : August 10, 2015 |