Directors Report of S P Apparels Ltd.

Mar 31, 2025

The Directors of your Company are pleased to present the 20th Annual Report on the business and operations of the Company
together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2025.

FINANCIAL RESULTS

The Company’s financial performance for the year ended 31st March, 2025 is summarised below:

(in Million)

PARTICULARS	STANDALONE		CONSOLIDATED
	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	9816.23	9483.20	13951.34	10873.55
Other Income	73.83	156.64	121.92	163.17
Total Income	9890.06	9639.84	14073.26	11036.72
Total Expenses before Interest & Depreciation	8201.66	7801.15	12,073.25	9295.79
Profit before Interest & Depreciation	1688.40	1838.39	2000.02	1740.93
Less: Interest	199.76	131.14	334.85	186.99
Depreciation	371.17	350.61	432.96	377.54
Profit Before Tax	1117.47	1356.94	1232.21	1176.40
Less : Taxation
Provision for Current Tax	281.24	309.78	359.38	309.78
Prev period Tax	24.55	-6.80	23.62	-6.80
Deferred Tax Expenses / (Credit)	(23.64)	16.34	(101.81)	(22.83)
Total Tax Expenses	282.15	319.32	281.19	280.15
Profit After Tax from continuing operations	835.32	1037.62	951.02	896.25
Profit After Tax from discontinuing operations	-	-	-	-
Profit After Tax	835.32	1037.62	951.02	896.25
Other comprehensive Income (Net of tax)	(31.49)	76.98	(28.55)	76.98
Minority Interest	-	-	(0.46)	(0.59)
Total Comprehensive Income	803.83	1114.60	922.01	972.64

Review of Operations:

Garment Division

Financial Year 24 - 25, Garment division had an operational
revenue of Rs 9816.23 million and have achieved a growth
of 3% revenue for the current year. Margins were under
pressure due to the low efficiency, level of workmen and also
air freight.

Spinning Division and the Processing division was utilised
100% and had improved on their margins comparing the
previous years.

Young Brand Apparels Private Limited

Young Brand Apparels (P) Ltd, was acquired on 21st of June

2024 and have been successful in improving the revenue and
the margins for the current year. During the current Financial
Year 2024 - 25 they have achieved a total revenue of Rs
3243.18 million and a PAT of Rs 324.44 million.

S.P. Retail Ventures Limited

Financial year 24 - 25 has also been a very tough year for the
Retail sector. Inflation and higher interest cost is showing
some stress in the retail industry.

The new brands that were added into the portfolio of brands
had impacted the margins of the S.P. Retail Ventures Limited.
This is mainly due to the brand HEAD where the minimum
guaranteed sales were not achieved, and we were also losing
margins due to lack of sales. However, we have exited brand
“HEAD” effective from December 2024.

We are confident that SP Retail ventures will be able to raise
capital during the current financial year to support their
aspiration of growth and cash flows.

S.P. Apparels (UK) Ltd

S.P. Apparels (UK) Ltd has reported a revenue of GBP
6.8 million, However high Interest cost & higher Overheads
are putting pressure in the margins of the company. The
team has been changed in S.P. Apparels (UK) Ltd. They also
have move to a new premises which is in London. They have
also added couple of new customers to their portfolio and
will increase on both revenue and margins during the next
financial year.

S.P. Apparels International (Private) Limited

Currently our focus is on Sri Lanka operation and we are very
confident of increasing our capacity in Sri Lanka. The next
line of growth is expected to come from Sri Lanka.

OPERATIONS

The Company achieved a total revenue of Rs.9890.06 million
as against Rs.9639.84 million in the previous year. The
Company’s Profit Before Tax is Rs.1117.47 million during the
year, as compared to Rs. 1356.94 million in the previous year.
The Company earned a Net Profit of Rs.835.32 million, as
against a Net Profit of Rs. 1037.62 million in the previous
year.

There was no change in the nature of business of the Company
during the financial year ended 31st March 2025.

DIVIDEND

The Board of Directors recommends a dividend of Rs.2/- per
Equity Share having a face value of Rs.10/- each (20%) on
the Equity Share Capital of Rs.250.93 Million for the financial
year ended on 31st March 2025 aggregating to Rs. 50.19
Million. As per Finance Act, 2020, the Dividend is taxable in
the hands of the Shareholders. Dividend on Equity Shares is
subject to the approval of the Shareholders at the ensuing
Annual General Meeting.

As per the requirements of SEBI notification no. SEBI/LAD/

NRO/GN/2016-17/008 dated 8th July 2016, the Company has
formulated a Dividend Distribution Policy which has been duly
approved by the Board of Directors. A copy of the Dividend
Distribution Policy is available on the Company’s website:
http://www.s-p-apparels.com/assets/img/docs/Dividend-
Distribution-Policy.pdf

TRANSFER TO RESERVES & SURPLUS

As at March 31, 2025 the Company had reserves of
Rs.8346.60 million. During the year under review, the
company has transferred Rs.835.32 million to Retained
Earnings (Other Equity).

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR
EDUCATION AND PROTECTION FUND

As required under the provisions of Section 125 and other
applicable provisions of Companies Act, 2013 (hereinafter
“the Act”), dividend that remains unpaid/ unclaimed for a
period of seven years, are to be transferred to the account
administered by the Central Government viz: Investor
Education and Protection Fund (“IEPF”).

Accordingly, the company has transferred Rs. 4,922.50/- to
the Investor Education and Protection Fund on 24.09.2024
pertaining to the financial year 2016-17, that remained
unpaid or unclaimed for seven consecutive years.

SHARE CAPITAL

The Authorised Share Capital of the Company is
Rs. 47,25,00,000/- divided into 4,72,50,000 equity shares of
Rs. 10/- each and the issued share capital of the Company
as at 31.03.2025 stood at Rs.25,09,26,000/- divided into
2,50,92,600 Equity Shares of Rs.10/- each and the subscribed
and paid-up share capital of the Company as at 31.03.2025
stood at Rs.25,09,26,000/- divided into 2,50,92,600 Equity
Shares of Rs.10/- each.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year
2024-25 as required under Section 92(3) of the Companies
Act, 2013 is available on the website of the Company at the
link http://www.sp-apparels.com

CAPITAL EXPENDITURE

As on 31st March, 2025, the gross fixed assets block stood at
Rs.8259.10 Million and net fixed assets block at Rs.4587.05
Million. Additions to Fixed Assets during the year amounted
to Rs.538.02 Million.

BOARD AND COMMITTEE MEETINGS

The details of meetings of Board of Directors and Committees
thereof and the attendance of the Directors in such meetings
have been enumerated in the Corporate Governance Report.

STATEMENT ON COMPLIANCE WITH SECRETARIAL
STANDARDS

The Directors have devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards. Such systems are found to be adequate and are
operating effectively. The Company has duly complied with
Secretarial Standards issued by the Institute of Company
Secretaries of India in respect of the meeting of the Board of
Directors (SS-1) and General Meetings (SS-2).

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the
Companies Act, 2013, with respect to Directors’ Responsibility
Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed and there are no
material departures from those standards;

(b) the directors had 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 of the company for that
period;

(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for
safeguarding the assets of the company and for preventing
and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a
going concern basis;

(e) the directors laid down internal financial controls to be
followed by the Company and such internal financial controls
were adequate and operating effectively and

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

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE
REPORTABLE TO THE CENTRAL GOVERNMENT

There were no instances of frauds identified or reported
by the Statutory Auditors during the course of their audit
pursuant to Section 143(12) of the Companies Act, 2013.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the
Independent Directors of the Company confirming that they
meet the criteria of independence as stipulated in Section
149(6) of the Companies Act, 2013 and Regulation 16(1)(b)
of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and that their name is included in the data
bank as per Rule 6(3) of the Companies (Appointment and
Qualification of Directors) Rules, 2014.

Based on the confirmation / disclosures received from the
Directors and on the evaluation of the Board, the Independent
Directors have complied with the Code for Independent
Directors prescribed in Schedule IV to the Companies Act,
2013 and also complied with the Code of Conduct for
directors and senior management personnel formulated by
the company.

STATEMENT REGARDING OPINION OF THE BOARD WITH
REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE
(INCLUDING THE PROFICIENCY) OF THE INDEPENDENT
DIRECTORS APPOINTED DURING THE YEAR

The Board of Directors have evaluated the Independent
Directors during the year 2024-25 and opined that the
integrity, expertise and experience (including proficiency) of
the Independent Directors is satisfactory.

COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT,
PAYMENT OF REMUNERATION AND OTHER MATTERS
PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT,
2013

The Company pursuant to the provisions of Section 178 of the
Companies Act, 2013 and in terms of Regulation 19(4) of the
SEBI Listing Regulations has formulated a policy on Nomination
and Remuneration for its Directors, Key Managerial Personnel
and senior management. The Nomination and Remuneration
Policy of the Company can be accessed on the Company’s
website at the link https://www.s-p-apparels.com/wp/wp-
content/uploads/bsk-pdf-manager/2025/05/NOMINATION-
AND-REMUNERATION-POLICY-10-02-2025.pdf

COMMENTS ON AUDITORS’ REPORT:

There are no qualifications, reservations or adverse remarks
or disclaimers made by ASA & Associates LLP, Statutory
Auditors in their report.

Regarding the remarks made by MDS & Associates LLP,
Secretarial Auditors of the Company in their report (Annexure
D), your Director’s ensure timely compliance going forward.

MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1)
OF SECTION 148 OF THE COMPANIES ACT, 2013

The maintenance of cost record as specified by the Central
Government under Section 148(1) of the Companies Act,
2013 is applicable to the Company and accordingly the cost
accounts and records are made and maintained. However,
the appointment of Cost Auditor under the provisions of
Section 148 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has given loans, provided guarantees and
made investments including investments in mutual funds and
complied with the provisions of section 186 of the Companies
Act 2013 and as required therein the details of the loans
given, guarantees provided and investments made are
annexed by way of notes to accounts. However, the Company
has not provided security in connection with a loan to any
other body corporate or person during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH
RELATED PARTIES

All transactions entered into with related parties as defined
under the Companies Act, 2013 and Regulation 23 of SEBI
(Listing Obligations & Disclosure Requirements) Regulations,
2015 (as amended) during the financial year 2024-25 were in
the ordinary course of business and on an arm’s length basis
and not material in nature and thus a disclosure in Form AOC-
2 is not required.

The Policy on Related Party Transactions as approved by the
Board of Directors of the Company has been uploaded on
the Company’s website and may be accessed through the
link at https://www.s-p-apparels.com/wp/wp-content/
uploads/bsk-pdf-manager/2025/05/RPT-Policy-amended-
dt-10022025.pdf

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE
FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, if
any, affecting the financial position of the Company which
have occurred between the end of the financial year as on
31st March 2025 and the date of the report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy,
technology absorption, Foreign Exchange Earnings and outgo
as required under section 134(3)(m) of the Companies Act,

2013 read with Rule 8(3) of the Companies (Accounts) Rules,

2014 is furnished in Annexure-A and is attached to this report.

STATEMENT CONCERNING DEVELOPMENT AND
IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE
COMPANY

The Committee has formulated a Risk Management Policy for
dealing with different kinds of risks which it faces in day-
to-day operations of the Company. The Risk Management
Policy of the Company outlines different kinds of risks
and risk mitigating measures to be adopted by the Board.
The Company has adequate internal control systems and
procedures to combat the risk. The Risk management

procedure is reviewed by the Audit Committee and Board
of Directors on a Quarterly basis at the time of review of
Quarterly Financial Results of the Company.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY
THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY
INITIATIVES:

The Corporate Social Responsibility Committee has formulated
and recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to
be undertaken by the Company as specified in Schedule VII
of the Companies Act, 2013, which has been approved by
the Board. For other details regarding the CSR Committee,
refer to the Corporate Governance Report, which is a part of
this report. The annual report on CSR activities is annexed in
Annexure-B herewith. The CSR policy may be accessed on the
Company’s website https://www.s-p-apparels.com/wp/wp-
content/uploads/bsk-pdf-manager/2025/05/CSR-Policy.pdf

ANNUAL EVALUATION OF THE BOARD ON ITS OWN
PERFORMANCE, ITS COMMITTEE AND OF THE INDIVIDUAL
DIRECTORS

Pursuant to the provisions of the Act and SEBI Listing
Regulations, the Board of Directors evaluated the
performance of the Board, having regard to various
criteria such as Board composition, Board processes,
Board dynamics etc. The Independent Directors, at their
separate meetings, also evaluated the performance of non¬
independent directors and the Board as a whole based on
various criteria. The performance of each independent
Director was evaluated by the entire board of directors on
various parameters like engagement, leadership, analysis,
decision making, communication, governance etc. The Board
and the Independent Directors were of the unanimous view
that performance of the Board of Directors as a whole was
satisfactory.

The performances of all the Committees were evaluated by
the Board having regard to various criteria such as committee
composition, committee processes, committee dynamics,
degree of fulfillment of key responsibilities, effectiveness
of meetings etc. The Board was of the unanimous view

that all the committees were performing their functions
satisfactorily.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr.S.Chenduran (DIN: 03173269), Joint Managing Director
retires by rotation at the Annual General Meeting and being
eligible, offers himself for re-appointment. Your Directors
recommend his re-appointment.

During the year under review, based on the recommendation
of Nomination and Remuneration Committee, the Board
of Directors appointed Mr. Ravishankar Balaraman (DIN:
07148483) as an Additional Director in the capacity as
Independent Director of the Company with effect from
7th March 2025 and recommended to the members for
appointment as Independent Director of the Company for
the first term of consecutive Five (5) years with effect from
7th March 2025. Subsequently, the same was approved by the
members with effect from the aforementioned date.

Mr. V. Sakthivel, (DIN: 00005720), retired as Independent
Director on 29th March 2025 consequent to completion of his
2nd term of consecutive five years. The Board of Directors
placed on record its sincere appreciation for the invaluable
services rendered by him during his tenure.

Based on the recommendation of Nomination and
Remuneration Committee, the Board of Directors re¬
appointed Mr. Sundararajan Chenduran (DIN: 03173269)
and Smt. Sundararajan Shantha (DIN: 00088941) as Joint
Managing Director(s) of the Company for a further period of
3 years with effect from 11th August 2025 and the same was
approved by the members subsequently.

Key Managerial Personnel of the Company as required
pursuant to Section 2 (51) and 203 of the Companies Act,
2013 are:

Mr.P.Sundararajan - Chairman and Managing Director.

Mrs.S.Latha - Executive Director

Mr.S.Chenduran - Joint Managing Director

Mrs.S.Shantha - Joint Managing Director

Mrs.P.V.Jeeva - Chief Executive Officer - Garments Division.
Mr.V.Balaji - Chief Financial Officer and
Mrs.K.Vinodhini - Company Secretary.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES.

The Company has Five subsidiaries viz. Crocodile Products
Private Limited, S.P.Apparels (UK) Private Limited, S.P Retail
Ventures Limited, Young Brand Apparel Private Limited and
S.P Apparels International Private Limited.

The consolidated financial statements of the company and its
subsidiaries were prepared in accordance with the applicable
accounting standards have been annexed to the Annual
Report.

The annual accounts of the subsidiary companies are posted
on the website of the Company viz. https://www.s-p-
apparels.com/wp/financial-information/ and will also be
kept open for inspection by any shareholder at the Registered
Office of the Company.

A report containing the salient features of the subsidiaries
as required under Section 129(3) of the Companies Act, 2013
has been annexed herewith in Form AOC - 1 and is attached
as Annexure-C to this report.

The Company has formulated a Policy for determining
Material Subsidiaries. The Policy may be accessed at:
https://www.s-p-apparels.com/wp/wp-content/uploads/
bsk-pdf-manager/2025/05/POLICY-FOR-DETERMINATION-
OF-MATERIALITY-OF-INFORMATION-OR-EVENTS-amended-
dt-10022025.pdf

The Company does not have Joint Venture or Associate
Company.

CONSOLIDATED FINANCIAL STATEMENTS

Directors have attached the Consolidated Financial
Statements in the Annual Report pursuant to the provisions of
the Companies Act, 2013. They are prepared in accordance
with the Accounting Standards prescribed by the Institute
of Chartered Accountants of India, in this regard. The
Consolidated Financials also shows a significant increase in
revenue.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit
covered under Chapter V of the Companies Act, 2013, there
are no deposits remaining unclaimed or unpaid as on 31st
March, 2025 and accordingly, the question of default in
repayment of deposits or payment of interest thereon during
the year does not arise.

FINANCE

Prompt repayments, facilitated by healthy cash flows,
elevated the standing of your Company. It enabled prudent
application of funds and better negotiation strength. This
trend is expected to continue.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY
THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND COMPANY’S OPERATION
IN FUTURE

No significant and material order was passed by any Regulators
that have any impact on the going concern status and the
operations of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an adequate Internal Control System,
commensurate with the size, scale and complexity of its
operations. The Audit Committee of the Board periodically
reviews the Internal Financial Control Systems and their
adequacy and recommends corrective action as and when
necessary to ensure that an effective internal control
mechanism is in place.

The directors confirm that the Internal Financial Control (IFC)
is adequate with respect to the operations of the Company.
A report of Auditors pursuant to Section 143(3)(i) of the
Companies Act, 2013 certifying the adequacy of Internal
Financial Control is annexed with the Auditors Report.

AUDITORS

a) STATUTORY AUDITORS

M/s. ASA & Associates LLP, Chartered Accountants, Chennai

were appointed as the Statutory Auditors of the Company for
a period of five years at the Annual General Meeting of the
Company held on 19th September 2022 from the conclusion
of the 17th Annual General Meeting till the conclusion of the
22nd Annual General Meeting to be held in the year 2027.

The Company has received a certificate from the Statutory
Auditors to the effect that their appointment as the Statutory
Auditors of the Company, would be within the limits
prescribed under section 139 of the Companies Act, 2013.

b) SECRETARIAL AUDITORS

Pursuant to Regulation 24A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and the
provisions of Sections 179 & 204 of the Companies Act, 2013,
read with the Companies (Meetings of Board and its Powers)
Rules, 2014, and subject to the approval of Shareholders in
the ensuing Annual General Meeting, the Board of Directors
of the Company have recommended the appointment of
MDS & Associates LLP, Company Secretaries, Coimbatore
as Secretarial Auditors of the Company for a first term of
5 (five) consecutive financial years commencing from the
financial year 2025-26.

The report of the Secretarial Auditors for the financial year
2024-25 is annexed as Annexure-D to this Report.

c) INTERNAL AUDITOR

The Board has appointed BM & Associates, Chartered
Accountants, Coimbatore as Internal Auditors for the financial
year 2025-26 pursuant to the provisions of Section 138 of the
Companies Act, 2013.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by
the Company is among the best in the Corporate sector. The
strength of company’s employees is close to 14004.

EMPLOYEE STOCK OPTION SCHEME

The Company has implemented the SPAL Employee Stock
Option Plan 2024 (SPAL ESOP 2024). The Nomination and
Remuneration Committee administers and monitors the
SPAL ESOP 2024 of the Company. The disclosure pursuant to

the provisions of SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 is given in Annexure-E to this
report.

The Company has received a Certificate from the Secretarial
Auditors of the Company that the above referred Scheme had
been implemented in accordance with the SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021 and
the resolutions passed by the members in this regard.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF
WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to
the constitution of Internal Complaints Committee under
the Sexual Harassment of Women at Workplace in line with
the requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
An Internal Complaints Committee has been set up to define
the policy and redress complaints received. All employees
(permanent, contractual, temporary, trainees) are covered
under this policy. There were no complaints received from
any employee or third parties during the Financial Year.

1. Number of complaints received - Nil

2. Number of complaints disposed of - NA

PARTICULARS OF EMPLOYEES

The statement pursuant to Section 197(12) of the Companies
Act, 2013 read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, is
annexed to Annexure-F attached to this report.

MANAGEMENT DISCUSSION & ANALYSIS

As per Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, a separate
section on Management Discussion and Analysis Report
outlining the business of your Company forms part of this
Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

At a time and age when enterprises are increasingly seen
as critical components of the social system, they are

accountable not merely to their shareholders from a revenue
and profitability perspective but also to the larger society
which is also its stakeholders. The Business Responsibility
and Sustainability Report describing the initiatives taken by
the Company from an environmental, social and governance
perspective, in the format as specified by SEBI Master Circular
vide SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11,
2024 (as amended) forms part of this Annual Report.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed and forms part
of this report. The Company has complied with the conditions
relating to Corporate Governance as stipulated in Regulation
27 of SEBI (Listing Obligation & Disclosure Requirements)
Regulations, 2015 (as amended).

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been
duly constituted in accordance with the provisions of Section
177 of the Companies Act, 2013. The details relating to the
composition, meetings and functions of the Committee are
set out in the Corporate Governance Report forming part
of this Annual Report. The Board has accepted the Audit
Committee recommendations during the year whenever
required and hence no disclosure is required under Section
177(8) of the Companies Act, 2013 with respect to rejection
of any recommendations of Audit Committee by the Board.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has provided for adequate safeguards to deal
with instances of fraud and mismanagement and to report
concerns about unethical behaviour or any violation of the
Company’s Code of Conduct. During the year under review,
there were no complaints received under this mechanism.
The policy can be accessed on the Company’s website at
https://www.s-p-apparels.com/wp/wp-content/uploads/
bsk-pdf-manager/2025/05/Vigil-Mechanism-Policy_Revised.
pdf

DETAILS OF APPLICATION MADE OR ANY PROCEEDING
PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE,
2016 DURING THE YEAR

No applications has been made and no proceedings are
pending against the Company under the Insolvency and
Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE
VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT
AND THE VALUATION DONE WHILE TAKING LOAN FROM
THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE
REASONS THEREOF.

The disclosure under this clause is not applicable as the
Company has not undertaken any one-time settlement with
the banks or financial institutions.

INDUSTRIAL RELATIONS

The relationship between the management and the employees
at all levels during the year under review has been cordial
and productive.

CAUTIONARY NOTE

Certain statements in “management discussions and
analysis” section may be forward looking and are stated as
required by law and regulations. Many factors, both external
and internal, may affect the actual results which could
be different from what the directors envisage in terms of
performance and outlook.

ACKNOWLEDGEMENT

Your Directors would like to place on record their sincere
appreciation for the dedication, commitment, and hard work
of all employees across every level of the organization. The
Company’s accomplishments during the year would not have
been possible without their unwavering support and tireless
efforts. Your Directors also wish to thank its customers,
suppliers and bankers for their continued support and faith
reposed in the Company.

For and on behalf of the Board of Directors
P. Sundararajan S. Latha

Place : Avinashi Chairman and Managing Director Executive Director

Date : 06.08.2025 DIN : 00003380 DIN : 00003388

---

Mar 31, 2024

The Directors of your Company are pleased to present the 19th Annual Report on the business and operations of the Company together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2024.

FINANCIAL RESULTS

The Company’s financial performance for the year ended 31st March, 2024 is summarised below:

(in Million)
PARTICULARS	STANDALONE		CONSOLIDATED
	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	9483.20	9424.96	10873.55	10808.55
Other Income	156.64	198.24	163.17	200.36
Total Income	9639.84	9623.20	11036.72	11008.91
Total Expenses before Interest & Depreciation	7801.15	7906.78	9295.79	9353.55
Profit before Interest & Depreciation	1838.39	1716.42	1740.93	1655.36
Less: Interest	131.14	156.16	186.99	186.19
Depreciation	350.61	337.51	377.54	361.53
Profit Before Tax	1356.94	1222.75	1176.40	1107.64
Less : Taxation
Provision for Current Tax	309.78	302.37	309.78	302.37
Prev period Tax	-6.80	-2.62	-6.80	-2.62
Deferred Tax Expenses / (Credit)	16.34	4.87	-22.83	-17.23
Total Tax Expenses	319.32	304.62	280.15	282.52
Profit After Tax from continuing operations	1037.62	918.13	896.25	825.12
Profit After Tax from discontinuing operations	-	-	-	-
Profit After Tax	1037.62	918.13	896.25	825.12
Other comprehensive Income (Net of tax)	76.98	-66.02	76.98	-66.02
Minority Interest	-	-	-0.59	-0.30
Total Comprehensive Income	1114.60	852.11	972.64	758.80

Review of Operations:Garment Division

Financial Year 23 - 24 has been a year with consolidation and sustainability. Raw material cost have corrected and have come down. We were able to sustain the revenue despite material cost coming down. Margins were affected due to some air freight during Q4.

Spinning industry has picked up after the cotton prices were stabilised and we expect the cotton price to come down further which in turn will improve the margins of the company.

S.P. Retail Ventures Limited

Financial year 23 - 24 has also been a very tough year for the Retail sector. Inflation and higher interest cost is created some stress in the retail industry.

The new brands that were added to the portfolio of brands had impacted the margins of the S.P. Retail Ventures Limited. This is mainly due to the brand HEAD where the minimum guaranteed sales were not achieved, and we were also losing margins due to lack of sales. However, we have given a termination notice to “HEAD” and will exit the brand from December 2024.

We are confident that SP Retail ventures will be able to raise capital during the current financial year to support their aspiration of growth and cash flows.

S.P. Apparels (UK) (P) Ltd

S.P. Apparels (UK) (P) Ltd has undergone a tough year. Inflation, High Interest cost & high inventory with Retailers put pressure in the demand and margins of the company. There is also change in the management team of S.P. Apparels (UK) (P) Ltd. They also had to move to a new premises in London.

The new team is confident that they will be able to revive the revenue and grow in the years to come.

OPERATIONS

The Company achieved a total turnover of Rs. 9639.84 Million as against Rs.9623.20 Million in the previous year. The Company’s Profit Before Tax is Rs.1356.94 Million during the year, as compared to Rs. 1222.75 Million in the previous year, with an increase of 10.97% over the last year. The Company earned a Net Profit of Rs.1037.62 Million, as against a Net Profit of Rs.918.13 Million in the previous year.

There was no change in the nature of business of the Company during the financial year ended 31st March, 2024.

DIVIDEND

Considering the need for acquisition fundings, your Board of Directors has not recommended any dividend on the equity shares of the Company for the financial year 2023-2024.

As per the requirements of SEBI notification no. SEBI/LAD/ NRO/GN/2016-17/008 dated 8th July 2016 the Company has formulated a Dividend Distribution Policy which has been duly approved by the Board of Directors. A copy of the Dividend Distribution Policy is available on the Company’s website: https://www.s-p-apparels.com/assets/img/docs/Dividend-Distribution-Policy.pdf

TRANSFER TO RESERVES & SURPLUS

As at March 31,2024 the Company had reserves of Rs. 7539.11 Million. During the year under review, the company has

transferred Rs.1037.62 Million to Retained Earnings (Other Equity).

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 124 and 125 of the Companies Act, 2013, the unpaid/unclaimed Dividend relating to the financial year 2016-17, is due to transfer during September 2024 to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Further, during the year under review, there was no unpaid/ unclaimed Dividend, and hence, the provisions of Section 124 & 125 of the Companies Act, 2013 relating to transfer of Unclaimed dividend to Investor Education and Protection fund do not apply.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 47,25,00,000/- divided into 4,72,50,000 equity shares of Rs. 10/- each and the issued share capital of the Company as at 31.03.2024 stood at Rs.25,69,26,000/- divided into 2,56,92,600 Equity Shares of Rs.10/- each and the subscribed and paid-up share capital of the Company as at 31.03.2024 stood at Rs.25,09,26,000/- divided into 2,50,92,600 Equity Shares of Rs.10/- each.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year 2023-24 as required under Section 92(3) of the Companies Act, 2013 is available on the website of the Company at the link https://www.s-p-apparels.com/wp/wp-content/

uploads/bsk-pdf-manager/2024/08/Form-MGT-7_Website-final.pdf

CAPITAL EXPENDITURE

As on 31st March, 2024, the gross fixed assets block stood at Rs.8116.10 Million and net fixed assets block at Rs.4523.90 Million. Additions to Fixed Assets during the year amounted to Rs. 507.74 Million.

BOARD AND COMMITTEE MEETINGS

The details of meetings of Board of Directors and Committees thereof and the attendance of the Directors in such meetings have been enumerated in the Corporate Governance Report.

STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards. Such systems are found to be adequate and are operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India in respect of the meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) the directors had 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 of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and operating effectively and

(f) the directors had devised proper systems to ensure

compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014. During the year, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of directors and Committee(s). The details of remuneration and /or other benefits of the Independent director are mentioned in the Corporate Governance Report. Further, they have also declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Based on the confirmation / disclosures received from the Directors and on the evaluation of the relationships disclosed, the following Non-Executive Directors are Independent:

Mr.V.Sakthivel, Mr.A.S. Anand Kumar, Mr.C.R.Rajagopal and Mrs.H.Lakshmi Priya

Pursuant to Companies (Appointment and Qualification of Directors) Rules, 2014, the Certificate of Registration received from all the Independent Directors of the Company were taken on note by the Board of Directors.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

The Board of Directors have evaluated the Independent Directors during the year 2023-24 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013

The Company pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy on Nomination and Remuneration for its Directors, Key Managerial Personnel and senior management. The Nomination and Remuneration Policy of the Company can be accessed on the Company’s website at the link https://www.s-p-apparels.com/wp/wp-content/uploads/bsk-pdf-manager/2022/08/NOMINATION-AND-REMUNERATION-POLICY-11-02-2022.pdf

COMMENTS ON AUDITORS’ REPORT:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. ASA & Associates LLP, Statutory Auditors in their report.

Regarding the remarks made by M/s. MDS & Associates LLP, Secretarial Auditors of the Company in their report (Annexure D), your Director’s ensure timely compliance going forward.

MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013

The maintenance of cost record as specified by the Central Government under Section 148(1) of the Companies Act, 2013 is applicable to the Company and accordingly the cost accounts and records are made and maintained. However, the appointment of Cost Auditor under the provisions of Section 148 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has given loans, provided guarantees and made investments including investments in mutual funds and complied with the provisions of section 186 of the Companies Act 2013 and as required therein the details of the loans given, guarantees provided and investments made are annexed by way of notes to accounts. However, the Company has not provided security in connection with a loan to any other body corporate or person during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended) during the financial year 2023-24 were in the ordinary course of business and on an arm’s length basis and not material in nature and thus a disclosure in Form AOC-2 is not required.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Company’s website and may be accessed through the link at https://www.s-p-apparels.com/wp/wp-content/uploads/ bsk-pdf-manager/2022/08/RPT-Policy-Rev.pdf

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial year ended 31st March 2024 relate and the date of the report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act,

2013 read with Rule 8(3) of the Companies (Accounts) Rules,

2014 is furnished in Annexure-A and is attached to this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Committee has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day-to-day operations of the Company. The Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, which has been approved by the Board. For other details regarding the CSR Committee, refer to the Corporate Governance Report, which is a part of this report. The annual report on CSR activities is annexed in Annexure-B herewith. The CSR policy may be accessed on the Company’s website http://www.s-papparels.com/assets/img/docs/CSR%20Policy.pdf.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have attached the Consolidated Financial Statements in the Annual Report pursuant to the provisions of the Companies Act, 2013. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also shows a significant increase in revenue.

ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS

In accordance with the evaluation criteria and procedure suggested by the Nomination and Remuneration Committee,

the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics, degree of fulfillment of key responsibilities, effectiveness of meetings etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mrs.S.Shantha (DIN: 00088941), Joint Managing Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. Your Directors recommend her re-appointment.

Key Managerial Personnel of the Company as required pursuant to Section 2 (51) and 203 of the Companies Act, 2013 are

Mr.P.Sundararajan - Chairman and Managing Director.

Mrs.S.Latha - Executive Director

Mr.S.Chenduran - Joint Managing Director

Mrs.S.Shantha - Joint Managing Director

Mrs.P.V. Jeeva - Chief Executive Officer - Garments Division.

Mr.V.Balaji - Chief Financial Officer and

Mrs.K.Vinodhini - Company Secretary & Compliance Officer.

SUBSIDIARIES, JOINT VENTURES ANDASSOCIATE COMPANIES.

The consolidated financial statements of the company and its subsidiaries Crocodile Products Private Limited, S.P.Apparels (UK) (P) Limited and S.P Retail Ventures Limited were prepared in accordance with the applicable accounting standards have been annexed to the Annual Report.

The annual accounts of the subsidiary companies are posted on the website of the Company viz. https://www.s-p-apparels.com/wp/financial-information/ and will also be kept open for inspection by any shareholder at the Registered Office of the Company.

A report containing the salient features of the subsidiaries as required under Section 129(3) of the Companies Act, 2013 has been annexed herewith in Form AOC - 1 and is attached as Annexure-C to this report.

The Company has acquired M/S. Young Brand Apparel Private Limited as a wholly owned subsidiary company from M/S. Bannari Amman Spinning Mill Limited and during the year the Company has incorporated a wholly owned subsidiary company M/s. S.P.Apparels International Private Limited at Srilanka.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy may be accessed at: https://www.s-p-apparels.com/assets/img/docs/POLICY-FOR-DETERMINATION-OF-MATERIALITY-OF-INFORMATION-OR-EVENTS-14.11.2016.pdf

The Company does not have Joint Venture or Associate Company.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March, 2024 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

FINANCE

Prompt repayments, facilitated by healthy cash flows, elevated the standing of your Company. It enabled prudent application of funds and better negotiation strength. This trend is expected to continue.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The directors confirm that the Internal Financial Control (IFC) is adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

AUDITORSa) STATUTORY AUDITORS

M/s. ASA & Associates LLP, Chartered Accountants, Chennai were appointed as the Statutory Auditors of the Company for a period of five years at the Annual General Meeting of the Company held on 19th September 2022 from the conclusion of the 17th Annual General Meeting till the conclusion of the 22nd Annual General Meeting to be held in the year 2027. M/s.ASA & Associates LLP, Chartered Accountants, Chennai have given a certificate of consent under section 139 of the Companies Act 2013 to act as the Statutory Auditors of the Company. The Company has received a certificate from the Statutory Auditors to the effect that their appointment as the Statutory Auditors of the Company, would be within the limits prescribed under section 139 of the Companies Act, 2013.

b) SECRETARIAL AUDITORS

The Board has appointed M/s. MDS & Associates LLP, Company Secretaries, Coimbatore (LLPIN: ABZ-8060) as the Secretarial Auditors of the Company for the year 2024-25 to carry out the Secretarial Audit, pursuant to the provisions of Section 204 of the Companies Act, 2013.

The report of the Secretarial Auditors for the financial year 2023-24 is annexed as Annexure-D to this Report.

c) INTERNAL AUDITOR

The Board has appointed M/s. BM & Associates, Chartered Accountants, Coimbatore as Internal Auditors for the financial year 2024-25 pursuant to the provisions of Section 138 of the Companies Act, 2013.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by the Company is among the best in the Corporate sector. The strength of company’s employees is close to 12,462.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to define the policy and redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee or third parties during the Financial Year.

1. Number of complaints received - Nil

2. Number of complaints disposed of - NA PARTICULARS OF EMPLOYEES

The statement pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is

annexed to Annexure-E attached to this report.

MANAGEMENT DISCUSSION & ANALYSIS

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis Report outlining the business of your Company forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

At a time and age when enterprises are increasingly seen as critical components of the social system, they are accountable not merely to their shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder. The Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective, in the format as specified by SEBI vide Circular CIR/CFD/CMD/10/2015 dated November 04, 2015 (as amended) forms part of this Annual Report.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed and forms part of this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in Regulation 27 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 (as amended).

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the Companies Act, 2013. The details relating to the composition, meetings and functions of the Committee are set out in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by the Board.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has provided for adequate safeguards to deal

with instances of fraud and mismanagement and to report concerns about unethical behaviour or any violation of the Company’s Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Company’s website at https://www.s-p-apparels.com/assets/img/docs/Vigil-Mechanism-Policy_Revised.pdf

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications has been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

INDUSTRIAL RELATIONS

The relationship between the management and the employees at all levels during the year under review has been cordial and productive.

CAUTIONARY NOTE

Certain statements in “management discussions and analysis” section may be forward looking and are stated as required by law and regulations. Many factors, both external and internal, may affect the actual results which could be different from what the directors envisage in terms of performance and outlook.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation, for the contribution made by all the employees at all levels but for whose hard work and support, your Company’s achievements would not have been possible. Your Directors also wish to thank its customers, suppliers and bankers for their continued support and faith reposed in the Company.

---

Mar 31, 2023

The Directors of your Company are pleased to present the 18th Annual Report on the business and operations of the Company together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2023.

FINANCIAL RESULTS

The Company’s financial performance for the year ended 31st March, 2022 is summarised below: (includes discontinued operations)

(in Million)

PARTICULARS	STANDALONE		CONSOLIDATED
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	9395.22	7350.87	10778.81	8594.21
Other Income	227.98	93.70	230.10	94.95
Total Income	9623.20	7444.57	11008.91	8689.22
Total Expenses before Interest & Depreciation	7906.78	5806.74	9353.55	7076.93
Profit before Interest & Depreciation	1716.42	1637.83	1655.36	1612.29
Less: Interest	156.16	105.95	186.19	118.53
Depreciation	337.51	324.07	361.53	345.86
Profit Before Tax	1222.75	1207.81	1107.64	1147.90
Less : Taxation
Provision for Current Tax	302.37	287.17	302.37	291.52
Prev period Tax	(2.62)	(17.70)	(2.62)	(17.70)
Deferred Tax Expenses / (Credit)	4.87	23.99	(17.23)	27.15
Total Tax Expenses	304.62	293.46	282.52	300.97
Profit After Tax from continuing operations	918.13	914.35	825.12	846.93
Profit After Tax from discontinuing operations	-	(82.35)	-	-
Profit After Tax	918.13	832.00	825.12	846.93
Other comprehensive Income (Net of tax)	(66.02)	5.52	(66.02)	5.52
Minority Interest	-	-	(0.30	0.77
Total Comprehensive Income	852.11	837.52	758.80	853.22

Review from Operations:Garment Division:

FY 22 - 23 has been a year with good growth both in terms of quantity and sales revenue, though Q4 had seen some pressure on sales due to inventory pileup with retailers across the globe. The strategies to improve on the capacities are yielding good results.

Spinning industry has undergone a sever stress because of high cotton prices. Due to this the margins dipped in the Garment division. Cotton prices have corrected during later part of the fourth quarter. Further corrections are expected during this year, and this will enable margin expansion going forward.

S.P. Retail Ventures Limited

Financial year 22 - 23 has been a very tough year for the Retail sector. Inflation and higher interest cost is showing some stress in the retail industry.

We have added a children’s brand (Angel & Rocket) a premium brand under S P Retail Ventures Limited. We have also added one more brand under the Retail Ventures portfolio. “HEAD” an international brand has given license to S P Retail Ventures Limited to manufacture and sell goods in India under the brand HEAD. This is in under the Athleisure segment.

We are confident that with brands like “Crocodile”, “HEAD”, “Angel & Rocket” & “ Natalia” SP Retail ventures will be able to raise capital and get listed as a company on its own.

S.P. Apparels (UK) (P) Ltd

During the second half of the financial year 22 - 23, there was a change in the team and the business operation place in UK. The change in the team and the place has caused some disturbance in the revenue in SP - UK.

SP-UK team is confident of revenue growth during the second half of this financial year and is expected to grow faster going forward.

OPERATIONS

The Company achieved a total turnover of Rs.9623.20 Million as against a turnover of Rs.7444.57 Million in the previous year. The Company’s Profit Before Tax is Rs.1222.75 Million during the year, as compared to Rs.1207.81 Million in the previous year, with an increase of 1.24% over the last year. The Company earned a Net Profit of Rs.918.13 Million, as against a Net Profit of Rs.832.00 Million in the previous year.

There was no change in the nature of business of the Company during the financial year ended 31st March, 2023.

DIVIDEND

The Board recommends a dividend of Rs.3/- per Equity Share having a face value of Rs.10/- each (30%) on the Equity Share Capital of Rs.25,09,26,000/- for the year ended on 31st March 2023 aggregating to Rs. 75.28 Million. As per Finance Act, 2020, the Dividend is taxable in the hands of the Shareholders. Dividend on Equity Shares is subject to the approval of the Shareholders at the ensuing Annual General Meeting.

As per the requirements of SEBI notification no. SEBI/LAD/ NRO/GN/2016-17/008 dated 8th July 2016 the Company has formulated a Dividend Distribution Policy which has been duly approved by the Board of Directors. A copy of the Dividend Distribution Policy is available on the Company’s website: http://www.s-p-apparels.com/assets/img/docs/Dividend-Distribution-Policy.pdf

TRANSFER TO RESERVES & SURPLUS

As at March 31, 2023 the Company has reserves of Rs. 6499.74 Million. During the year under review, the

company has transferred Rs.860.44 Million to Retained Earnings (Other Equity).

Further, the Company has also utilized Securities Premium Reserve of Rs.345.00 Million and Retained Earnings of Rs.51.69 Million towards buyback of its shares on 2nd December, 2022. The Company have also transferred a sum equivalent to the nominal value of 6,00,000 equity shares amounting to Rs. 6 Million to the Capital Redemption Reserve account pursuant to Section 69 of the Companies Act, 2013.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/ unclaimed Dividend, the provisions of Section 124 & 125 of the Companies Act, 2013 relating to transfer of Unclaimed dividend to Investor Education and Protection fund do not apply.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 47,25,00,000/- divided into 4,72,50,000 equity shares of Rs. 10/- each and the issued share capital of the Company as at 31.03.2023 stood at Rs.25,69,26,000/- divided into 2,56,92,600 Equity Shares of Rs.10/- each and the subscribed and paid-up share capital of the Company as at 31.03.2023 stood at Rs.25,09,26,000/- divided into 2,50,92,600 Equity Shares of Rs.10/- each.

BUYBACK OF SHARES

In terms of Resolution passed by the Board of Directors at their meeting held on 21.09.2022 and after complying with necessary requirements of SEBI (Buy Back of Securities) Regulations, 2018, the Company had bought back 6,00,000 Equity Shares of Rs.10/- each at an average cost of Rs.585/-aggregating to Rs.35,10,00,000/- from all the existing shareholders on a proportionate basis through Tender Offer process. The Buy-Back offer commenced on Thursday, November 03, 2022 and closed on Thursday, November 17, 2022. The equity shares were bought and extinguished in tranches in compliance with the SEBI (Buy-Back of Securities) Regulations, 2018 and SEBI (Depositories and participants) Regulations, 2018.

Consequent to the above, the paid-up share capital of the Company has been reduced from Rs.25,69,26,000/-divided into 2,56,92,600 equity shares of Rs.10/- each to Rs.25,09,26,000/- divided into 2,50,92,600 Equity Shares of Rs.10/- each as at 31.03.2023.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year

2022- 23 as required under Section 92(3) of the Companies Act, 2013 is available on the website of the Company at the link http://www.s-p-apparels.com/wp/wp-content/ uploads/bsk-pdf-manager/2023/08/SPAL-Form_MGT_7-

2023- Website.pdf

CAPITAL EXPENDITURE

As on 31st March, 2023, the gross fixed assets block stood at Rs.7297.08 Million and net fixed assets block at Rs.4196.11 Million. Additions to Fixed Assets during the year amounted to Rs. 485.03 Million.

BOARD AND COMMITTEE MEETINGS

The details of meetings of Board of Directors and Committees thereof and the attendance of the Directors in such meetings have been enumerated in the Corporate Governance Report.

STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards. Such systems are found to be adequate and are operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India in respect of the meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable

accounting standards had been followed;

(b) the directors had 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 of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and operating effectively and

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

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014. During the year,

the Independent Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of directors and Committee(s). The details of remuneration and /or other benefits of the Independent director are mentioned in the Corporate Governance Report. Further, they have also declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Based on the confirmation / disclosures received from the Directors and on the evaluation of the relationships disclosed, the following Non-Executive Directors are Independent:

Mr.V.Sakthivel, Mr.A.S. Anand Kumar, Mr.C.R.Rajagopal and Mrs.H.Lakshmi Priya

Pursuant to Companies (Appointment and Qualification of Directors) Rules, 2014, the Certificate of Registration received from all the Independent Directors of the Company were taken on note by the Board of Directors.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

The Board of Directors have evaluated the Independent Directors during the year 2022-23 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013

The Company pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy on Nomination and Remuneration for its Directors, Key Managerial Personnel and senior management. The Nomination and Remuneration Policy of the Company can be accessed on the Company’s

website at the link http://www.s-p-apparels.com/wp/wp-content/uploads/bsk-pdf-manager/2022/08/NOMINATION-AND-REMUNERATION-POLICY-11-02-2022.pdf

COMMENTS ON AUDITORS’ REPORT:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. ASA & Associates LLP, Statutory Auditors in their report.

Regarding the remarks made by M/s. MDS & Associates LLP, Secretarial Auditors of the Company in their report, the management ensures timely and due compliance in future this regard.

MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013

The maintenance of cost record as specified by the Central Government under Section 148(1) of the Companies Act, 2013 is applicable to the Company and accordingly the cost accounts and records are made and maintained. However, the appointment of Cost Auditor under the provisions of Section 148 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has given loans, provided guarantees and made investments including investments in mutual funds and complied with the provisions of section 186 of the Companies Act 2013 and as required therein the details of the loans given, guarantees provided and investments made are annexed by way of notes to accounts. However, the Company has not provided security in connection with a loan to any other body corporate or person during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended) during the financial year 2022-23 were in the ordinary course of business and on an arm’s length basis and not material in nature and thus a disclosure in Form AOC-

2 is not required.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Company’s website and may be accessed through the link at http://www.s-p-apparels.com/assets/img/docs/RPT-Policy.pdf

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year as on 31st March 2023 relate and the date of the report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act,

2013 read with Rule 8(3) of the Companies (Accounts) Rules,

2014 is furnished in Annexure-A and is attached to this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Committee has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day-to-day operations of the Company. The Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the

activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, which has been approved by the Board. For other details regarding the CSR Committee, refer to the Corporate Governance Report, which is a part of this report. The annual report on CSR activities is furnished in Annexure-B and is attached with this report. The CSR policy may be accessed on the Company’s website http://www.s-p-apparels.com/wp/wp-content/uploads/ bsk-pdf-manager/2022/05/CSR-Policy.pdf

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have attached the Consolidated Financial Statements in the Annual Report pursuant to the provisions of the Companies Act, 2013. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also shows a significant increase in revenue.

ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS

In accordance with the evaluation criteria and procedure suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics, degree of fulfillment of key responsibilities, effectiveness of meetings etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr.S.Chenduran (DIN: 03173269) was appointed as Joint Managing Director of the Company, by the Board of Directors at their meeting held on 11th August, 2022 with effect from the said date and subsequently, the members of the Company at the Annual General Meeting held on 19th September 2022 have approved the said appointment.

Further, during the year under review, Mrs.S.Shantha (DIN: 00088941) was appointed as Additional Director and Joint Managing Director of the Company, by the Board of Directors at their meeting held on 11th August, 2022 with effect from the said date and subsequently, the members of the Company at the Annual General Meeting held on 19th September 2022 have approved her appointment as Director and Joint Managing Director of the Company.

Mrs.S.Latha (DIN: 00003388), Executive Director retires by rotation at the Annual General Meeting and being eligible, offers herself for re-appointment. Your Directors recommend her re-appointment.

Key Managerial Personnel of the Company as required pursuant to Section 2 (51) and 203 of the Companies Act, 2013 are

Mr.P.Sundararajan- Chairman and Managing Director.

Mrs.S.Latha - Executive Director

Mr.S.Chenduran - Joint Managing Director

Mrs.S.Shantha - Joint Managing Director

Mrs.P.V.Jeeva - Chief Executive Officer - Garment Division.

Mr.V.Balaji - Chief Financial Officer and

Mrs.K.Vinodhini - Company Secretary.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES.

The Company has three subsidiary companies viz. Crocodile Products Private Limited, S.P.Apparels (UK) Private Limited and S.P Retail Ventures Limited.

The consolidated financial statements of the company and its subsidiaries were prepared in accordance with the applicable accounting standards have been annexed to the Annual

Report.

The annual accounts of the subsidiary companies are posted on the website of the Company viz. http://www.s-p-apparels.com and will also be kept open for inspection by any shareholder at the Registered Office of the Company.

A report containing the salient features of the subsidiaries as required under Section 129(3) of the Companies Act, 2013 has been annexed herewith in Form AOC - 1 and is attached as Annexure-C to this report.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy may be accessed at: http://www.s-p-apparels.com/wp/wp-content/uploads/bsk-pdf-manager/2022/08/Policy-on-determining-Material-subsidiaries.pdf

The Company does not have Joint Venture or Associate Company.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March, 2023 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

FINANCE

Prompt repayments, facilitated by healthy cash flows, elevated the standing of your Company. It enabled prudent application of funds and better negotiation strength. This trend is expected to continue.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The directors confirm that the Internal Financial Control (IFC) is adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

AUDITORS

a) STATUTORY AUDITORS

M/s. ASA & Associates LLP, Chartered Accountants, Chennai were appointed as the Statutory Auditors of the Company for a period of five years at the Annual General Meeting of the Company held on 19th September 2022 from the conclusion of the 17th Annual General Meeting till the conclusion of the 22nd Annual General Meeting to be held in the year 2027. M/s.ASA & Associates LLP, Chartered Accountants, Chennai have given a certificate of consent under section 139 of the Companies Act 2013 to act as the Statutory Auditors of the Company. The Company has received a certificate from the Statutory Auditors to the effect that their appointment as the Statutory Auditors of the Company, if made would be within the limits prescribed under section 139 of the Companies Act, 2013.

b) SECRETARIAL AUDITORS

The Board has appointed M/s. MDS & Associates LLP, Company Secretaries, Coimbatore (LLPIN: ABZ-8060) as the Secretarial Auditors of the Company for the year 2023-24 to carry out the Secretarial Audit, pursuant to the provisions of Section 204 of the Companies Act, 2013.

The report of the Secretarial Auditors for the financial year 2022-23 is annexed as Annexure-D to this Report.

c) INTERNAL AUDITOR

The Board has appointed M/s. BM & Associates, Chartered

Accountants, Coimbatore as Internal Auditors for the financial year 2023-24 pursuant to the provisions of Section 138 of the Companies Act, 2013.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by the Company is among the best in the Corporate sector. The strength of company’s employees is close to 13,525.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to define the policy and redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee or third parties during the Financial Year.

1. Number of complaints received - Nil

2. Number of complaints disposed of - NA PARTICULARS OF EMPLOYEES

The statement pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to Annexure-E attached to this report.

MANAGEMENT DISCUSSION & ANALYSIS

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis Report outlining the business of your Company forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

In pursuance of Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report,

containing the initiatives taken by the company from environmental, social and governance perspective, forms part of this Report.

CORPORATE GOVERNANCE

A report on Corporate Governance is annexed and forms part of this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in Regulation 27 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 (as amended).

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the Companies Act, 2013. The details relating to the composition, meetings and functions of the Committee are set out in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by the Board.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has provided for adequate safeguards to deal with instances of fraud and mismanagement and to report concerns about unethical behaviour or any violation of the Company’s Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Company’s website at http://www.s-p-apparels.com/assets/img/docs/Vigil-

Mechanism-Policy_Revised.pdf

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications has been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

INDUSTRIAL RELATIONS

The relationship between the management and the employees at all levels during the year under review has been cordial and productive.

CAUTIONARY NOTE

Certain statements in “management discussions and analysis” section may be forward looking and are stated as required by law and regulations. Many factors, both external and internal, may affect the actual results which could be different from what the directors envisage in terms of performance and outlook.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation, for the contribution made by all the employees at all levels but for whose hard work and support, your Company’s achievements would not have been possible. Your Directors also wish to thank its customers, suppliers and bankers for their continued support and faith reposed in the Company.

---

Mar 31, 2018

DIRECTORS'' REPORT

To

The Members,

The Directors of your Company are pleased to present the 13th Annual Report on the business and operations of the Company together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2018. The Management Discussion and Analysis is also included in this Report.

FINANCIAL RESULTS

The Company''s financial performance for the year ended 31st March, 2018 is summarized below:

('' In Millions)

PARTICULARS	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Sales and other income Revenue from Operations	6,280.10	6,201.33	6,624.15	6,330.01
Other Income	164.55	210.96	163.82	212.98
Total	6444.65	6,412.29	6787.97	6542.99
Profit before Interest & Depreciation	1202.87	1222.71	1221.98	1248.66
Less: Interest	286.20	184.40	287.42	184.91
Depreciation	240.70	209.36	223.89	193.22
Profit Before Tax	675.97	828.98	710.66	870.52
Less : Taxation Provision for Current Tax	252.73	293.20	253.71	308.30
MAT Credit	--	15.09	(1.01)	--
Deferred Tax Expenses / (Credit)	3.12	26.17	(20.17)	26.17
Profit After Tax	420.12	494.52	478.13	536.05
Other comprehensive Income (Net of tax)	(50.03)	21.93	(50.03)	21.93
Minority Interest	-	-	-8.59	-12.58
Total Comprehensive Income	370.09	516.45	419.51	545.40

towards increase in our capacity base. We are planning to increase our capacity by 15% every year. We are also working towards improvement in our utilization levels by 5% which indeed will improve our margins. We are also consistently working on our operational efficiency which is a continuous process. Higher efficiency will improve both revenue and the margin.

The modernization and expansion of our Spinning plant is in process and will be completed by end of FY 2018 - 19. We are also in the process of enabling our processing plant suitable for bio-logical treatment and will be completed by end of FY 2018 - 19. This will enable us to increase our capacity by 20% in the processing plant. All our knitting machines have been installed and are effectively under production as planned.

The financial statements for 2016-17 have been redrawn as per Ind As. Accordingly, the figures stated above for 2016-17 may not be comparable with financials for 2016-17 approved by the Directors dated May 24, 2017.

REVIEW OF OPERATIONS:

Garment Division:

During this financial year, we have added a few new customers to our marque set of customer list. We have added new customers from US such that our geographical customer base is diversified. The strategy to change our product mix is also working well and in couple of years we will settle down to the ideal product mix.

During the current financial year we have increased our sewing capacity by 575 sewing machines. We have added 2 more factories to our list of factories and we are consistently working

Retail Division

Our strategy in retail division during the FY 2016 - 17 was to increase our presence in large format stores and during the current financial year our presence in large format stores has increased by 53%. We are planning to increase our presence in large format stores by another 50% by end of financial year 2018- 19. Our endeavor is to improve our EBO''s through franchise model.

Our distribution channel was affected this year mainly due to the implementation of GST domestically. We have planned to improve our distributor base considerably during the current year and improve the product mix which will improve the revenue during the year to come.

SP UK:

Our subsidiary company SPUK''s total revenue recorded Rs.353.63 million for FY 2017 - 18 as against a revenue of Rs.128.95 million during FY 2016 - 17 at a growth rate of 174%. EBITDA recorded Rs.12.88 million as against Rs. 0.17 million for FY 2016 - 17.

There was no change in the nature of business of the Company during the financial year ended 31st March, 2018.

DIVIDEND

The Board in its meeting held on 14th August, 2018 has recommended a dividend of 10% for the 20,000,000 Redeemable preference shares of Rs.10/-each for the Financial Year 2017-18 amounting to Rs.20.00 million subject to the approval of shareholders at the ensuing Annual General Meeting (Previous Year: Rs.20.00 million). The Board further recommended dividend of 5% on the 2,51,67,600 Equity shares of Rs.10/- each for the Financial Year 2017-18 amounting to Rs.12.58 million subject to the approval of shareholders at the ensuing Annual General Meeting (Previous Year: 5% per equity share).

The dividend payout is in accordance with the Company''s Dividend Distribution Policy. The Dividend Distribution Policy of the Company is available in the following link : www.spapparels.com.

RESERVES & SURPLUS

As at March 31, 2018 the Company had reserves of Rs. 3,773.23 million. During the year under review the company has transferred Rs. 200 Million to Capital Redemption Reserve towards redemption of 10% Redeemable Cumulative Preference Shares and Rs. 370.09 Million to the general reserve.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend, the provisions of Section 124 & 125 of the Companies Act, 2013 relating to transfer of Unclaimed Dividend to Investor Education and Protection Fund does not arise.

SHARE CAPITAL

The issued, subscribed and paid up share capital of the Company as at 31.03.2018 stood at Rs.45,16,76,000/- divided into 2,51,67,600 Equity Shares of Rs.10/- each and 2,00,00,000 10% Redeemable Cumulative Preference Shares of Rs.10/- each. During the year under review the Company has not made any fresh issue of shares

However, the Company has during the current year redeemed its entire 2,00,00,000 10% Redeemable Cumulative Preference Shares of Rs.10/-in accordance with the provisions of Section 55 of the Companies Act,2013 read with Companies (Share capital and debentures) Rules 2014.

Further the Company has during the current year allotted 5,25,000 Equity Shares of Rs.10/- each on preferential basis to the promoters.

CAPITAL EXPENDITURE

As on 31st March, 2018, the gross fixed assets block stood at Rs 5200.47 Million and net fixed assets block at Rs 3123.22 Million. Additions to Fixed Assets during the year amounted to Rs. 373.85 Million.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of the Companies Act, 2013 ("the Act”) and Ind AS 110 - Consolidated Financial Statement, the audited consolidated financial statement is provided in the Annual Report.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE which ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.

SUBSIDIARY COMPANIES

The Company has two subsidiary companies viz. Crocodile Products Private Limited and S.P.Apparels (UK) Private Limited, their financials and details as required Under Section 136 of the Companies Act, 2013 (hereinafter referred to as the ''Act'') are available in the website of the company. These documents will also be available for inspection on all working days, during business hours, at the Registered Office of the Company.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy may be accessed at: http://www.s-p-apparels. com/investors/policies/.

A statement pursuant to first proviso to Section 129(3) of the Companies Act, 2013, in Form No. AOC-1 in respect of subsidiary companies is attached vide Annexure I.

Crocodile Products Private Limited (CPPL):

During the year under review, CPPL has made a profit (after tax) of Rs 28.64 Million as against the profit of Rs 1.64 Million during the previous year. This increase is due to increase in the royalty collection during the current year.

S.P.Apparels (UK) Private Limited:

During the year under review, SPUK, had made a total revenue of Rs.353.63 Million as against a revenue of Rs.128.95 Million during the previous year. EBITDA recorded Rs.12.88 million as against Rs. 0.17 million for FY 2016 - 17.

FIXED DEPOSITS

The Company has not accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 and hence no amount on account of principal or interest were outstanding for payment on the date of the Balance Sheet.

FINANCE

Prompt repayments and pre-closure of certain high cost debt, facilitated by healthy cash flows, elevated the standing of your Company. It enabled prudent application of funds and better negotiation strength. This trend is expected to continue.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly followed by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Mr.S.Chenduran, Director (Operations) retires by rotation at the forthcoming Annual General Meeting and being eligible he offers himself for re-appointment. The Board of Directors has recommended his re-appointment.

The details of the above Director, required to be disclosed under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 form part of the Notice to the ensuing Annual General Meeting. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in term of Section 164 (2) of the Act.

Mr.Srinivas Chidambaram, Non-Executive Director has ceased to be a Director of the Company w.e.f. June 29, 2017. The Board places on record its appreciation towards valuable contribution made by Mr.Srinivas Chidambaram during his tenure as a Director of the Company

The shareholders of the Company at its Annual General Meeting held on August 11, 2017 have approved re-appointment of Mrs.S.Latha, Executive Director on the Board of the Company by passing an ordinary resolution.

The Company has adequate number of Independent Director in compliance with the Act and SEBI (LODR) Regulations, 2015 hereinafter referred to as Listing regulations. Familiarization Program on the Company and its operation was conducted for the Independent Directors.

The Company pays remuneration by way of salary to its Chairman cum Managing Director and fixed monthly remuneration to its Executive Director and Whole Time Director, Director (Operations) in line with the approvals accorded by the General Meetings in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy and also by the Board of Directors.

statement on declaration given by independent

DIRECTOR

The Company has received requisite declaration pursuant to Section 149(6) of Companies Act, 2013 from all independent directors confirming that they meet with the criteria of their Independence laid in Section 149 (6).

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In pursuance of the Act the Company has Key Managerial Personnel. None of the Managing Directors or Whole Time Directors receive any remuneration or commission from the Subsidiary Companies and the remuneration paid to them is within the purview of the provisions of Section 197 read with Schedule V of the Act. The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, are provided in the Annual Report, which forms part of this Report.

In terms of Section 136 of the Act and as advised the Annual Report is being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

The following policies of the Company are available at the Company website www.spapparels.com.

a) Policy for Board Members and Senior Management Personnel; and

b) Nomination and Remuneration Policy.

ANNUAL PERFORMANCE EVALUATION

The Board has carried out an annual evaluation of its own performance, the Directors and also committees of the Board based on the guideline formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.

A note on the familiarization programme adopted by the Company for the orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report which forms part of this Report.

Further, the Independent Directors of the Company met once during the year on February 14, 2018 to review the performance of the Nonexecutive directors, Chairman of the Company and performance of the Board as a whole.

COMMITTEES

As required by the provisions of the Act and Listing Regulations, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

I. Audit Committee

II. Stakeholders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

POLICIES

As required by the provisions of the Act and the Listing Regulations, the following policies have been framed and disclosed on the Company''s website ''www.spapparels.com''.

I. Nomination & Remuneration Policy

II. Related Party Transaction Policy

III. Corporate Social Responsibility Policy

IV. Vigil Mechanism Policy

V. Policy on Determining Material Subsidiaries

VI. Code for Fair Disclosure

VII. Risk Management Policy

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation

17 (9) of the Listing Regulations, the Company has framed an effective Risk Management policy in order to analyze, control or mitigate risk. The board periodically reviews the risks and suggests steps to be taken to control the same.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has a vigil mechanism for reporting of genuine concerns or grievances through its Whistle Blower policy. The Company provides key positions to women professionals and encourages no disparity in any manner. This has created a congenial work atmosphere for women and to express their confidence of reporting of any grievances. The Company affirms that no personnel have been denied access to the Audit Committee. All suspected violations and reportable matters can be reported to the Chairman of the Audit Committee at e-mail id - [email protected]. The Whistle Blower Policy has been posted on the website of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee consisting of Directors Mr. P.Sundararajan - Chairman, Mrs. S.Latha and Mr. V.Sakthivel as members of the committee have formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, which has been approved by the Board. The CSR policy may be accessed on the Company''s website www.spapparels.com. The annual report on CSR activities is annexed (Annexure II) herewith.

During the year the Company has spent Rs 2.40 Million on CSR Activities out of the stipulated sum of Rs 12.73 Million. The Company''s CSR initiatives involve setting the foundation of various programs at a small scale to learn from on-ground realities, getting feedback from community and then putting an enhanced sustainable model to ensure maximum benefit to the community. For this reason, during the year, the Company''s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013 and an amount of Rs 10.33 Million remains unspent. The existing CSR activities are scalable and new initiatives are being considered. Going forward the Company will endeavour to spend on CSR activities in accordance with the legal requirements.

BOARD MEETINGS

The Board of Directors met six times during the financial year on 24.05.2017, 07.07.2017, 14.08.2017, 14.11.2017, 14.02.2018 and 15.03.2018. The Composition of Board, procedure, dates and other details are included in the Corporate Governance Report that forms part of this Report.

AUDIT COMMITTEE

The Audit Committee comprises Independent Directors namely Mr.V.Sakthivel (Chairman), Mr.A.S.Anandkumar and Mr.P.Yesuthasen. During the year all the recommendations made by the Audit Committee were accepted by the Board.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the provisions of the ''Act'' and the Listing Regulations entered into with the Stock Exchanges. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also show a significant increase in Revenues as well as Profitability.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and as required therein the details of the Borrowals, Security, Investment etc., are annexed by way of notes to accounts.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.

Further, these transactions are placed before the Audit Committee and Board of the Company specifying the nature and value of transactions for their consideration and approval.

The Transactions covered by Indian Accounting Standards - IND AS are reported in the Notes to Accounts of the Consolidated Financial Statements as well as Standalone Financial Statements of your Company. The Company''s Policy on dealing with related party transactions is available on the Company''s website.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by the Company is among the best in the Corporate sector. The Company employs close to 12,898 workers.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides for protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and also for the matters incidental thereto. The Company has accordingly adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees at all the workplace within the Company which are based on fundamental principles of justice and fair play.

Further, Anti Sexual Harassment Committee has been constituted at each unit which shall be responsible for redressal of complaints related to sexual harassment. The details of all such complaints and its proper redressal through prompt corrective steps are informed to the Top Management so as to ensure that suitable processes and mechanisms are put in place to ensure that issues of sexual harassment, if any, are effectively addressed.

During the year, no complaints of sexual harassment were received by the Company from any of its Units.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act read with the Companies (Accounts) Rules, 2014 are provided in the Annexure III to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors hereby state that:

a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the said Act, have been followed and there are no material departures from the same;

b) 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 as at March 31, 2018 and of the profit of the Company for the year ended on that date;

c) 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;

d) the Directors have prepared the annual accounts on a ''going concern'' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) 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.

MATERIAL CHANGES AND COMMITMENTS

The Company has during the current year redeemed its entire

2,00,00,000 10% Redeemable Cumulative Preference Shares of Rs.10/- each and has issued and allotted 5,25,000 Equity Shares of Rs.10/- each on preferential basis to the promoters after the balance sheet date. There has been no change in the nature of business of the Company.

SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

In pursuance of Listing Regulations and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Statement is presented in a separate section, forming part of the Annual Report. attached to this Report.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. Certificate from the Secretarial Auditor of the Company confirming the compliance with the conditions of Corporate Governance is also attached to the report on Corporate Governance.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The details of Internal Financial Control (IFC) and their adequacy are included in the Report of Management Discussion and Analysis, which forms part of this report.

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration of Director to the median employee''s remuneration as required by the Act and Companies Rules are appended.

AUDITORS AND AUDITORS REPORT:

a) STATUTORY AUDITORS

M/s. ASA & Associates LLP, Chartered Accountants, Chennai were appointed as Statutory Auditors of the Company, for a term of 5 (five) consecutive years, at the Annual General Meeting held on August 11, 2017. They have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

b) SECRETARIAL AUDITOR

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S.Rajaguru & Associates, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit reports in Form MR-3 for the year ended 31st March, 2018 is annexed to this report. There is no secretarial audit qualification for the year under review.

c) INTERNAL AUDITOR

The Board had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Coimbatore as Internal Auditors for the financial year 2017-18.

AUDITORS REPORT

The Auditor''s Report to the Shareholders does not contain any qualification.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92 (3) of the Act and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT - 9 forms part of this Report.

CONVERGENCE WITH IND AS FROM APRIL 1, 2017

The Ministry of Corporate Affairs (MCA), in 2015, had notified the Companies (Indian Accounting Standards (IND AS)) Rules 2015, which stipulated the adoption and applicability of IND AS in a phased manner. As per these rules, in the second phase all listed Companies including the parent or subsidiaries of such companies will have to prepare their financial statements following Ind AS with effect from 01st April 2017 with comparative periods beginning 01st April 2016. Accordingly, the financial statements for 2017-2018 have been drawn up as per Ind AS and opening Balance sheet as of April 1, 2016 has been restated to reflect the changes brought in by Ind AS.

Reconciliation of Standalone Statement of Profit and Loss as per Ind AS with previous GAAP for the year ended March 31, 2017:

(Rs. in millions)

Particulars	Year ended March 31, 2017
Net profit as per previous GAAP	565.10
1) Rental Income on trade deposit	0.17
2) Interest Expenses on Trade deposit	-0.17
3) Amortization of lease prepayments	-2.96
4) Interest income on security deposits	2.73
5) Additional Charges on preference liability	-26.34
6) Interest Expenses on Unsecured Loans	-20.65
7) Deferral of TUF receivables	-3.09
8) Amortization of TUF Deferral	12.62
9) Amortization of EPCG Deferral	1.88
10) Tax effect on effective portion of cash flow hedges	-11.61
11) Opening Effect on deferral of EPCG on Spare Parts	-1.21
Net profit as per Statement of Profit and loss	516.45

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation, for the contribution made by all the employees at all levels but for whose hard work, and support, your Company''s achievements would not have been possible. Your Directors also wish to thank its customers, suppliers and bankers for their continued support and faith reposed in the Company.

Reconciliation of Consolidated Statement of Profit and Loss as per Ind AS with previous GAAP for the year ended March 31, 2017:

(Rs. in millions)

Particulars	Year ended March 31, 2017
Net profit as per previous GAAP	619.22
1) Rental Income on trade deposit	0.17
2) Interest Expenses on Trade deposit	-0.17
3) Amortisation of lease prepayments	-2.96
4) Interest income on security deposits	2.73
5) Additional Charges on preference liability	-26.34
6) Interest Expenses on Unsecured Loans	-20.65
7) Deferral of TUF receivables	-3.09
8) Amortisation of TUF Deferral	12.62
9) Amortisation of EPCG Deferral	1.88
10) Tax effect on effective portion of cash flow hedges	-11.61
11) Effect of EPCG on Spare parts	-1.23
12) Share of profit attributable to Minority Interest	-25.16
Net profit as per Statement of Profit and loss	545.40

For and on behalf of the Board of Directors

P. Sundararajan S. Latha

Managing Director Executive Director

(DIN : 00003380) (DIN : 00003388)

V. Balaji K. Vinodhini

Chief Financial Officer Company Secretary

Place : Avinashi

Date : 14.08.2018

---

Mar 31, 2017

To

The Members,

The Directors of your Company are pleased to present the 12th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2017. The Management Discussion and Analysis is also included in this Report.

FINANCIAL RESULTS

Highlights of Financial Results for the financial year 2016-2017 are as under:

During the current year we have increased the capacity of yarn production by adding a few machines. Currently we are producing more counts compared to last year.

During the current year we have balanced our dyeing and finishing capacities by adding a compacting machine.

Retail Division:

During the year, EBO business grew due to increase in the number of stores and change in the product mix offered to customers. We have re-aligned our product mix according to the market expectation and fashion trend.

(Rs. In Millions)

Particulars	Standalone		Consolidated
	2016-17	2015-16	2016-17	2015-16
Sales and other income Domestic sales	1,417.97	1,127.08	1546.64	1,086.53
Export Sales	4,809.88	4,241.72	4809.89	4,241.72
Other Income	208.25	48.63	210.27	49.29
Total	6,436.10	5,417.43	6,566.80	5,377.54
Profit before Interest & Depreciation	1,257.76	772.10	1,283.68	733.66
Less: Interest	134.35	252.44	134.87	252.72
Depreciation	223.85	207.15	207.71	201.00
Profit Before Tax	899.56	312.51	941.10	279.94
Less : Taxation Provision for Current Tax	308.29	66.89	308.29	68.45
MAT Credit	-	-14.88		-30.34
Deferred Tax Expenses / (Credit)	26.17	55.62	26.17	55.32
Profit After Tax (before appropriation)	565.10	204.88	606.64	186.51

REVIEW OF OPERATIONS:

Garment Division:

During the financial year, growth in the garment division was supported by the increase in capacities and increase in customer demand. Higher growth has led to increase in margins.

Increase in capacity was due to setting up of new factories as also increase in capacities of the existing factories. During the current year, we have re-aligned our product mix. The basic volume products have increased in percentage when compared to the previous years. This new product mix also helped us improve our worker efficiency and this contributed to revenue growth.

Our Large Format Stores’ sales also have grown substantially due to opening up of new outlets. Our products were well accepted in all regions and our partners have offered us more space looking at the brand’s performance.

E- com business posted good growth as we targeted quality conscious customers.

SPUK :

During the year under review, we have started business relationship with some new customers and also have started working on new products.

DIVIDEND

The Board in its meeting held on 24th May, 2017 has recommended a dividend of 10% for the 20,000,000 Redeemable preference shares of Rs.10/-each for the Financial Year 2016-17 amounting to Rs.20.00 million subject to the approval of shareholders at the ensuing Annual General Meeting (Previous Year: 3% from the date of its allotment, ie.22.09.2011 to 31.03.2016 aggregating Rs.44.00 million). The Board further recommended dividend of 5% on the 2,51,67,600 Equity shares of Rs.10/- each for the Financial Year 2016-17 amounting to Rs.12.58 million subject to the approval of shareholders at the ensuing Annual General Meeting (Previous Year: Nil).

RESERVES & SURPLUS

As at March 31,2017 the Company had reserves of Rs.3576.53 million. During the current year company had transferred Rs.2463.43 million to the reserves. (Share premium Rs.1922.40, Dividend & Dividend tax (Rs.24.07) and profits of Rs.565.10)

Your Company has earned a total profit after tax of 565.10 millions out of which a sum of Rs.20.00 million was transferred to towards dividend proposed to be distributed to Preference shareholders and the remaining has been transferred to Reserves & surplus for the purpose of future expansions and acquisitions.

SHARE CAPITAL

During the year under review, the Company has issued 89,22,388 Equity shares of face value Rs.10 each through an IPO. IPO included 80,22,388 Equity shares as fresh issue and 9,00,000 equity shares by way of offer for sale by New York Life Investment Management India Fund (FVCI) II LLC. The fully paid up Equity Shares of Rs.10/- each of the Company as on March 31, 2017 Rs.25,16,76,000/-, 10% Redeemable Cumulative Preference Shares of Rs.10/- each of the Company as on March 31, 2017 Rs.20,00,00,000/- and total paid up capital of the Company as on March 31, 2017 Rs.45,16,76,000/-.

CAPITAL EXPENDITURE

As on 31st March, 2017, the gross fixed assets block stood at Rs.4829.16 Million and net fixed assets block at Rs.2978.83 Million. Additions to Fixed Assets during the year amounted to Rs.415.66 Million.

SUBSIDIARY COMPANIES

The Company has two subsidiary companies viz. Crocodile Products Private Limited and S. P. Apparels (UK) Private Limited their financials and details as required Under Section 136 of the Companies Act, 2013 (hereinafter referred to as the ‘Act’) are available in the website of the company.

A statement pursuant to first proviso to Section 129(3) of the Companies Act, 2013, in Form No. AOC-1 in respect of subsidiary companies is attached vide Annexure.

Crocodile Products Private Limited:

During the year under review, CPPL has made a profit of Rs.1.6 Million as against the losses of Rs.8.4 Million during the previous year. This increase is due to increase in the royalty collection during the current year.

S. P. Apparels (UK) Private Limited:

During the year under review, SPUK, had made a revenue of GBP 1.47 Million as against a revenue of GBP 0.20 Million during the previous year. SPUK broke even at the PAT level during the current year as against a loss of 1.56 million during the previous year.

FIXED DEPOSITS

The Company has not accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 and hence no amount on account of principal or interest were outstanding for payment on the date of the Balance Sheet.

FINANCE

Prompt repayments and pre-closure of certain high cost debt, facilitated by healthy cash flows, elevated the standing of your Company. It enabled prudent application of funds and better negotiation strength. This trend is expected to continue.

DIRECTORS

a) Change in Director’s Designation:

The Board at its meeting held on 24th August, 2016 had redesignated Mr. Srinivas Chidambaram, Nominee Director, as Non-Whole Time Director of the Company.

b) Directors Retire by Rotation:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Mrs. S. Latha Sundararajan, Executive Director retires by rotation at the forthcoming Annual General Meeting and being eligible she offers herself for re-appointment.

The details of the above Director, required to be disclosed under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 form part of the Notice to the ensuing Annual General Meeting. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in term of Section 164 (2) of the Act.

The Company has adequate number of Independent Director in compliance with the Act and SEBI (LODR) Regulations, 2015 hereinafter referred to as Listing regulations. Familiaraization Program on the Company and its operation was conducted for the Independent Directors. Requisite declaration from the Independent Directors of the Company under Section 149 (7) of the Act confirming that they meet with the criteria of their Independence laid in Section 149 (6) have been obtained.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTOR

The Company has received declaration pursuant to Section 149(6) of Companies Act, 2013 from all independent directors.

KEY MANAGERIAL PERSONNEL AND MANAGERIAL REMUNERATION CRITERIA

In pursuance of the Act the Company has Key Managerial Personnel. None of the Managing Directors or Whole Time Directors receive any remuneration or commission from the Subsidiary Companies and the remuneration paid to them is within the purview of the provisions of Section 197 read with Schedule V of the Act. The Company pays remuneration by way of salary to its Chairman cum Managing Director and fixed monthly remuneration to its Executive Director and Whole Time Director, Director (Operations) in line with the approvals accorded by the General Meetings in pursuance of the recommendation of the Nomination and Remuneration Committee as per the guiding principles laid down in the Nomination and Remuneration Policy and also by the Board of Directors. The information as required by Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended.

ANNUAL PERFORMANCE EVALUATION

The Board has carried out an annual evaluation of its own performance, the Directors and also committees of the Board based on the guideline formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.

A note on the familiarization programme adopted by the Company for the orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report which forms part of this Report.

Further, the Independent Directors of the Company met once during the year on February 14, 2017 to review the performance of the Nonexecutive directors, Chairman of the Company and performance of the Board as a whole.

COMMITTEES

As required by the provisions of the Act and Listing Regulations, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

I. Audit Committee

II. Stakeholders Relationship Committee

III. Nomination and Remuneration Committee

IV. Corporate Social Responsibility (CSR) Committee

POLICIES

As required by the provisions of the Act and the Listing Regulations, the following policies have been framed and disclosed on the Company’s website ‘www.spapparels.com’

I. Nomination & Remuneration Policy

II. Related Party Transaction Policy

III. Corporate Social Responsibility Policy

IV. Vigil Mechanism Policy

V. Policy on Determining Material Subsidiaries

VI. Code for Fair Disclosure

VII. Risk Management Policy

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 17 (9) of the Listing Regulations, the Company has framed an effective Risk Management policy in order to analyze, control or mitigate risk. The board periodically reviews the risks and suggests steps to be taken to control the same.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has a vigil mechanism for reporting of genuine concerns or grievances through its Whistle Blower policy. The Company provides key positions to women professionals and encourages no disparity in any manner. This has created a congenial work atmosphere for women and to express their confidence of reporting of any grievances. The Company affirms that no personnel have been denied access to the Audit Committee. All suspected violations and reportable matters can be reported to the Chairman of the Audit Committee at e-mail id - [email protected]. The Whistle Blower Policy has been posted on the website of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee consisting of Directors Mr. Sundararajan - Chairman, Mrs. S Latha and Mr. V Sakthivel as members of the committee have formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, which has been approved by the Board. The CSR policy may be accessed on the Company’s website www.spapparels.com. The annual report on CSR activities is annexed herewith.

During the year the Company could spend Rs.2.08 Million on CSR Activities out of the stipulated sum of Rs.4.61 Million. The Company’s CSR initiatives involve setting the foundation of various programs at a small scale to learn from on-ground realities, getting feedback from community and then putting an enhanced sustainable model to ensure maximum benefit to the community. For this reason, during the year, the Company’s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013 and an amount of Rs.2.53 Million remains unspent. The existing CSR activities are scalable andnew initiatives are being considered. Going forward the Company will endeavour to spend on CSR activities in accordance with the legal requirements.

BOARD MEETINGS

The Board of Directors met seven times during the financial year on 06.06.2016, 08.07.2016, 19.07.2016, 06.08.2016, 24.08.2016, 14.11.2016 and 14.02.2017. The Composition of Board, procedure, dates and other details are included in the Corporate Governance Report that forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the provisions of the ‘Act’ and the Listing Regulations entered into with the Stock Exchanges. They are prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Consolidated Financials also show a significant increase in Revenues as well as Profitability.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Act and as required therein the details of the Borrowals, Security, Investment etc., are annexed by way of notes to accounts.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.

Further, these transactions are placed before the Audit Committee and Board of the Company specifying the nature and value of transactions for their consideration and approval.

The Transactions covered by Accounting Standards AS-18 are reported in the Notes to Accounts of the Consolidated Financial Statements as well as Standalone Financial Statements of your Company. The Company’s Policy on dealing with related party transactions is available on the Company’s website.

EMPLOYEE WELFARE

The Employee Welfare Initiatives and practices followed by the Company is among the best in the Corporate sector. The Company employs close to 10,070 workers.

PARTICULARSOF EMPLOYEESAND RELATED DISCLOSURES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 provides for protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment and also for the matters incidental thereto. The Company has accordingly adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees at all the workplace within the Company which are based on fundamental principles of justice and fair play.

Further, Anti Sexual Harassment Committee has been constituted at each unit which shall be responsible for redressal of complaints related to sexual harassment. The details of all such complaints and its proper redressal through prompt corrective steps are informed to the Top Management so as to ensure that suitable processes and mechanisms are put in place to ensure that issues of sexual harassment, if any, are effectively addressed.

During the year, no complaints of sexual harassment were received by the Company from any of its Units.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act read with the Companies (Accounts) Rules, 2014 are provided in the Annexure to the Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors hereby state that:

a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III to the said Act, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;

c) 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;

d) the Directors have prepared the annual accounts on a ‘going concern’ basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) 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.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company that would impact the going concern status of the Company and its future operations which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. Further, there has been no change in the nature of business of the Company.

SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS

No significant and material order was passed by any Regulators that have any impact on the going concern status and the operations of the Company.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

In pursuance of Listing Regulations the Corporate Governance Report and Management Discussion and Analysis Statement are attached to this Report. Certificate from the Secretarial Auditor of the Company confirming the compliance with the conditions of Corporate Governance is also attached to this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The details of Internal Financial Control (IFC) and their adequacy are included in the Report of Management Discussion and Analysis, which forms part of this report.

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration of Director to the median employee’s remuneration as required by the Act and Companies Rules are appended.

AUDITORS:

a) STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Coimbatore are statutory auditors of the Company and their appointment expires at the conclusion of the ensuing Annual General Meeting of the Company since their completion of two terms of five continuous years.

M/s. ASA & Associates LLP, Chartered Accountants, Chennai have given a certificate of consent under Section 139 of the Companies Act, 2013 for their appointment at the ensuing Annual General Meeting to act as the statutory auditors of the Company for five years from the conclusion of the ensuing Annual General Meeting.

b) SECRETARIAL AUDITOR

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S.Rajaguru & Associates, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit reports in Form MR-3 for the year ended 31st March, 2017 is annexed to this report. There is no secretarial audit qualification for the year under review.

c) INTERNAL AUDITOR

The Board had appointed M/s BM & Associates, Chartered Accountants as Internal Auditors for the financial year 2016-17.

AUDITORS REPORT

The Auditor’s Report to the Shareholders does not contain any qualification.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92 (3) of the Act and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT - 9 forms part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation, for the contribution made by all the employees at all levels but for whose hard work, and support, your Company’s achievements would not have been possible. Your Directors also wish to thank its customers, suppliers and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board of Directors

P. Sundararajan S. Latha

Managing Director Executive Director

(DIN : 00003380) (DIN : 00003388)

V. Balaji K. Vinodhini

Chief Financial Officer Company Secretary

Place : Avinashi

Date : 07.07.2017

---

Mar 31, 2016

To

The Members,

The Directors of your Company are pleased to present the 11th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31,2016. The Management Discussion and Analysis is also included in this Report.

FINANCIAL RESULTS

The performance of the Company on standalone and consolidated for the year ended 31st March, 2016 is given as under.

(Rs. in Millions)

S.No.	PARTICULARS	STANDALONE 2015-16	STANDALONE 2014-15	CONSOLIDATED 2015-16	CONSOLIDATED 2014-15
1	Export Sales	4241.72	3718.01	4241.72	3718.01
2	Domestic Sales	1127.08	1039.77	1086.53	1007.65
3	Total Sales	5368.80	4757.78	5328.25	4725.66
4	Other Income	48.63	66.93	49.29	66.67
5	Total Income	5417.43	4824.71	5377.54	4792.33
6	EBITDA	940.80	763.90	902.36	755.52
7	EBITDA %	17.52	16.06	16.94	15.98
8	Depreciation	207.15	197.48	201.00	199.67
9	PBIT	733.65	566.43	701.36	555.85
10	PBIT %	13.66	11.91	13.16	11.76
11	Interest	252.44	311.53	252.72	311.60
12	PBT	481.20	254.90	448.64	244.25
13	PBT %	8.96	5.36	8.42	5.17
14	Provision for Taxation	122.51	203.84	123.77	219.49
15	MAT Credit entitlement	14.88	53.43	30.34	53.43
16	PAT (before appropriation)	204.88	104.49	186.51	78.19
17	PAT %	3.82	2.20	3.5	1.65
18	Preference Dividend	44.00	—	44.00	—
19	EPS (Basic) (Rs.)	8.86	5.75	7.88	4.66
20	EPS (Diluted) (Rs.)	8.86	5.64	7.88	4.56

The Company has carried forward profit of Rs. 204.88 millions to the Balance Sheet in respect of the financial year ended 31st March, 2016.

FINANCIAL PERFORMANCE

Your Company has reported top-line growth of 12.84% over the previous year. At Standalone level, the Gross Revenue was at Rs. 5368.80 million compared with Rs. 4757.78 millions in the previous year. The Operating Profit (EBITDA) before tax stood at Rs.940.80 million as against Rs. 763.90 million in the previous year. The Net Profit for the year stood at Rs. 204.88 million as against Rs. 104.49 million reported in the previous year registering an increase of 96.06%.

The Consolidated Gross Revenue for the Financial Year 2015- 2016 was at Rs. 5328.25 million (Previous Year:: Rs.4725.66 million), registering a growth of 12.75%. The Consolidated Operating Profit (EBITDA) stood at Rs. 902.36 million (Previous Year: Rs.755.52 million). The Consolidated Profit after tax stood at Rs. 186.51 million (Previous Year: Rs.78.19 million).

There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

DIVIDEND

Your Directors have recommended a dividend of 3% for the 20,000,000 Redeemable preference shares of Rs.10/-each from the date of its allotment, ie.22.09.2011 to 31.03.2016 aggregating to Rs.44.00 million (Previous Year: nil). This cumulative dividend will be paid upon the approval of the shareholders of the Company at the ensuing Annual General Meeting.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company and its subsidiaries has been prepared in accordance with applicable accounting standards, issued by the Institute of Chartered Accountants of India and is available at the registered office of the Company for the shareholders.

A statement pursuant to first proviso to Section 129(3) of the Companies Act, 2013, in Form No. AOC-1 in respect of subsidiary companies is attached vide Annexure -1.

REVIEW OF OPERATIONS

The Company has increased 120 sewing machines during the year over the previous period, The Company continues its strive to achieve further growth in the current year to meet the expectations of the customers timely.

The Processing Division has achieved 85% utilization of its capacity. The embroidery and printing factories have also achieved 90% of their capacities during the year.

With partial modernization of machines, the Spinning Division has improved its quality of yarn. The 30% production of yarn has been used for captive consumption of the garment division of the Company, thus the improved quality of yarn is used for the fabric.

The efficiency level of the factories of the Garment Division has shown improvement in the range of 5% to 10% during the year under review.

The retail division has shown significant growth in terms of increase of retail stores to 40 across the country. The inner garments business has much penetration in Pan India level.

BOARD MEETINGS

During the financial year 2015-16, the Board of the Company held six meetings on 26th June, 2015, 28th August, 2015, 13th November, 2015, 17th December, 2015, 28th December, 2015 and 29th February, 2016.

SHARE CAPITAL

During the year under review, the Company has converted 72,49,454 numbers of 6% Compulsorily Convertible Preference Shares (6% CCPS) of Rs.10/- each and issued 3,45,212 equity shares of Rs.10/- each paid up (including a premium of Rs.200/-) per share and allotted the same in favor of M/s. Euro Asia Agencies Limited, Hong Kong. These shares have the same rights on pari-passu basis with the existing paid-up equity shares of the Company. The paid up Equity Share Capital as at March 31,2016 Rs.371.45 million.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS.

In terms of Section 186 of the Companies Act, 2013, the Company has made the following during the year:

(a) Loans given to body corporate/firms: S.P.Apparels UK(P) Ltd. (WOS) - Rs.11.62 million

(b) Guarantees/securities given to body corporate/firms: Nil

(c) Investments made in body corporate/firms:

(i) S.P.Apparels UK(P) Ltd. (WOS) - Rs. 14.80 million (against 1,50,000 shares subscribed)

(ii) RASI g Energy Private Limited - Rs. 1,58,400/- (against 1034 shares subscribed)

(iii) OPG Power Generation Private Limited - Rs. 3,08,000/- (against 28000 shares subscribed)

(iv) Netaji Apparels Park- Rs. 17,75,000/- (against 1175 shares subscribed)

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

Pursuant to Section 135 of the Companies Act, 2013, and the relevant rules, the Corporate Social Responsibility (CSR) Committee formulated by the Board has approved a policy on Corporate Social Responsibility which is available on the website of the Company, viz.,www.spapparels.com. The Company''s policy on CSR envisages expenditure in areas falling within the purview of Schedule VII of the Companies Act, 2013.

Your Company''s CSR Committee comprises of the following Directors of the Company

a) Mr. P.Sundararajan - Chairman and Managing Director

b) Mrs. S.Latha - Executive Director

c) Mr. V.Sakthivel - Independent Director

During the year under review, your Company continued and undertaken CSR activities in a much broader scale covering the activities under the Company''s CSR policy.

The average net profits of the Company for the previous three financial years is Rs. 143.80 million. The prescribed CSR expenditure shall be Rs.2.87 million being 2% of the said average net profits. Your Company has expended Rs.0.96 million towards various CSR activities during the year as under.

(Rs. in Millions)
SI No.	CSR Project or Activity identified	Sector in which the Project is Covered	Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken	Amount outlay (budget) project or program wise	Amount spent on the projects or Programs Subheads: Direct expenditure on projects or program Overhead	Cumulative expenditure upto to the reporting period	Amount spent: Direct or through implement ing agency
1	2	3	4	5	6	7	8
1	Promotion & Education	Education	Tiruppur District, Tamilnadu	0.26	Direct - 0.14 Over head- 0.12	0.26	Direct - 0.14 Through Implementing Agency 0.25
2	Environmental	Environment	Chennai, Kadalur Districts, Tamilnadu	0.55	Direct - 0.45 Over head- 0.10	0.55	Direct - 0.45 Through Implementing Agency 0.10
3	Others	Charitable Purpose	Tiruppur, Salem and Erode District, Tamilnadu	0.15	Direct - 0.15	0.15	Direct 0.15
	Total			0.96	0.96	0.96	0.96

The major implementing agencies of these activities are:

a. Tirupur Auxilium Salessian Sisters Society-Marialaya, Tiruppur, Tamilnadu.

b. Tesco Sourcing India Private Limited

The implementation and monitoring of CSR policy and its activities are in compliance with the objectives specified under the Companies Act, 2013 and the rules related thereto.

The balance unspent amount of Rs.1.91 million would be expended during the current financial year 2016-17 including the prescribed amount for the current year.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.

Further, these transactions are placed before the Audit Committee and Board of the Company specifying the nature and value of transactions for their consideration and approval.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors hereby state that:

a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the said Act, have been followed and there are no material departures from the same;

b) 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 as at March 31,2016 and of the profit of the Company for the year ended on that date;

c) 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;

d) the Directors have prepared the annual accounts on a ''going concern¹ basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) 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.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company that would impact the going concern status of the Company and its future operations which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. Further, there has been no change in the nature of business of the Company.

VIGIL MECHANISM

The Company has a vigil mechanism for reporting of genuine concerns or grievances through its Whistle Blower policy. The Whistle Blower Policy has been posted on the website of the Company. The Company provides key positions to women professionals and encourage no disparity in any manner. This has created a congenial work atmosphere for women and to express their confidence of reporting of any grievances.

CONSERVATION OF ENERGY

The Company continues to give major emphasis for conservation of energy. The efficiency of energy utilization in each of the factories is monitored, in order to achieve effective conservation of energy.

TECHNOLOGY ABSORPTION

The manufacturing processes are being constantly updated. Product developments have resulted in reducing the cost of production and also provided flexibility in manufacturing.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. in Millions)

	2015-16	2014-15
Foreign Exchange earned through exports	4172.47	3679.04
Foreign Exchange used	222.98	98.86

BUSINESS RISK MANAGEMENT

The Board has constituted a risk management committee for development and implementation of risk management policy for the Company including identification of elements of risk, if any. As such the Company has no principal risks or uncertainties which threaten the existence of the Company.

ANNUAL EVALUATION

The Board evaluates its performance at its meetings and that of its committees and individual directors as a part of good corporate governance.

This evaluation is broadly based on parameters such as understanding of the Company''s vision, objectives, skills, knowledge, experience, participation and attendance in Board/ Committee meetings.

The performance evaluation of the Chairman and Managing Director of the Company was made by the Independent Directors taking in the account the views of all other Directors. They also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board. The Directors expressed overall satisfaction on the evaluation process.

DIRECTORS

Mr.P.Velusamy and Mr.P.Ashokaraman Directors, retired at the Annual General Meeting held on 30th September, 2015 and they choose themselves not for re-appointment as Directors of the Company. The Board recorded its appreciation for the valuable guidance and services rendered by them during the tenure of their directorship of the Company.

Mr.V.Senthil, Independent Director, resigned from the Board effective from 13th November, 2015 and the Board placed on record its appreciation for the valuable services rendered by him during his tenure.

M/s. P.Yesuthasen, A.S.Anand Kumar, and G.Ramakrishnan were appointed as Independent Directors on the Board of the Company, for a term of 5 (five) years, not liable to retire by rotation in compliance with the provisions of the Companies Act, 2013 and the rules made there under.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Mrs.S.Latha, Executive Director and Mr.S.Chenduran, Director (Operations) retire by rotation at the forthcoming Annual General Meeting and, being eligible they offer themselves for re-appointment.

The Board at its meeting held on 6th June, 2016 considered and approved re-appointment of Mrs.S.Latha, Executive Director of the Company for a period of 5 years with effect from 16th August, 2016 (previous 5 year term expires on 15th August, 2016) and payment of remuneration to her subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting as per the applicable provisions of the Companies Act, 2013.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Coimbatore, (Firm Registration No.008072S), The retiring statutory auditors, are eligible for re-appointment and have given a certificate of consent under Section 139 of the Companies Act, 2013 for their appointment at the ensuing Annual General Meeting to act as the statutory auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

SECRETARIAL AUDITOR

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S.Rajaguru & Associates, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report in Form MR-3 for the year ended 31st March, 2016 is annexed vide Annexure No.2. There is no secretarial audit qualification for the year under review.

PUBLIC DEPOSITS

The Company has not accepted any deposits from public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 and hence no amount on account of principal or interest were outstanding for payment on the date of the Balance Sheet.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return in Form MGT-9 is annexed herewith vide Annexure-3.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of employees as applicable are given hereunder.

					Date of	Remune -	Last
No.	Name	Age	Designation & Nature of duties	ULUallTICaXIOn & Experience	commen cement	ration Rs.Lacs	Employ ment held
1	Mr. P. Sundararajan	60	Chairman and Managing Director	B.Sc (35 years)	18.11.05	84.00	Partner -S.P. Apparels

Notes:

(i) Nature of employment: contractual.

(ii) The remuneration includes salary and other perquisites evaluated as per Income Tax Rules wherever necessary.

(iii) Mr.P.Sundararajan, Chairman and Managing Director is related to Mrs.S.Latha, Executive Director, and Mr.S.Chenduran,Director (Operations).

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis is annexed (Annexure-4) covering the industry scenario, opportunities and growth prospects.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation, for the contribution made by the employees at all levels but for whose hard work, and support, your Company''s achievements would not have been possible. Your Directors also wish to thank its customers, suppliers and bankers for their continued support and faith reposed in the Company.

On behalf of the Board of Directors,

Avinashi P.SUNDARARAJAN

06.06.2016 Chairman and Managing Director