Since 1962 NAGA LIMITED 23rd ANNUAL REPORT and Statement of Accounts for the Year Ended 31st March 2014 NAGA LIMITED Since 1962 BOARD OF DIRECTORS Sri. K.S. KAMALAKANNAN Chairman & Managing Director Smt. MAGESWARI KANNAN Joint Managing Director Sri. SOUNDER KANNAN Whole - Time Director Sri. L.A. IRUDAYARAJ Independent Director Dr. K. VENKATACHALAM Independent Director Sri. S. RAMESH Independent Director Sri. V. MARIKANNAN Company Secretary AUDITORS M/s. D. SAMPATHKUMAR & Co., Chartered Accountants 5, South Boag Road, T-Nagar, Chennai - 600 017 BANKERS : AXIS BANK LIMITED, DINDIGUL STATE BANK OF INDIA, DINDIGUL KARUR VYSYA BANK, DINDIGUL STANDARD CHARTERED BANK, MUMBAI REGISTERED OFFICE : No.1, Anna Pillai Street, Chennai - 600 001 FACTORIES 1) Naga Limited - Foods (Unit - I), No.1, Trichy Road, Dindigul - 624 005 2) Naga Limited - Foods (Unit - II), No.133, Trichy Road, Dindigul - 624 005 3) Naga Limited - Retail, No.1, Modern Nagar, Karur Road, Dindigul - 624 005 4) Naga Limited - Minerals, No.9, Trichy Road, Dindigul - 624 005 5) Naga Limited - Detergents, No.1, Oddanchatram Road, Vedasandur - 624 710 23rd ANNUAL REPORT AND STATEMENT OF ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2014 NAGA LIMITED CHAIRMAN’S SPEECH DEAR STAKEHOLDERS OF NAGA, rd It is my pleasure to place your Company’s 23 Annual General Meeting and presenting the financial statements for the year 2013 - 2014 before you. Your company grew its consolidated revenues by 14.69% over the previous year, touching Rs.424.67 crores. But the cash profit is less by 5.74% comparing to last year. This is due to increase in finance cost and other direct expenses. The total production of all divisions has raised to 3,83,837 MT as against previous year production of 3,56,000 MT. Further, long term Measures are under consideration and implementation that will boost the efficiency and productivity. Challenge is growing from the current level to step ahead. Presenting below, Business performance of each divisions. FOODS : There is increase in production by 8% during the year compared to last year. We are expecting this growth for this year also. Past years comparative statement for 5 years production are given below : Year 2013-14 2012-13 2011-12 2010-11 2009-10 Production MT 1,46,769 1,35,220 1,35,216 1,30,309 1,12,292 Growth % 8 -- 4 16 (6) DETERGENTS : Detergents business established in 1990 and is in operation for 24 years. NAGA, is the third largest manufacturer of detergents of M/s. Hindustan Unilever Limited. Past years comparative statements for five years production are given below. Year 2013-14 2012-13 2011-12 2010-11 2009-10 Production MT 1,28,077 1,16,891 97,657 80,645 66,857 Growth % 10 20 21 21 21 MINERALS : The year 2013-14, we sustained the 1,00,000 mark in both production and sales, with 5% growth. We brought JUMBO MILL and Micro Mill in our production process. This will enable us to market in new areas such as paint, plastic, PVC Industries. We have seen 40% growth in our live stock industry. Year 2013-14 2012-13 2011-12 2010-11 2009-10 Production MT 1,08,991 1,03,950 63,889 70,965 68,455 Growth % 5 61 (10) 4 11 rd A 23 ANNUAL REPORT 2013-2014 NAGA LIMITED WINDMILLS : The Energy Division of your company now has total 10 windmills with an installed capacity of 8175KW compared to its humble beginning in 2003 with 2 windmills and installed capacity of 1500KW. Owing to the poor evacuation by the TANGEDCO the generation had comparatively been 43 lacs units less than last year. The issue was represented at various forums. The comparative statement of the last five years units generated is as below. Year 2013-14 2012-13 2011-12 2010-11 2009-10 WEG Units 120 163 118 141 135 Generated in lacs Division Units 174 131 137 138 123 Consumed in lacs Excess / (Short) 54 (32) 19 (3) (12) Consumption OTHER DEVELOPMENTS : SOLAR : We have installed 600 KW solar power on the roof of the Detergent Unit, Vedasandur. The generation of power was satisfactory and in line with expectations. Grid connectivity is under progress and shall be commissioned during July 2014. This will ensure optimum usage of energy generated. FINANCIAL INFORMATION : The quantum leap in the business development is reflected in the company’s Book Value of the equity shares of Rs.10/- each for the last five years as below, thus maximising the wealth of the shareholders. Year 2013-14 2012-13 2011-12 2010-11 2009-10 Per Share Value Rs.43.41 Rs.37.00 Rs.26.62 Rs.23.08 Rs.18.26 FINANCE : (a) Our Turnover has increased by 14.69% (b) Our Net Profit has decreased by 27.83% (c) Our Cash Profit has decreased by 5.74% DIVIDEND POLICY : Taking into consideration the overall profitability position, the Board of Directors have recommended a dividend of 6% on the Equity Share of Rs. 10/- each for the year 2013-14. The total amount of equity dividend payable including dividend tax is Rs. 99.36 lacs. GRATITUDE : We are thankful to the all stakeholders viz., Shareholders, Directors, Employees, Banks and Financial Institutions, Auditors, Consultants, Service Providers and Government Departments for continued support and encouragement. GOD BE WITH NAGA FAMILY. K.S. Kamalakannan Chairman & Managing Director. rd B 23 ANNUAL REPORT 2013-2014 NAGA LIMITED NOTICE TO THE SHAREHOLDERS Notice is hereby given that the Twenty Third Annual General Meeting of the Members of M/s. NAGA LIMITED will be held at the Presidency Club, No.51, Ethiraj Salai, Egmore, Chennai-600 008 on Friday the 01st August, 2014 at 12.15 P.M. to transact the following business: AGENDA ORDINARY BUSINESS: 1. To receive, consider and adopt the Financial Statements of the Company for the year ended on 31st March 2014 consisting of Audited Balance Sheet as at 31st March 2014 and the statement of profit and loss account for the year ended on that day together with the reports of the Board of Directors’ and Auditors’ thereon. 2. To declare a dividend on the equity shares of the Company. 3. To appoint a Director in place of Sri. Sounder Kannan (Holding DIN 01603823), who retires by rotation and being eligible, offers himself for re-appointment. 4. To appoint M/s. D. Sampathkumar & Co., Chartered Accountants (Registration No. 003556S) as statutory auditors of the Company and fix their remuneration. SPECIAL BUSINESS: Item No.5 REAPPOINTMENT OF SRI. K.S. KAMALAKANNAN, CHAIRMAN AND MANAGING DIRECTOR To consider and if thought fit,to pass with or without modification(s), the following resolution as Special Resolution : “RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part II section II thereto and subject to such approvals, if any, as may be necessary, consent of the Company be and is hereby accorded to the appointment of Sri. K.S. Kamalakannan (holding DIN 01601589) as the Chairman and Managing Director of the Company for a period of Three (3) years w.e.f. 01.08.2014, not liable to retire by rotation, on the terms and conditions, as set out in the explanatory statement attached to this notice and hereby approved, with liberty to the Board of Directors to revise the terms as to remuneration, from time to time within the limits provided for in the said schedule V part II section II or any amendment thereof for the time being in force.” Item No.6 REAPPOINTMENT OF SMT. MAGESWARI KANNAN, JOINT MANAGING DIRECTOR To consider and if thought fit, to pass with or without modification(s), the following resolution as Special Resolution: “RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part II section II thereto and subject to such approvals, if any, as may be necessary, consent of the Company be and is hereby accorded to the appointment of Smt. Mageswari Kannan (holding DIN 02107556) as the Joint Managing Director of the Company for a period of Three (3) years w.e.f. 01.08.2014, liable to retire by rotation, on the terms and conditions, as set out in the explanatory statement attached to this notice and hereby approved, with liberty to the Board of Directors to revise the terms as to remuneration, from time to time within the limits provided for in the said schedule V part II section II or any amendment thereof for the time being in force.” 1 23rd ANNUAL REPORT 2013-2014 NAGA LIMITED Item No.7 REAPPOINTMENT OF SRI. SOUNDER KANNAN, WHOLE - TIME DIRECTOR To consider and if thought fit, to pass with or without modification(s), the following resolution as Special Resolution: “RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part II section II thereto and subject to such approvals, if any, as may be necessary, consent of the Company be and is hereby accorded to the appointment of Sri. Sounder Kannan (holding DIN 01603823) as the Whole-Time Director of the Company for a period of Three (3) years w.e.f. 27.03.2014, liable to retire by rotation, on the terms and conditions, as set out in the explanatory statement attached to this notice and hereby approved, with liberty to the Board of Directors to revise the terms as to remuneration, from time to time within the limits provided for in the said schedule V part II section II or any amendment thereof for the time being in force.” Item No.8 INCREASING BORROWING POWER OF THE BOARD OF DIRECTORS To consider and if thought fit, to pass with or without modification(s), the following resolutions as Special Resolutions: “RESOLVED that in supersession of the ordinary resolutions adopted at the extraordinary general meeting of the Company held on 12th September 2012 and pursuant to the provisions of section 180 (1) (c) and other applicable provisions, if any, of the Companies Act, 2013 including any statutory modifications or any amendments or any substitution or re-enactment thereof, if any, for the time being in force and all other applicable Acts, laws, rules, regulations and guidelines for the time being in force, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for borrowing from time to time as they may think fit, any sum or sums of money not exceeding Rs.