naga limitednotice to the shareholders notice is hereby given that the twenty third annual general...

NAGA LIMITED

23rd

ANNUAL REPORTand Statement of Accountsfor the Year Ended 31st March 2014

Since 1962

23rd

ANNUAL REPORT

AND

STATEMENT OF ACCOUNTS

FOR THE YEAR ENDED 31st MARCH 2014

BOARD OF DIRECTORSSri. K.S. KAMALAKANNANChairman & Managing Director

Smt. MAGESWARI KANNANJoint Managing Director

Sri. SOUNDER KANNANWhole - Time Director

Sri. L.A. IRUDAYARAJIndependent Director

Dr. K. VENKATACHALAMIndependent Director

Sri. S. RAMESHIndependent Director

Sri. V. MARIKANNANCompany Secretary

AUDITORSM/s. D. SAMPATHKUMAR & Co.,Chartered Accountants5, South Boag Road, T-Nagar,Chennai - 600 017

BANKERS :AXIS BANK LIMITED, DINDIGULSTATE BANK OF INDIA, DINDIGULKARUR VYSYA BANK, DINDIGULSTANDARD CHARTERED BANK, MUMBAI

REGISTERED OFFICE :No.1, Anna Pillai Street,Chennai - 600 001

FACTORIES1) Naga Limited - Foods (Unit - I), No.1, Trichy Road, Dindigul - 624 0052) Naga Limited - Foods (Unit - II), No.133, Trichy Road, Dindigul - 624 0053) Naga Limited - Retail, No.1, Modern Nagar, Karur Road, Dindigul - 624 0054) Naga Limited - Minerals, No.9, Trichy Road, Dindigul - 624 0055) Naga Limited - Detergents, No.1, Oddanchatram Road, Vedasandur - 624 710

NAGA LIMITED

Since 1962

CHAIRMAN’S SPEECH

DEAR STAKEHOLDERS OF NAGA,

It is my pleasure to place your Company’s 23rd

Annual General Meeting and presenting thefinancial statements for the year 2013 - 2014 before you.

Your company grew its consolidated revenues by 14.69% over the previous year, touchingRs.424.67 crores. But the cash profit is less by 5.74% comparing to last year. This is due

to increase in finance cost and other direct expenses.

The total production of all divisions has raised to 3,83,837 MT as against previous yearproduction of 3,56,000 MT.

Further, long term Measures are under consideration and implementation that will boost theefficiency and productivity.

Challenge is growing from the current level to step ahead.

Presenting below, Business performance of each divisions.

FOODS :

There is increase in production by 8% during the year compared to last year. We are expectingthis growth for this year also.

Past years comparative statement for 5 years production are given below :

DETERGENTS :

Detergents business established in 1990 and is in operation for 24 years. NAGA, is the thirdlargest manufacturer of detergents of M/s. Hindustan Unilever Limited.

Past years comparative statements for five years production are given below.

MINERALS :

The year 2013-14, we sustained the 1,00,000 mark in both production and sales, with 5%growth. We brought JUMBO MILL and Micro Mill in our production process. This will enableus to market in new areas such as paint, plastic, PVC Industries. We have seen 40% growthin our live stock industry.

A 23rd ANNUAL REPORT 2013-2014

Year

Production MT

Growth %

2013-14 2012-13 2011-12 2010-11 2009-10

Production MT 1,46,769 1,35,220 1,35,216 1,30,309 1,12,292

8 -- 4 16 (6)

Year

Production MT

Growth %

2013-14 2012-13 2011-12 2010-11 2009-10

Production MT 1,08,991 1,03,950 63,889 70,965 68,455

5 61 (10) 4 11

Year

Production MT

Growth %

2013-14 2012-13 2011-12 2010-11 2009-10

Production MT 1,28,077 1,16,891 97,657 80,645 66,857

10 20 21 21 21

NAGA LIMITED

B 23rd ANNUAL REPORT 2013-2014

WINDMILLS :

The Energy Division of your company now has total 10 windmills with an installed capacityof 8175KW compared to its humble beginning in 2003 with 2 windmills and installed capacityof 1500KW.

Owing to the poor evacuation by the TANGEDCO the generation had comparatively been 43lacs units less than last year. The issue was represented at various forums.

The comparative statement of the last five years units generated is as below.

OTHER DEVELOPMENTS :

SOLAR :

We have installed 600 KW solar power on the roof of the Detergent Unit, Vedasandur. Thegeneration of power was satisfactory and in line with expectations. Grid connectivity is underprogress and shall be commissioned during July 2014. This will ensure optimum usage ofenergy generated.

FINANCIAL INFORMATION :

The quantum leap in the business development is reflected in the company’s Book Value ofthe equity shares of Rs.10/- each for the last five years as below, thus maximising the wealthof the shareholders.

FINANCE :

(a) Our Turnover has increased by 14.69%(b) Our Net Profit has decreased by 27.83%(c) Our Cash Profit has decreased by 5.74%

DIVIDEND POLICY :

Taking into consideration the overall profitability position, the Board of Directors haverecommended a dividend of 6% on the Equity Share of Rs. 10/- each for the year 2013-14.The total amount of equity dividend payable including dividend tax is Rs. 99.36 lacs.

GRATITUDE :

We are thankful to the all stakeholders viz., Shareholders, Directors, Employees, Banks andFinancial Institutions, Auditors, Consultants, Service Providers and Government Departmentsfor continued support and encouragement.

GOD BE WITH NAGA FAMILY.K.S. Kamalakannan

Chairman & Managing Director.

NAGA LIMITED

Year

WEG UnitsGenerated in lacs

2013-14 2012-13 2011-12 2010-11 2009-10

120

Division UnitsConsumed in lacs

Excess / (Short)Consumption

174

54

163

131

(32)

118

137

19

141

138

(3)

135

123

(12)

Year

Per Share Value

2013-14 2012-13 2011-12 2010-11 2009-10

Rs.43.41 Rs.37.00 Rs.26.62 Rs.23.08 Rs.18.26

NOTICE TO THE SHAREHOLDERS

Notice is hereby given that the Twenty Third Annual General Meeting of the Members ofM/s. NAGA LIMITED will be held at the Presidency Club, No.51, Ethiraj Salai, Egmore,Chennai-600 008 on Friday the 01st August, 2014 at 12.15 P.M. to transact the following business:

AGENDAORDINARY BUSINESS:1. To receive, consider and adopt the Financial Statements of the Company for the year ended

on 31st March 2014 consisting of Audited Balance Sheet as at 31st March 2014 and thestatement of profit and loss account for the year ended on that day together with thereports of the Board of Directors’ and Auditors’ thereon.

2. To declare a dividend on the equity shares of the Company.3. To appoint a Director in place of Sri. Sounder Kannan (Holding DIN 01603823), who retires

by rotation and being eligible, offers himself for re-appointment.4. To appoint M/s. D. Sampathkumar & Co., Chartered Accountants (Registration No. 003556S)

as statutory auditors of the Company and fix their remuneration.

SPECIAL BUSINESS:

Item No.5

REAPPOINTMENT OF SRI. K.S. KAMALAKANNAN, CHAIRMAN AND MANAGING DIRECTOR

To consider and if thought fit,to pass with or without modification(s), the following resolutionas Special Resolution :

“RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicableprovisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part IIsection II thereto and subject to such approvals, if any, as may be necessary, consent ofthe Company be and is hereby accorded to the appointment of Sri. K.S. Kamalakannan(holding DIN 01601589) as the Chairman and Managing Director of the Company for a periodof Three (3) years w.e.f. 01.08.2014, not liable to retire by rotation, on the terms andconditions, as set out in the explanatory statement attached to this notice and herebyapproved, with liberty to the Board of Directors to revise the terms as to remuneration,from time to time within the limits provided for in the said schedule V part II section II orany amendment thereof for the time being in force.”

Item No.6

REAPPOINTMENT OF SMT. MAGESWARI KANNAN, JOINT MANAGING DIRECTOR

To consider and if thought fit, to pass with or without modification(s), the followingresolution as Special Resolution:

“RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicableprovisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part IIsection II thereto and subject to such approvals, if any, as may be necessary, consent ofthe Company be and is hereby accorded to the appointment of Smt. Mageswari Kannan(holding DIN 02107556) as the Joint Managing Director of the Company for a period ofThree (3) years w.e.f. 01.08.2014, liable to retire by rotation, on the terms and conditions,as set out in the explanatory statement attached to this notice and hereby approved, withliberty to the Board of Directors to revise the terms as to remuneration, from time to timewithin the limits provided for in the said schedule V part II section II or any amendmentthereof for the time being in force.”

1

NAGA LIMITED

23rd ANNUAL REPORT 2013-2014

Item No.7

REAPPOINTMENT OF SRI. SOUNDER KANNAN, WHOLE - TIME DIRECTOR

To consider and if thought fit, to pass with or without modification(s), the following

resolution as Special Resolution:

“RESOLVED that pursuant to the provisions of Section 190, 196, 197 and other applicable

provisions, if any, of the Companies Act, 2013 (“the Act”) read with schedule V part II

section II thereto and subject to such approvals, if any, as may be necessary, consent of

the Company be and is hereby accorded to the appointment of Sri. Sounder Kannan (holding

DIN 01603823) as the Whole-Time Director of the Company for a period of Three (3) years

w.e.f. 27.03.2014, liable to retire by rotation, on the terms and conditions, as set out in

the explanatory statement attached to this notice and hereby approved, with liberty to the

Board of Directors to revise the terms as to remuneration, from time to time within the

limits provided for in the said schedule V part II section II or any amendment thereof for

the time being in force.”

Item No.8

INCREASING BORROWING POWER OF THE BOARD OF DIRECTORS

To consider and if thought fit, to pass with or without modification(s), the following

resolutions as Special Resolutions:

“RESOLVED that in supersession of the ordinary resolutions adopted at the extraordinary

general meeting of the Company held on 12th September 2012 and pursuant to the provisions

of section 180 (1) (c) and other applicable provisions, if any, of the Companies Act, 2013

including any statutory modifications or any amendments or any substitution or re-enactment

thereof, if any, for the time being in force and all other applicable Acts, laws, rules,

regulations and guidelines for the time being in force, the consent of the Company be and

is hereby accorded to the Board of Directors of the Company for borrowing from time to

time as they may think fit, any sum or sums of money not exceeding Rs. 400 crores (Rupees

four hundred crores only) [including the money already borrowed by the Company] on such

terms and conditions as the Board may deem fit, whether the same may be secured or

unsecured and if secured, whether by way of mortgage, charge or hypothecation, pledge or

otherwise in any way what so ever, over or in any respect of all, or any of the company’s

assets and effects or properties whether movable or immovable, including stock in trade,

notwithstanding that the money to be borrowed together with the money already borrowed

by the Company (apart from the temporary loans obtained from the company’s bankers in

the ordinary course of business) and remaining un-discharged at any given time, exceed

the aggregate, for the time being, of the paidup capital of the Company and its free

reserves.”

“RESOLVED FURTHER that for the purpose of giving effect to the above resolutions, the

Board of Directors of the Company be and is hereby authorised to take all such actions and

to give all such directions and to do all such acts, deeds, matters and things as may be

necessary and / or expedient in that behalf. ”

2 23rd ANNUAL REPORT 2013-2014

NAGA LIMITED

3

Item No.9

INCREASE IN THE REMUNERATION PAYABLE TO THE EXISTING RELATIVE OF DIRECTORS OCCUPYINGTHE POSITION OF OFFICE OR PLACE OF PROFIT.

To consider and if thought fit to pass with or without modification(s), the following resolutionas Special Resolution:

“RESOLVED that pursuant to the provisions of the Companies Act, remuneration payable toSri. D. Vijay Anand, Vice-President, Foods Division, Son in law of Sri. K.S. Kamalakannan,Chairman & Managing Director, and subject to such approvals, be increased upto a sum notexceeding Rs. 29.50 lakhs per annum and on the terms and conditions, as set out in theexplanatory statements attached to this notice and hereby approved, with liberty to theBoard of Directors to revise the terms as to remuneration, from time to time within thelimits depending upon the performance of the individual concerned and subjected to therecommendations of the Nomination and Remuneration Committee, with effect from01.03.2014 be and is hereby ratified.”

Item No.10



“RESOLVED that pursuant to the provisions of the Companies Act, remuneration payable toSmt. Monaa Kannan, CEO, Retail Division, Daughter in law of Sri. K.S. Kamalakannan,Chairman & Managing Director, and subject to such approvals, be increased upto a sum notexceeding Rs.29.50 lakhs per annum and on the terms and conditions, as set out in theexplanatory statements attached to this notice and hereby approved, with liberty to theBoard of Directors to revise the terms as to remuneration, from time to time within thelimits depending upon the performance of the individual concerned and subjected to therecommendations of the Nomination and Remuneration Committee, with effect from01.03.2014 be and is hereby ratified.”

Item No.11



“RESOLVED that pursuant to the provisions of the Companies Act, remuneration payable toMs. M. Jayalalitha, CEO, Detergents Division, Sister of Smt. Mageswari kannan, JointManaging Director, and subject to such approvals, be increased upto a sum not exceedingRs.29.50 lakhs per annum and on the terms and conditions, as set out in the explanatorystatements attached to this notice and hereby approved, with liberty to the Board of Directorsto revise the terms as to remuneration, from time to time within the limits dependingupon the performance of the individual concerned and subjected to the recommendationsof the Nomination and Remuneration Committee, with effect from 01.03.2014 be and ishereby ratified.”


NAGA LIMITED

Item No.12



“RESOLVED that pursuant to the provisions of the Companies Act, remuneration payable toSri. M. Sukumar, Commercial Manager, Minerals Division, Brother of Smt. Mageswari Kannan,Joint Managing Director, and subject to such approvals, be increased upto a sum not exceedingRs.29.50 lakhs per annum and on the terms and conditions, as set out in the explanatorystatements attached to this notice and hereby approved, with liberty to the Board of Directorsto revise the terms as to remuneration, from time to time within the limits dependingupon the performance of the individual concerned and subjected to the recommendationsof the Nomination and Remuneration Committee, with effect from 01.03.2014 be and ishereby ratified.”

Item No.13



“RESOLVED that pursuant to the provisions of the Companies Act, remuneration payable toSmt. Lakshmi Vijay Anand, CEO, Foods Division, Daughter of Sri. K.S. Kamalakannan,Chairman & Managing Director, and subject to such approvals, be increased upto a sum notexceeding Rs.29.50 lakhs per annum and on the terms and conditions, as set out in theexplanatory statements attached to this notice and hereby approved, with liberty to theBoard of Directors to revise the terms as to remuneration, from time to time within thelimits depending upon the performance of the individual concerned and subjected to therecommendations of the Nomination and Remuneration Committee, with effect from01.03.2014 be and is hereby ratified.”

Item No. 14

REAPPOINTMENT OF SRI. S. RAMESH AS AN INDEPENDENT DIRECTOR


“RESOLVED that pursuant to the provisions of sections 149, 150, 152 and any other applicableprovisions of the Companies Act, 2013 and rules made thereunder (including any statutorymodification(s) or re-enactment thereof for the time being in force) read with schedule IVto the Companies Act, 2013, Sri. S. Ramesh (holding DIN 01620265), be and is hereby re-appointed as an independent director of the Company, not liable to retire by rotation tohold office for second consecutive five years untill the conclusion of 28th AGM or upto 30thSeptember 2019 whichever is earlier.”


NAGA LIMITED

Item No. 15

REAPPOINTMENT OF SRI. L.A. IRUDAYARAJ AS AN INDEPENDENT DIRECTOR


“RESOLVED that pursuant to the provisions of sections 149, 150, 152 and any other applicableprovisions of the Companies Act, 2013 and rules made thereunder (including any statutorymodification(s) or re-enactment thereof for the time being in force) read with schedule IVto the Companies Act, 2013, Sri. L.A. Irudayaraj (holding DIN 01973946), be and is herebyre-appointed as an independent director of the Company, not liable to retire by rotation tohold office for second consecutive five years untill the conclusion of 28th AGM or upto 30thSeptember 2019 whichever is earlier.”

Item No.16

CREATION OF CHARGES ON THE ASSETS OF THE COMPANY

To consider and if thought fit to pass with or without modification(s), the following resolutionsas Special Resolutions:

“RESOLVED THAT in supersession of the Ordinary Resolution passed at the Extra-ordinaryGeneral Meeting of the shareholders of the Company held on September 29, 2000 andpursuant to Section 180(1)(a ) and any other applicable provisions of the Companies Act,2013 and the rules made thereunder (including any statutory modification(s) or re-enact-ment thereof for the time being in force), consent of the shareholders of the Company beand is hereby accorded for creation by the Board of Directors on behalf of the Company, ofsuch mortgages/ charges/ hypothecation and floating charges (in addition to the existingmortgages / charges / hypothecation created by the Company in favour of the lenders) insuch form and in such manner as may be agreed to between the Board of Directors and thelenders, on all or any of the present and future immovable and / or movable properties ofthe Company wherever situated, of every nature and kind whatsoever to secure any IndianRupee or foreign currency loans, Debentures, advances and all other moneys payable by theCompany to the lenders concerned, subject, however, to an overall limit of Rs.400 Crores(Rupees Four Hundred Crores only) of loans or advances already obtained or to be obtainedfrom, in any form including by way of subscription to debentures issued or to be issued bythe Company to, any financial institution, bank, body corporate, company, insurer or to thegeneral public.”

RESOLVED FURTHER that the Board be and is hereby authorized to do all such acts, deedsand things and to sign all such documents as may be necessary, expedient and incidentalthereto to give effect to this resolution.”

BY ORDERS OF THE BOARD

Place : Chennai For NAGA LIMITED

Date : 12.05.2014 V. MarikannanCompany Secretary


NAGA LIMITED

Note:

A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT APROXY TO ATTEND AND VOTE ON POLL ON HIS BEHALF. A PROXY NEED NOT BE A MEMBEROF THE COMPANY.

A person can act as proxy on behalf of members not exceeding fifty (50) and holding in theaggregate not more than ten percent of the total share capital of the Company.

The instrument appointing the proxy must be deposited at the Registered Office of theCompany not less than 48 hours before the commencement of the meeting.

An explanatory statement pursuant to Section 102 (1) of the Companies Act, 2013, relating tothe Special Business to be transacted at the meeting is annexed hereto.

Pursuant to Clause 49 of the Listing Agreement additional information on directorsseeking appointment / re-appointment at the annual general meeting is provided in the annualreport.

The Register of Members and the Share Transfer Books of the Company will remain closedfrom 29.07.2014 to 01.08.2014 (both days inclusive).

Members holding shares in physical form are requested to notify change of address and changein bank mandate if any, to M/s. Cameo Corporate Services Limited, “Subramanian Building”No.1, Club House Road, Chennai – 600 002, the Registrar and Share Transfer Agents and thosewho hold shares in dematerialized form are requested to notify their Depository Participants(DP) any change in address and/or bank mandate.

Members who are holding shares more than one folio under physical form may approach theCompany's Share Transfer Agent for consolidation with respective details.

The Securities and Exchange Board of India (SEBI) has mandated the submission of PermanentAccount Number (PAN) by every participant in securities market. Members holding shares inelectronic form are, therefore, requested to submit the PAN to their Depository Participantswith whom they are maintaining their demat account(s). Members holding shares in physicalform can submit their PAN details to the Registrar and Share Transfer Agent.

Members are requested to bring their Client ID and DP ID or Folio Numbers, as may be applicable,for easy identification of attendance at the meeting.

Corporate Members intending to send their authorized representatives to attend the Meetingare requested to send a certified copy of Board resolution authorizing their representative toattend and vote on their behalf at the Meeting.

Electronic copy of the Annual Report for the financial period ended 31.03.2014 is being sentto all the members whose email IDs are registered with the Company/Depository Participants(s)for communication purposes unless any member has requested for a hard copy of the same.For members who have not registered their email address, physical copy of the Annual Reportis being sent in the permitted mode.

Electronic copy of the Notice of the 23rd Annual General Meeting of the Company inter aliaindicating the process and manner of e-voting along with Attendance Slip and Proxy Form is


NAGA LIMITED

being sent to all the members whose email IDs are registered with the Company/DepositoryParticipants(s) for communication purposes unless any member has requested for a hard copyof the same. For members who have not registered their email address, physical copy of theNotice of the 23rd Annual General Meeting of the Company inter alia indicating the processand manner of e-voting along with Attendance Slip and Proxy Form is being sent in the permittedmode.

Members may also note that the Notice of the 23rd Annual General Meeting and the AnnualReport for the financial period ended on 31.03.2014 will also be available on the Company'swebsite www.nagamills.com for their download. The physical copies of the aforesaid documentswill also be available at the Company's Registered Office in Chennai for inspection duringnormal business hours on working days. Even after registering for e-communication, membersare entitled to receive such communication in physical form, upon making a request for thesame, by post free of cost. The investors may contact the Company Secretary for redressal oftheir grievances/queries. For this purpose, they may either write to him at the Registeredoffice address or e-mail their grievances/queries to the Company Secretary at the followinge-mail address: [email protected]

Members are requested to bring their copy of the Annual Report with them to the AnnualGeneral Meeting.

Members seeking any information or clarifications on the Annual Report are requested tosend the written queries to the Company at least Two Weeks before the meeting to enable theCompany to compile the information and provide replies at the meeting.

All documents referred to in the accompanying Notice and the Explanatory Statement shall beopen for inspection at the Registered Office of the Company during normal business hours(10.00 am to 5.00 pm) on all working days, up to and including the date of the Annual GeneralMeeting of the Company.

E-VOTING

In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of theCompanies (Management and Administration) Rules, 2014, the Company is pleased to providemembers facility to exercise their right to vote at the 23rd Annual General Meeting (AGM) byelectronic means and the business may be transacted through e-Voting Services provided byCentral Depository Services (India) Limited (CDSL):

The Company has appointed Mr. G.Sreenivasa Rao (Membership no. 5691), Practicing CompanySecretary, representing M/s.G.S.R. & Co., to act as the Scrutinizer for conducting the electronicvoting process in a fair and transparent manner.The procedure and instructions for the votingthrough electronic means is, as follows:

The voting period begins on 27th July, 2014 (10.00 am) and ends on 28th July, 2014 (6.00 pm)During this period shareholders' of the Company, holding shares either in physical form or indematerialized form, as on the cut-off date 4th July, 2014 , may cast their vote electronically.The e-voting module shall be disabled by CDSL for voting thereafter.

The shareholders should log on to the e-voting website www.evotingindia.com during thevoting period.

Click on “Shareholders” tab.

Now, select the “COMPANY NAME” from the drop down menu and click on “SUBMIT”


NAGA LIMITED

Now Enter your User ID

For CDSL: 16 digits beneficiary ID,

For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

Members holding shares in Physical Form should enter Folio Number registered with theCompany.

Next enter the Image Verification as displayed and Click on Login.

If you are holding shares in demat form and had logged on to www.evotingindia.com andvoted on an earlier voting of any company, then your existing password is to be used.

If you are a first time user follow the steps given below:

For Members holding shares in Demat form and in Physical form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department(Applicable for both demat shareholders as well as physical shareholders)

Members who have not updated their PAN with the Company/DepositoryParticipant are requested to use the first two letters of their name andthe 8 digits of the sequence number in the PAN field.

In case the sequence number is less than 8 digits enter the applicablenumber of 0's before the number after the first two characters of thename in CAPITAL letters. Eg. If your name is Ramesh Kumar withsequence number 1 then enter RA00000001 in the PAN field.

Sequence number has been provided as Sl. No. in the address label.

DOB Enter the date of birth as recorded in your demat account or in the companyrecords for the said demat account or folio in dd/mm/yyyy format.

Dividend Bank Enter the dividend Bank Details as recorded in your demat account or in theDetails company records for the said demat account or folio.

Please enter the DOB or Dividend Bank Details in order to login. If thedetails are not recorded with the depository or Company please enterthe member id / Folio Number in the Dividend Bank details field.

After entering these details appropriately, click on “SUBMIT” tab.

Members holding shares in physical form will then directly reach the Company selection screen.However, members holding shares in demat form will now reach 'Password Creation' menuwherein they are required to mandatorily enter their login password in the new passwordfield. Kindly note that this password is to be also used by the demat holders for voting forresolutions of any other company on which they are eligible to vote, provided that companyopts for e-voting through CDSL platform. It is strongly recommended not to share your passwordwith any other person and take utmost care to keep your password confidential.

For Members holding shares in physical form, the details can be used only for e-voting on theresolutions contained in this Notice.

Click on the EVSN for the relevant <Company Name> on which you choose to vote.


NAGA LIMITED

On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option“YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that youassent to the Resolution and option NO implies that you dissent to the Resolution.

Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmationbox will be displayed. If you wish to confirm your vote, click on “OK”, else to change yourvote, click on “CANCEL” and accordingly modify your vote.

Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

You can also take out print of the voting done by you by clicking on “Click here to print”option on the Voting page.

If Demat account holder has forgotten the same password then Enter the User ID and theimage verification code and click on Forgot Password & enter the details as prompted by thesystem.

Note for Institutional Shareholders

Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on tohttps://www.evotingindia.co.in and register themselves as Corporates.

A scanned copy of the Registration Form bearing the stamp and sign of the entity should beemailed to [email protected].

After receiving the login details they have to create a compliance user should be created whowould be able to link the account(s) for which they wish to vote on.

The list of accounts should be mailed to [email protected] and on approval ofthe accounts they would be able to cast their vote.

A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued infavour of the Custodian, if any, should be uploaded in PDF format in the system for thescrutinizer to verify the same.

In case you have any queries or issues regarding e-voting, you may refer the Frequently AskedQuestions (“FAQs”) and e-voting manual available at www.evotingindia.co.in under help sectionor write an email to [email protected].

The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. Theresult of the voting on the Resolutions at the Meeting shall be announced by the Chairman orany other person authorized by him on 2nd August, 2014. The results declared alongwith theScrutinizer's report, will be posted on the Company's website and on CDSL's website on 2ndAugust, 2014.

I. EXPLANATORY STATEMENT AS REQUIRED UNDER SECTION 102(1) OF THE COMPANIESACT, 2013.

Item No.5,6 & 7

The Board of Directors of the Company at its meeting held on 10th February 2014 hasappointed Sri. Sounder Kannan (holding DIN 01603823) as the Whole-Time Director of theCompany as recommended by the Remuneration Selection Committee subject to the approvalof Shareholders for a period of 3 years w.e.f. 27.03.2014 at the remuneration, in accordancewith norms laid down in Schedule V Part II Section II and other applicable provisions of theCompanies Act, 2013.


NAGA LIMITED


NAGA LIMITED

Other payments (for each of the above persons) :

The Board of Directors of the Company at its meeting held on 12th May 2014 has appointedSri K.S.Kamalakannan (holding DIN 01601589) as the Chairman and Managing Director andSmt. Mageswari Kannan (holding DIN 02107556) as the Joint Managing Director of the Companyas recommended by the Nomination & Remuneration Committee subject to the approval ofShareholders for a period of 3 years w.e.f. 01.08.2014 at the remuneration, in accordance withnorms laid down in Schedule V Part II Section II and other applicable provisions of the CompaniesAct, 2013 given below:

(a)Medical benefit for Subject to ceiling of one month salary in a year of service.Reimbursement of Medicalexpenses actually incurredfor self and family :

(b)Leave and Leave Travel Leave as per Rules of the Company including encashment ofConcession leave. Travel concession for self and family once in a year

incurred in accordance with the rules of the Company.

(c)Club Fees Club Fees subject to a maximum of two clubs. This will notinclude Admission Fees and Life Membership Fees.

(d)Car To provide a car for use in Company’s business. The sameshall not be considered as a perquisite.

(e)Telephone and Mobile Phone To provide a Telephone at residence for Company’s Use. Thesame shall not be considered as a perquisite. To provide Mobilephones exclusively for the purpose of business.

(f) Entertainment Expenses Entitled for reimbursement of Entertainment expenses properlyincurred for the business of the Company.

ParticularsSri. K.S. Kamalakannan

Chairman andManaging Director

Smt. Mageswari KannanJoint Managing Director

Sri. Sounder KannanWhole-Time Director

SalaryRs. 5,00,000/-

(Rupees Five Lakhsper Month)

Rs. 3,25,000/-(Rupees Three Lakhs and

Twenty Five Thousandper Month)

Rs. 3,00,000/-(Rupees Three Lakhs

per Month)

Commission At the rate of 1% on the Net Profits of the Company computed in the manner laiddown in the Companies Act, 2013 for the each of the above persons.

Perquisites(for each of theabove persons)

a) Contribution to Provident Fund, Superannuation Fund or Annuity Fund to theextent these either singly or put together are not taxable under the Income TaxAct, 1961;

b) Gratuity payable at a rate not exceeding half a month’s salary for eachcompleted year of service, and

The remuneration and perquisites shall be subject to the overall ceiling under Section 196

and 197 of the Act.

In the event of absence or inadequacy of profit in any financial year during the tenure of

the above Directors, salary and perquisites would be paid as above and prorata eligible

commission if any, subject to the doubled ceiling limit specified under Paragraph of Section

II of Part II of Schedule V of the Companies Act, 2013 as modified from time to time.

The Board recommends this resolutions set out in Item No. 5,6 & 7 for approval of the

members.

Sri. K.S.Kamalakannan, Smt. Mageswari Kannan and Sri. Sounder Kannan are interested in

the said resolutions. None of the other Directors and Key Managerial Personnel of the Company

and their relatives is concerned or interested.

Item No.8

Pursuant to section 180 of the Act, borrowings (Apart from temporary loans obtained from

the Company’s bankers in the ordinary course of business) in excess of aggregate of paid up

capital and free reserves not set apart for any specific purposes, require the consent of members

in a general meeting by way of special resolution.

The Members at the extraordinary General Meeting of the Company held on 12th September,

2012 had authorised the Board of Directors of the Company to borrow monies from banks, financial

institutions or bodies corporate upto Rs. 200 crores.

Keeping in view the growth plans and expansions of the production capacity of the divisions

of the Company, it is proposed to increase the said borrowing limit to Rs. 400 crores.

The Board recommends the Special Resolutions set out in this notice for approval by themembers.

None of the Directors and Key Management Personnel of the Company and their relatives

is, in any way, concerned or interested, financial or otherwise, in this Resolution.

Item No. 9, 10, 11, 12 & 13

At the 20th Annul General Meeting held on 25th July 2011, the Shareholders had approved

the appointment of Sri. D.Vijay Anand, Vice-President, Minerals Division (now Foods Division),

Smt. Monaa Kannan, Manager – Human Resources (now CEO of the Retail Division), Ms. M. Jayalalitha,

Business Head (now CEO) of the Detergents Division, Sri. M.Sukumar, Commercial Manager, MineralsDivision of the Company with effect from 01.06.2011

And also at the 21st Annul General Meeting held on 2nd August 2012, the Shareholders had

approved the appointment of Smt. Lakshmi Vijay Anand, Business Head – Minerals Division of theCompany with effect from 01.10.2011 and presently she has been working as a CEO at Foods

Division.

During the last financial year, there is a significant improvement in production. This

improvement is due to the hard work and extra efforts put by the managerial personnel in their

individual capacity. The Remuneration Committee has considered their efficiency and decided to

revise their remuneration as follows.


NAGA LIMITED

All the aforesaid perquisites and other payments are to be restricted to total yearly

remuneration prescribed above.

The Board recommends this resolutions set out in Item Nos.9,10,11,12 & 13 for approval of

the members.

Sri. K.S.Kamalakannan, Smt. Mageswari Kannan and Sri. Sounder Kannan are interested in

the said resolutions. None of the other Directors and Key Managerial Personnel of the Company

and their relatives is concerned or interested.


NAGA LIMITED

Other payments (for each of the above persons) :

(a)Medical benefit for Subject to ceiling of one month salary in a year of service.Reimbursement of Medicalexpenses actually incurredfor self and family :

(b)Leave and Leave Travel Leave as per Rules of the Company including encashment ofConcession leave. Travel concession for self and family once in a year

incurred in accordance with the rules of the Company.

(c)Club Fees Club Fees subject to a maximum of two clubs. This will notinclude Admission Fees and Life Membership Fees.

(d)Car To provide a car for use in Company’s business. The sameshall not be considered as a perquisite.

(e)Telephone and Mobile Phone To provide a Telephone at residence for Company’s Use. Thesame shall not be considered as a perquisite. To provide Mobilephones exclusively for the purpose of business.

(f) Entertainment Expenses Entitled for reimbursement of Entertainment expenses properlyincurred for the business of the Company.

Particulars Sri.D.VijayAnand

Vice - President

Salary Rs.29.50 LakhsPer Annum

Perquisites(for each ofthe abovepersons)

a) Contribution to Provident Fund, Superannuation Fund or Annuity Fund to theextent these either singly or put together are not taxable under the Income TaxAct, 1961;

b) Gratuity payable at a rate not exceeding half a month’s salary for each completedyear of service, and(c) Encashment of leave at the end of the tenure.

Smt. MonaaKannanC.E.O.

Ms.M.JayalalithaC.E.O.

Sri.M.SukumarCommercial

Manager

Smt. LakshmiVijay Anand

C.E.O.

Rs.18 LakhsPer Annum




Item No. 14

Sri. S. Ramesh is an Independent Director of the Company. He joined the Board of Directorsof the Company on 08.03.2006. Sri. S. Ramesh is a member of the Nomination and RemunerationCommittee, Audit Committee and Share Holders / Investors Grievance Committee of the Company.

Sri. S. Ramesh holds Bachelor’s Degree in Commerce and has more than 30 years experiencein Finance, Marketing and Production of Food, Leather, Detergent Industries and Civil Projects.

In terms of section 149 and any other applicable provisions of the Companies Act, 2013,Sri. S. Ramesh being eligible and offering himself for re-appointment, is proposed to be re-appointedas an Independent Director for second consecutive five years until the conclusion of 28th AGM orupto 30th September 2019 whichever is earlier. In the opinion of the board, Sri. S. Ramesh fulfillsthe conditions specified in the Companies Act, 2013 and rules made thereunder for hisre-appointment as an Independent Director of the Company and is Independent of the Management.Copy of the draft letter for appointment of Sri. S. Ramesh as an Independent Director would beavailable for inspection without any fee by the members at the Registered Office of the Companyduring normal business hours on any working day.

The Board considers that his continued association would be of immense benefit to theCompany and it is desirable to continue to avail services of Sri. S. Ramesh as an IndependentDirector. Accordingly, the Board recommends the resolution in relation to re-appointment ofSri. S. Ramesh as an Independent Director, not liable to retire by rotation, for the approval by theshareholders of the Company.

Except Sri. S. Ramesh, being an appointee, none of the other Directors and Key ManagerialPersonnel of the Company and their relatives is concerned or interested, financial or otherwise, inthe resolution set out at Item No.14. This explanatory statement may also be regarded as a disclosureunder clause 49 of the listing agreement with the stock exchange.

Item No. 15

Sri. L.A. Irudayaraj is an Independent Director of the Company. He joined the Board ofDirectors of the Company in 06.07.2007. Sri. L.A. Irudayaraj is the Chairman of the AuditCommittee and Nomination and Remuneration Committee and a member of the Share Holders /Investors Grievance Committee of the Company.

Sri. L.A. Irudayaraj is a Chartered Accountant and he has more than 42 years of experienceas a executive in various established companies like SPIC, TISCO, Jamshedpur, etc.,

In terms of section 149 and any other applicable provisions of the Companies Act, 2013,Sri. L.A. Irudayaraj being eligible and offering himself for re-appointment, is proposed to be re-appointed as an Independent Director for second consecutive five years until the conclusion of28th AGM or upto 30th September 2019 whichever is earlier. In the opinion of the board, Sri. L.A.Irudayaraj fulfills the conditions specified in the Companies Act, 2013 and rules made thereunderfor his re-appointment as an Independent Director of the Company and is Independent of theManagement. Copy of the draft letter for appointment of Sri. L.A. Irudayaraj as an IndependentDirector would be available for inspection without any fee by the members at the Registered Officeof the Company during normal business hours on any working day.

The Board considers that his continued association would be of immense benefit to theCompany and it is desirable to continue to avail services of Sri. L.A. Irudayaraj as an IndependentDirector. Accordingly, the Board recommends the resolution in relation to re-appointment of


NAGA LIMITED

Sri. L.A. Irudayaraj as an Independent Director, not liable to retire by rotation, for the approval bythe shareholders of the Company.

Except Sri. L.A. Irudayaraj, being an appointee, none of the other Directors and Key

Managerial Personnel of the Company and their relatives is concerned or interested, financial or

otherwise, in the resolution set out at Item No.15. This explanatory statement may also be regarded

as a disclosure under clause 49 of the listing agreement with the stock exchange.

Item No. 16

The members of the Company at their 9th Annual General Meeting of the Company held onSeptember 29, 2000 had approved by way of an Ordinary Resolution under Section 293 (1)(a) of the

Companies Act, 1956 for creation of mortgages/charge/hypothecation on all present and future

properties of the Company in favour of lenders.

Under Section 180 of the Act, the above powers of the Board are required to be exercised

only with the consent of the company by a Special Resolution. The Ministry of Corporate Affairs

(“MCA”) has vide its General Circular No 4/2014 dated March 25, 2014 clarified that the Ordinary

Resolution passed under Sections 293(1)(a) of the Companies Act, 1956 would be sufficient

compliance of Section 180 of the Act until September 11, 2014. The approval of the Members for

the said creation of a mortgage or charge for the said borrowing is therefore now being sought, byway of a Special Resolutions, pursuant to Section 180(1)(a) of the Act.

The Directors recommend the Resolution at Item No.16 of the accompanying Notice for the

approval of the Members of the Company.

None of the Directors and Key Managerial Personnel of the Company or their respective

relatives is concerned or interested in the passing of the Resolution at Item No.16.

GENERAL INFORMATION

1) Nature of Industry : Manufacturing of Wheat products,Detergents, Minerals and Generationof Wind Power

2) Date of Incorporation/ Commencementof Commercial Production : 01.03.1991

3) In case of new companies, expected date : N.Aof commencement of activities as per projectapproved by financial institutions approvingin the prospectus

4) Financial performance based on given : Gross Profit : Rs. 1368 lakhsindicators : Net Profit Rs. 1013 lakhs

: Current Ratio : 1.01

5) Export performance andNet foreign exchange collaborations : Nil

6) Foreign Investments or collaborations, if any : Nil


NAGA LIMITED


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DIRECTORS’ REPORT

TO MEMBERS

Your Directors have pleasure in presenting the Twenty Third Annual Report together with theAudited Statements of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

Financial Results of the Company for the year under review alongwith the figures for previousyear are as follows :- (Rupees in Crores)

ParticularsCurrent year Previous year31.03.2014 31.03.2013

Sales 423.30 368.64

Other Income 1.37 1.63

Total Income 424.67 370.27

Total Expenditure 371.81 322.97

Financial Cost 22.74 15.34

Profit before Depreciation and Tax 30.12 31.96

Depreciation & Amortisation 16.44 13.78

Taxation 3.55 4.14

Net Profit 10.13 14.04

Balance brought forward 35.34 20.77

Amount available for appropriation 45.47 36.55

Appropriations:

a) Proposed Dividend 0.85 0.85

b) Tax on Dividend 0.14 0.15

c) Transfer to General Reserve 0.21 0.21

d) Balance carried to Balance Sheet 44.27 35.34

OPERATIONS

Your company’s turnover & other income during the year under review is Rs. 424.67 Crores as

against Rs.370.27 Crores for the corresponding previous year. There has been an increase of

Rs.54.40 Crores amounting to a rise of 14.69 % compared to the previous year.

Your Directors are to report that your Company has earned a net profit after tax of Rs.10.13

Crores, as against a sum of Rs.14.04 Crores during the previous year. There was no

commensurate increase in net profit compared to increase in sales turnover due to the higher

raw material input cost, increase in indirect expenses and higher depreciation.

Despite the unfavourable economic conditions and the continuous weak global scenario , your

company has clocked a higher turnover and has increased the retail reach of the products to

the consumer. Having our foot in the essential commodities, your company will perform well

in the forthcoming years with sustained increase in retail market share and with more emphasis

on the quality products from Naga family.


NAGA LIMITED

SOLAR

Your Company has installed Solar Power Panel with 600 kw capacity during the year underreview at the cost of Rs. 6 crores at the Detergents Division, Vedasandur.

DIVIDEND

Your Directors have pleasure in recommending a dividend of 6% on the equity shares of theCompany for the year under review.

TRANSFER TO RESERVE

We propose to transfer Rs. 21 lacs to the general reserve. An amount of Rs.187.18 lacs isproposed to be retained in the Statement of General Reserve for the year under review.

PUBLIC DEPOSITS

The Company does not have any public deposits as on 31st March, 2014.

REPORT ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In terms of the Sexual Harassment of Women at work place (Prevention, Prohibition and Redressal)Act, 2013 which came into force with effect from 23.04.2013, your Directors report that an internalcomplaints committee at the mill levels had been constituted to look into the cases of possiblesexual harassment of women at the work places and take remedial steps for prohibition of suchsexual harassment and redressal of the grievance of women workers, if any, and that the presidingofficer is a woman employed among the women employees.

The cases of women sexual harassment during the year Nil.

The cases of women sexual harassment pending during the year Nil.

DIRECTORS:

The Board consists of executive and non-executive directors including independent directors whohave wide and varied experience in different disciplines of corporate functioning.

Sri. Sounder Kannan, Whole - Time Director, retires by rotation and being eligible, offered himselffor reappointment at the ensuing Annual General Meeting.

Pursuant to the provisions section 149 and 152 of Companies Act 2013, the other directorsreappointed are Sri.L.A.Irudayaraj and Sri. S. Ramesh as Independent Directors of the Company.

A brief resume, expertise, shareholding in the Company and details of other directorships of thesedirectors as stipulated under clause 49 of the listing agreement with the stock exchange formspart of the notice of ensuing Annual General Meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT:

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors declare:

(i) that in the preparation of the annual accounts, the applicable accounting standards havebeen followed and there are no material departures from the same.

(ii) that they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profit or lossof the Company for that period;


NAGA LIMITED

(iii) that they have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956, for safe guarding theassets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that they have prepared the annual accounts on a ‘going concern’ basis.

CORPORATE GOVERNANCE

The Company has complied with the requirement regarding Corporate Governance as requiredunder Clause 49 of the Listing agreement with the Stock Exchange where the Company’s sharesare listed. A report on the Corporate Governance in this regard is made a part of this AnnualReport and a Certificate from the Auditors of the Company regarding compliance of the conditionsof the Corporate Governance is attached to this report.

MANAGEMENT DISCUSSION & ANALYSIS

A Management Discussion & Analysis as required under the Clause 49 of the Listing Agreement isannexed and forming part of the Directors’ Report.

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

Particulars pertaining to these matters as required under Section 217(1) (e) of the CompaniesAct, 1956 are enclosed in the Annexure to this Report.

PARTICULARS OF THE EMPLOYEES UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

During the year under review, there are no employees who are drawing a remuneration ofRs.60,00,000 or more per annum or Rs.5,00,000/- or more per month.

AUDITORS:

The Company’s Auditors M/s D.Sampathkumar & Co., Chartered Accountants, Chennai areretiring at the conclusion of the ensuing Annual General Meeting and are eligible forreappointment.

COST AUDIT :

Cost Audit has become applicable in respect of products manufactured by your Company witheffect from financial year 2012-2013. Accordingly, cost audit prepared by Dr. I. Ashok, CostAccountant, Thirumangalam having Registration No. M/11929 has been submitted for theyear 2012-2013.

The Cost Auditor has reported that proper cost records, as per the companies (Cost AccountingRecords) Rules, 2011 prescribed under clause (d) of sub section (1) of section 209 of theCompanies Act, 1956, have been maintained by the Company so as to give true and fair viewof the cost of production, cost of sales and margin of the product groups under reference. Inthe opinion of the Cost Auditor, the said books and records give information required by theCompanies Act, 1956, in the manner so required and the same are in conformity with the CostAccounting Standards issued by the Institute of Cost Accountants of India, to the extentthese are found to be relevant and applicable. Cost Audit for the year 2013-2014 is in progress.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013 all companies having networth of Rs. 500 crores or more orturnover of Rs. 1000 crores or more or a net profit of Rs. 5 crores or more during any financialyear will be required to constitute a Corporate Social Responsibility (CSR) Committe of theBoard of Directors comprising three or more directors, atleast one of whom will be anindependent director.


NAGA LIMITED

Aligning with the guidelines, we have constituted a Committee comprising Dr. K. Venkatachalam

(Chairperson), Smt. Mageswari Kannan and Sri. Sounder Kannan. The committee is responsible

for formulating and monitoring the CSR policy of the Company.

ACKNOWLEDGEMENTS

The Management continues to maintain cordial relationship with all the employees and wish

to place on record the Board’s appreciation of sincere work put in by them.

The Directors wish to place on record their gratitude to the Central & State Governments,

TIIC Limited, Axis Bank Ltd, State Bank of India, Karur Vysya Bank, Standard Chartered Bank,

Suppliers, Customers and the Shareholders for their continued co-operation and support.

Place : Chennai FOR AND ON BEHALF OF THE

Date : 12.05.2014 BOARD OF DIRECTORS

K.S.KAMALAKANNANChairman & Managing Director.

ANNEXURE TO THE DIRECTORS’ REPORT

DISCLOSURE OF THE PARTICULARS AS REQUIRED BY THE COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES 1998.

FORM A

A. Conservation of Energy : Reduction of power consumption is an ongoing exercise.

B. Technology Absorption : In all the divisions latest technology is being absorbed.

C. Foreign Exchange Earnings : Rs. Nil

D. Foreign Exchange Outgo : Rs. 612.90 lacs

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management is keen to improve its rating from “BBB - ” to “BBB ” and later to “BBB +”.In the last four years our rating has been consistent at “BBB- ” and therefore in the currentyear sufficient effort is to be carried out to move to the next higher rating.

Indian ratings has got two main criteria, one for earnings and the other for debt.

Company is working on both fronts and is confident of achieving a higher credit rating thisfinancial year.


NAGA LIMITED

Particulars Positive Trigger % Negative Trigger % Naga Limited %

EBIDTA / TO > 11 < 11 12.45

GROSS DEBT / EBIDTA < 3.5 > 4.5 3.19

SEGMENT WISE AND PRODUCT WISE PERFORMANCE

The necessary information has been furnished under Note No. 37 of Financial Statementsforming part of the Annual Report.

OUTLOOK

The outlook is viewed with optimism, in as much as the economic scenario is poised to improve.

RISK AND CONCERNS

Fluctuation in the raw material prices will directly affect the cost of production.

INTERNAL CONTROL SYSTEMS

The Company has an Audit Committee which looks into the aspects of internal control systemsand ensures that all is well with the systems in vogue.

FINANCIAL AND OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of theCompanies Act, 1956 and applicable Accounting Standards issued by the Institute of CharteredAccountants of India. The management accepts the integrity and objectivity of these financialstatements as well as the various estimates and judgements as used therein. The estimatesand judgements relating to the financial statements have been made on a prudent and reasonablebasis, in order that the financial statements reflect in true and fair manner, the form oftransactions and reasonably present the Company’s state of affairs and profit for the year.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The industrial relations, by and large, were cordial and the management believes that themain strength of its organization is its people.

CAUTIONARY STATEMENT

Certain statements made in the Management Discussion and Analysis Report relating to theCompany’s objectives, projections, outlook, expectations, estimates, etc., may constituteforward looking statements within the meaning of applicable laws and regulations. Actualresults may differ from such expectations, projections, etc., whether expressed or implied.Several factors could make significant difference to the company’s operations. These includeclimatic conditions and economic conditions affecting demand and supply, governmentregulations and taxation, natural calamities, etc., over which the Company does not have anydirect control.

REPORT ON CORPORATE GOVERNANCE

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE :

Corporate Governance is associated with the systems and process with a view to enhancingthe long term shareholders value in a transparent and equitable manner. This process transcendsmere disclosures and statutory compliance and aims at developing and strengthening therelationship with the investors and public at large. The salient features of good CorporateGovernance are transparency, accountability, fairness and social responsibility.


NAGA LIMITED

Moving forward from last year, your company continues to develop its process and proceduresand also has made Corporate Governance as a practice. Your Company also believes that thevery foundation of Corporate Governance is disclosure, as openness is the basis of publicconfidence in the corporate system.

2. a) Composition of the Board of Directors :

The present strength of the Board of Directors is 6 who are categorized under the followingheads:

1. Promoter, Executive Director (PED) ………. 3 Nos

2. Independent, Non- Executive Director (INED) ………. 3 Nos

Composition of the present Board of Directors and also the Directorship on other Companiesor Board Committees of which he / she is a member/Chairperson are as under:

Name of Director Category No. of other No. of membership No. of BoardDirectorship of other Committees for

Board Committees which Chairperson

Sri. K.S.Kamalakannan PED 3 1 NIL

Smt. Mageswarikannan PED 4 3 NIL

Sri. Sounderkannan PED 1 1 NIL

Sri. L.A.Irudayaraj INED NIL 3 3

Sri. S. Ramesh INED NIL 3 NIL

Dr. K. Venkatachalam INED 2 2 1

b) No. of Board Meetings held:

During the financial year ended 31st March, 2014, TEN Board meetings were held on 15.05.2013,04.06.2013, 03.08.2013, 23.08.2013, 25.09.2013, 25.10.2013, 26.11.2013, 06.12.2013,10.02.2014 and 27.03.2014.

c) The attendance of each Director at Board meetings and the Twenty Second Annual GeneralMeeting (AGM) is as under:

Name of Director No. of Board Attendance at last AGM RemarksMeetings attended held on 03.08.2013

Sri. K.S. Kamalakannan 10 Yes NIL

Smt. Mageswari Kannan 10 Yes NIL

Sri. Sounder Kannan 9 Yes NIL

Sri. L.A. Irudayaraj 4 Yes NIL

Sri. S. Ramesh 10 Yes NIL

Dr. K. Venkatachalam 4 Yes NIL


NAGA LIMITED

d) Code of Conduct :

The Members of the Board and the Senior Management shall:

1) Always act in the best interest of the Company and its stakeholders;

2) Adopt the highest standards of professional ethics, integrity, confidentiality and disciplinein dealing with all matters relating to the Company;

3) Always adhere and conform to the various statutory and mandatory regulations/guidelinesapplicable to the operations of the Company avoiding violation;

4) Not to derive personal benefit or undue advantages, financial or otherwise, by virtue oftheir position or relationship with the Company;

5) Inform the Company immediately if there is any personal development which could beincompatible with the level and stature of his/her position and responsibility with theCompany; and

6) Always abide by the above Code of Conduct and shall be accountable to the Board fortheir action, violations, defaults etc.,

e) Audit Committee :

The powers, role and terms of reference of the Audit Committee covers the areas ascontemplated under clause 49 of the listing agreement and section 292 A of the Companies Act1956 besides other terms as may be referred by the Board of Directors. The powers includeinvestigating any activity within terms of reference; seeking information from any employee;obtaining outside legal and other professional advice ; and securing attendance of outsiderswith relevant expertise, if considered necessary. The role includes oversight of company’sfinancial reporting process and disclosure of financial information to ensure that the financialstatement is correct, sufficient and credible; recommending the appointment, reappointment,if required, replacement or removal of statutory and cost auditors; fixation of audit fees andapproval of payment for any other services; discussing with internal auditors any significantfinding and followup thereon; reviewing with the management annual and quarterly financialstatements before submission to the Board for approval, adequacy of internal control systemsand performance of statutory and internal auditor; and reviewing the company’s financial riskand management policies.

The committee has been reconstituted on 12th May, 2014 and presently the Committee comprises

of Sri.L.A.Irudayaraj, Non-Executive and Independent Director and is the Chariman of theAudit Committee, Sri.S.Ramesh, Non-Executive and Independent Director and Smt.MageswariKannan, Joint Managing Director / Promoter and Executive Director. All members of the AuditCommittee are financially literate, and Sri. L.A. Irudayaraj, Sri. S. Ramesh and Smt. MageswariKannan, have financial management expertise by virtue of their comparable experience andbackground and Sri. V. Marikannan, Company Secretary, acts as the Secretary to the Committee.The heads of finance and Accounts are permanent invitees to the meetings of the AuditCommittee. The head of internal audit, the concerned authorised representatives of thestatutory auditors are also invited to the meetings of the Audit Committee.

The Audit Committee has recommended to the Board, the reappointment of M/s. D.Sampathkumar & Co., Chartered Accountants as the statutory auditors of the Company andthe necessary resolutions for their reappointment are placed before the shareholders at the23

rd Annual General Meeting.


NAGA LIMITED

During the last financial year, the Audit Committee met 4 times on 15.05.2013, 03.08.2013,25.10.2013 and 10.02.2014. The Committee at these meetings reviewed the financial reportingsystem and un-audited financial results for the relevant periods. The committee also assessedthe internal control system and to this end examined the observations and suggestions of theinternal auditors with regard to operations of the Company and found them to be in order.

Sri.L.A. Irudayaraj, Chairman of the Audit Committee was present at the 22nd

AGM held on03.08.2013.

f) SHAREHOLDERS’ COMMITTEE :

i) SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE :

The Shareholders’ / Investors Grievance Committee oversees redressal of shareholder andinvestor grievances relating to transfer / transmission of shares, issue of duplicate shares,recording dematerialisation / rematerialisation of shares and related matters.

Sri.L.A.Irudayaraj, a non executive and independent director, is the chairman of the shareholder/ investor grievance committee and Sri. S. Ramesh a non executive and independent director.Sri. V. Marikannan, Company Secretary acts as the compliance officer to the committee.

However there was no complaint from any share holder during financial year 2013 - 2014.

ii) SHARE TRANSFER COMMITTEE

Share Transfer Committee consists of the members of Sri.K.S.Kamalakannan, Chairman &Managing Director and Smt.Mageswari Kannan, Joint Managing Director. The Committee dealswith all matters connected with share transfers, transmission, issue of duplicate sharecertificates, transposition, demat / remat etc.,

iii) COMPLIANCE OFFICER

In term of clause 47 of the listing agreement, Sri. V. Marikannan is the Company Secretaryand the compliance officer during the period under review for the purpose of complying withthe various provisions of SEBI, Stock exchange etc., and can be contacted at M/s. Naga Limited,No.1 , Anna Pi l la i St reet , Chennai - 600 001, Te l : 044 -25363535, e -mai l id :marikannanv@nagamills. com.

g) NOMINATION AND REMUNERATION COMMITTEE :

The Board of Directors in its meeting held on 12th May 2014, reconstituted the Remuneration/ Selection Committee and name has been changed as the Nomination and RemunerationCommittee. Sri. L. A. Irudayaraj, non executive independent director is the Chairman of theCommittee and Sri S.Ramesh, Dr. K. Venkatachalam, non executive independent directors arethe members of the Nomination and Remuneration Committee. Sri. K.S. Kamalakannan,Chairman & Managing Director and Smt.Mageswari Kannan, Joint Managing Director andSri . Sounder Kannan, Whole-Time Director are permanent invitees to the committee meetings.Sri. V. Marikannan, Company Secretary is the secretary of the committee.

The terms of reference of the Committee, inter alia, includes (a) formulation of policy fordetermining qualifications, positive attributes and independence of a director andremuneration for the directors, Key Managerial Personnel and other employees andrecommending the same to the Board and (b)identification of persons who are qualified tobecome directors and who may be appointed in senior management in accordance with the


NAGA LIMITED

criteria as per the policy approved by the board. The policy of the company is to remaincompetitive in the industry to attract and retain the best talent and appropriately rewardemployees for their individual performance and contribution to the business.

During the year under review, matters of remuneration of executive directors, Key and SeniorManagerial Personnel and relatives of interested directors were considered by the Board ofDirectors of the Company, with the interested executive directors, not participating or voting.Further, the terms of remuneration of executive directors, Key & Senior Managerial Personneland revision of remuneration of relatives of the interested directors are approved by theshareholders at the Annual General Metting.

The Company does not have any Employee Stock Option Scheme.

a) DIRECTORS REMUNERATION :

The details of remuneration paid to the Executive Directors during the financial year 2013-

2014 are furnished hereunder, in addition to Notes on Accounts.

Particulars Sri. K.S.Kamala Smt.Mageswari Sri.SounderKannan Kannan Kannan(C.M.D) (J.M.D) (W.T.D)

A. Fixed Component :

1. Salary Rs.42,00,000/- Rs.39,00,000/- Rs.36,00,000/-

2. Contribution to Provident Fund Rs. 9,360/- Rs. 9,360/- Rs. 9,360/-

3. Commission Rs.10,13,000 /- Rs.10,13,000 /- Rs.10,13,000 /-

B. Variable Component NIL NIL NIL

C. Stock Options NIL NIL NIL

D. No.of Shares Held as on 31.03.2014 60,70,570 18,55,220 8,17,855

b) None of the non-executive directors of your company has any pecuniary relationship or

transactions with the company. They are paid only sitting fees. Non executive directors,

except Sri. L.A. Irudayaraj who is holding 400 equity shares of Rs. 10/- each of the company,

hold no equity shares and convertible instruments of the company.

As required, a brief profile and other particulars of the Directors seeking re-appointment are

given in the Notice of the 23rd Annual General Meeting and forms part of the Corporate

Governance report.

h) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

The Board of directors in its meeting held on 12th May 2014 constituted a Corporate Social

Responsibility Committee. Dr.K.Venkatachalam, Independent Director is the Chairman of the

Committee, Smt. Mageswarikannan, Joint Managing Director and Sri. Sounderkannan,

Wholetime Director are members of the Committee. Sri.V.Marikannan, Company Secretary is

the Secretary of the Committee.


NAGA LIMITED

3) ANNUAL GENERAL MEETINGS :

Year Date Time Venue

2010-2011 25.07.2011 10.15 A.M Presidency Club,

2011-2012 02.08.2012 10.30 A.M No.51, Ethiraj Salai,

2012-2013 03.08.2013 10.45 A.M Egmore, Chennai-8

4) DISCLOSURE :

1. None of the transactions with related parties, were in conflict with interest of the

Company. Attention of members is drawn to the disclosure of transactions with related parties

in Note No.34 of Notes of Financial Statements forming part of the Annual Report.

2. There were no instances of non-compliance by the company on any matter related to

the capital markets during the last three years and hence no penalties and strictures have

been imposed on the Company by Stock Exchange or SEBI or any statutory authorities.

3. The Company has a Whistle Blower Policy wherein the employees enjoy access by

reporting to the Audit Committee.

4. All the mandatory requirement has been complied by the Company and also adopted

some of the non-mandatory requirements of Clause 49.

5. The statutory Financial Statements of the Company are unqualified.

5. MEANS OF COMMUNICATION :

Financial results of the Company are published in “Business Line” and in “Malai Sudar”

(Vernacular) in Chennai.

6. GENERAL SHARHOLDERS INFORMATION :

1. Annual General Meeting : 1st

August, 2014Date Time and Venue : 12.15 P.M. at the Presidency Club,

51, Ethiraj Salai, Egmore,Chennai-08.

2. Book Closure dates : 29th July, 2014 to 1

st August, 2014

(both days inclusive)

3. Listing of Equity Shares on : Madras Stock Exchange Limited, Chennai.Stock Exchanges Listing Fees have been paid up to date.

4. Share Transfer System : Share Transfer requests areprocessed and the share certificates arereturned within a period of 15days

5. Distribution of Shareholding : Promoters - 74.69 %as on 31.03.2014 Others - 25.31 %


NAGA LIMITED

6. Dematerialisation of Shares : 98.82 % equity shares of the Company havebeen dematerialised as on 31

st March, 2014.

7. Units Location : 1. No.1, Trichy Road, Dindigul-624 005

2. No.133, Trichy Road, Dindigul-624 005

3. No.1, Modern Nagar, Karur Road,Dindigul-624 005.

4. No.9, Trichy Road, Dindigul-624 005

5. No.1, Oddanchatram Road,Vedasandur- 624 710

8. Address for Investor : Naga Limited, No.1, Anna Pillai Street,Correspondence Chennai- 600 001. Telefax 044-25363535

9. Connectivity with NSDL : ISIN No. INE327M01014

10. Address of Registrar & : Cameo Corporate Services,Transfer Agent Subramanian Buildings,

Club House Road,

Anna Salai, Chennai 600 002.

Place : Chennai FOR AND ON BEHALF OF THE

Date : 12.05.2014 BOARD OF DIRECTORS

K.S. KAMALAKANNAN

Chairman & Managing Director


NAGA LIMITED

CERTIFICATE BY C E O & C F OWe, K.S.Kamalakannan, Chairman & Managing Director (CEO) and Mageswari Kannan, Joint ManagingDirector (CFO) of M/s NAGA LIMITED certify that:

a) We have reviewed the Financial Statements and the Cash Flow Statements for the year ended31.03.2014 and that to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading.

(ii) These statements give a true and fair view of the state of affairs of the Company andof the results of operations and cash flows. The financial statements have been preparedin conformity, in all material respect, with the existing generally accepted accountingprinciples including Accounting Standards, applicable laws and regulations.

(b) There are to the best of our knowledge and belief, no transactions entered into by theCompany during the year which are fraudulent, illegal or violative of the Company’scode of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financialreporting and that we have evaluated the effectiveness of internal control systems of theCompany pertaining to financial reporting and we have disclosed to Auditors and AuditCommittee, deficiencies in the design, or operation of such internal controls if any, of whichwe are aware and this steps we have taken or proposed to take to rectify these deficiencies.

(d) We have disclosed, based on our evaluation wherever applicable to the Auditors and AuditCommittee that ;

1. There were no material deficiencies in internal control over financial reporting during theyear.

2. All the significant changes in Accounting Policies during the year, if any, have been disclosedin the notes to the financial statements; and

3. There were no instances of significant fraud of which we are aware and the involvementthere in, of the management or an employee having the significant role in the Companiesinternal control system over financial reporting.

PLACE : CHENNAI K.S. KAMALAKANNAN MAGESWARI KANNANDATE : 12.05.2014 C.E.O. (C.M.D) C.F.O. (J.M.D)

8. DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIORMANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct to be followed by all themembers of the Board and Senior Management Personnel of the company respectively incompliance with the revised Clause 49 of the Listing Agreement with stock exchange wherethe shares of the Company are listed.

As provided under Clause 49 of the Listing Agreement all Board Members and SeniorManagement Personnel have affirmed the compliance with the Code of Conduct for the yearended 31st March, 2014.

PLACE : CHENNAI K.S. KAMALAKANNANDATE : 12.05.2014 C.E.O. (C.M.D)


NAGA LIMITED


NAGA LIMITED

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of M/s. Naga Limited

We have examined the compliance of conditions of Corporate Governance by Naga Limited,

for the year ended 31st March, 2014 as stipulated in Clause 49 of the Listing Agreement of the

said Company with Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management.

Our examination has been limited to a review of the procedures and implementation thereof,

adopted by the Company for ensuring compliance with the conditions of the compliance of

Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression

of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to

us and the representations made by the Directors and the Management, we certify that the

Company has complied with the conditions of Corporate Governance as stipulated in clause 49

of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the

Company nor of the efficiency or effectiveness with which the management has conducted the

affairs of the Company.

Place : Chennai For D.Sampath Kumar & Co

Date : May 12, 2014 Chartered Accountants

(Firm Registration No.003556S)

M K Ravindran

(Partner)

M.N. 020887

D.Sampathkumar & Co., 5, South Boag Road,

Chartered Accountants T.Nagar, Chennai 600 017.

Ph: 044-24341189

INDEPENDENT AUDITORS’ REPORT

To

The Members of Naga Limited

Report on the Financial Statements

We have audited the accompanying financial statements of M/s. Naga Limited, (“the

Company”), which comprises the Balance Sheet as at March 31, 2014, the Statement of Profit

and Loss and Cash Flow Statement for the year then ended, and a summary of significant

accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Management is responsible for the preparation of these financial statements

that give a true and fair view of the financial position, financial performance and cash flows

of the Company in accordance with the Accounting Standards notified under the Companies

Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the

Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and in

accordance with the accounting principles generally accepted in India. This responsibility

includes the design, implementation and maintenance of internal control relevant to the

preparation and presentation of the financial statements that give a true and fair view and

are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Standards on Auditing issued by the Institute

of Chartered Accountants of India. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Company’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting estimates made by management, as

well as evaluating the overall presentation of the financial statements.


NAGA LIMITED

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to

us, the aforesaid financial statements give the information required by the Act in the manner

so required and give a true and fair view in conformity with the accounting principles generally

accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date;

and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by

the Central Government of India in terms of sub-section (4A) of section 227 of the

Act, we give in the Annexure a statement on the matters specified in paragraphs 4

and 5 of the Order.

2. As required by section 227(3) of the Act, we report that;

(a) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books;

(c) The Balance Sheet, statement of profit and loss, and cash flow statements dealt

with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow

Statements comply with the Accounting Standards notified under the Act read with

the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate

Affairs in respect of section 133 of the Companies Act, 2013.

(e) On the basis of written representations received from the directors as on March

31, 2014, and taken on record by the Board of Directors, none of the directors is

disqualified as on March 31, 2014, from being appointed as a director in terms of

clause (g) of subsection (1) of section 274 of the Act.

Place : Chennai For D.Sampathkumar & CoDate : May 12, 2014 Chartered Accountants

(Firm Registration No.003556S)

M K Ravindran(Partner)

M.No. 020887


NAGA LIMITED

Annexure to Independent Auditors’ Report

(Referred to in paragraph 1 under the heading of “Report on Other Legal and RegulatoryRequirements” of our report of even date to the members of M/s. Naga Limited., on theFinancial Statement for the year ended March 31, 2014)

i) In respect of Fixed Assets:

a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by themanagement in a phased periodical manner, which in our opinion is reasonable, having regardto the size of the company and the nature of its assets. No material discrepancies were noticedon such physical verification.

c) In our opinion, the company has not disposed off a substantial part of its fixed assetsduring the year and the going concern status of the company is not affected

ii) In respect of its Inventories:

a) The inventories has been physically verified during the year by the management. Inour opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.

c) The company has maintained proper records of inventories. As explained to us, therewere no material discrepancies noticed on physical verification of inventories as compared tobook records.

iii) In respect of loans, secured or unsecured, granted or taken by the company to/fromcompanies, firms, or other parties covered in the register maintained under Section 301 ofthe Companies Act, 1956 :

a) The company has not granted any loans, secured or unsecured to Companies, firmsor other parties covered in the register maintained under section 301 of the Companies Act,1956. Consequently, the requirements of Clauses (iii) (a), (iii) (b) and (iii) (c) of paragraph 4of the Order are not applicable.

b) 1) The Company has taken unsecured loans from five of the parties covered in theregister maintained under section 301 of the Companies Act, 1956. The maximum amountinvolved during the year was Rs.1,308.66 Lacs. The year end balance of that loan wasRs.1,308.66 Lacs.

2) In our opinion and according to the information and explanations given to us, therate of interest and other terms and conditions of the loans taken by the company are notprima facie prejudicial to the interest of the company.

3) The terms of arrangement do not stipulate any repayment schedule and is repayableon demand. Accordingly, paragraph 4(iii) (c) of the Order is not applicable to the Company inrespect of repayment of principal amount;

4) In respect of the said loans, they are repayable on demand and therefore, thequestion of overdue amount does not arise. In respect of interest, there are no overdueamounts.

iv) In our opinion and according to the information and explanations given to us, there is anadequate internal control systems commensurate with the size of the company and the nature


NAGA LIMITED

of its business, for the purchase of inventory and fixed assets and for the sale of goods andservices. During the course of our audit, we have not observed any continuing failure tocorrect major weaknesses in the internal control system of the Company.

v) In respect of the contracts or arrangements referred to in Section 301 of the CompaniesAct, 1956 :

a) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements, that need to be entered in theRegister maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements entered in the Register maintainedunder Section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 Lacs in respectof each party during the year have been made at prices which appear reasonable as per theinformation available with the company.

vi) According to the information and explanations given to us, the Company has not acceptedany deposit from the public. Therefore, the provisions of Clause (vi) of Paragraph 4 of theOrder are not applicable to the Company.

vii) In our opinion the company has an internal audit system commensurate with its size andthe nature of its business.

viii) We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government underSection 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie theprescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with view to determine whether they are accurate or complete.

ix) In respect of statutory dues :

a) According to the records of the company, undisputed statutory dues including ProvidentFund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, SalesTax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutorydues have been generally regularly deposited with the appropriate authorities. According tothe information and explanations given to us, no undisputed amounts payable in respect ofaforesaid dues were outstanding as at 31st March, 2014 for a period of more than six monthsform the date of becoming payable.

b) According to the information and explanations given to us and the records of thecompany examined by us, except the following, there are no dues of Income tax, wealth tax,service tax, sales tax, customs duty, excise duty and cess which have not been deposited onaccount of any dispute.

Name of the Nature of Amount Involved Period to which Dispute isState Act Dues Rs. in lacs the case relates pending before

Finance Act Service tax 304.00 2006-2010 CESTAT /1994 Commissioner

(Appeals)

Sales Tax Act Sales Tax 39.60 2007-2008 Commissioner2010-2011 (Appeals)


NAGA LIMITED

x) The Company does not have accumulated losses at the end of the financial year. TheCompany has not incurred cash losses during the financial year covered by the audit and in theimmediately preceding financial year.

xi) Based on our audit procedures and according to the information and explanations given tous, we are of the opinion that the Company has not defaulted in repayment of dues to financialinstitutions and banks.

xii) In our opinion and according to the explanations given to us and based on the informationavailable, no loans and advance have been granted by the company on the basis of security byway of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not chit fund or nidhi / mutual benefit fund/society.Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to theCompany.

xiv) In our opinion, the company is not dealing in or trading in shares, securities, debenturesand other investments. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors’Report) Order, 2003 are not applicable to the company.

xv) The company has given guarantee for loan taken by others from banks or financialinstitution. In our opinion, the terms and conditions on which the guarantees given are notprima facie prejudicial to the interest of the Company.

xvi) On the basis of review of utilization of funds on an overall basis, in our opinion, the termloans taken by the Company were applied for the purposes for which the loans were obtained.

xvii) On the basis of review of utilization of funds on an over all basis, in our opinion, thefunds raised on short term basis have not been used for long term investment.

xviii) According to the information and explanations given to us, the Company has not madeany preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Act.

xix)The company has not issued any debentures during the year.

xx) The company has not raised any money by way of public issues during the year.

xxi) In our opinion and according to the information and explanations given to us, no materialfraud on or by the Company has been noticed or reported during the year.

Place : Chennai For D Sampathkumar & Co.,Date : May 12, 2014 Chartered Accountants

(Firm Registration No : 003556S)

M.K. Ravindran(Partner)

M.No: 020887


NAGA LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2014

I. EQUITY AND LIABILITIES

(1) Shareholders’ Fund(a) Share Capital 2 1,424.80 1,424.80(b) Reserves and Surplus 3 4,760.71 3,846.90

(2) Share application money pending allotment -- --

(3) Non-Current Liabilities

(a) Long-Term Borrowings 4 8,662.01 8,641.81(b) Deferred Tax Liabilities (net) 5 596.93 546.93(c) Other Long -Term Liabilities 6 123.95 129.83

(4) Current Liabilities

(a) Short-Term Borrowings 7 6,334.00 6,751.32(b) Trade Payables 8 1,223.38 478.50(c) Other Current Liabilities 9 2,279.95 2,064.00(d) Short-Term Provisions 10 102.36 103.67

Total 25,508.09 23,987.76

II. ASSETS

(1) Non -Current Assets(a) Fixed Assets

(i) Tangible Assets 11 14,250.85 14,048.30 (ii) Intangibles 11 36.65 61.21

(iii) Capital Work in Progress 11 751.20 122.49

(b) Non - Current Investments 12 64.25 64.25(c) Long -Term Loans and Advances 13 311.84 192.36(d) Other Non - Current Assets 14 13.57 15.29

(2) Current Assets(a) Inventories 15 6,293.31 6,869.71(b) Trade Receivables 16 3,023.91 1,837.10(c) Cash and Cash Equivalents 17 473.63 455.01(d) Short-Term Loans and Advances 18 231.77 286.79(e) Other Current Assets 19 57.11 35.25

Total 25,508.09 23,987.76

(Rs. in Lacs)

PARTICULARS NoteNo

As at 31st

March, 2014As at 31st

March, 2013

K.S. KAMALAKANNANChairman & Managing

Director

V. MARIKANNANCompany Secretary

MAGESWARI KANNANJoint Managing Director

As per our report of even dateFor D Sampathkumar & Co.,Chartered Accountants(Firm Registration No : 003556S)

M.K. RAVINDRANPartnerM.No: 020887

Place : ChennaiDate : May 12, 2014

Significant Accounting Policies & Notes on Financial Statements - 1 to 38

For and on behalf of the Board


NAGA LIMITED

INCOME

I Revenue from Operations 20 42,329.85 36,863.88

II Other Income 21 137.17 163.02

III Total Revenue (I + II) 42,467.02 37,026.90

IV EXPENSES

Cost of Materials Consumed 22 29,401.50 24,330.18

Purchases of Stock in-Trade 23 1,607.51 2,673.15

Changes in Inventory of Finished Goods,

Work - in - progress and Stock in Trade 24 86.51 (281.59)

Employee Benefits Expense 25 1,841.30 1,558.30

Finance Costs 26 2,274.37 1,534.34

Depreciation and Amortisation Expense 11 1,644.42 1,378.10

Other Expenses 27 4,243.74 4,016.98

Total Expenses 41,099.35 35,209.46

V PROFIT BEFORE TAX 1,367.67 1,817.44

VI Tax Expenses

1) Current Tax 304.50 363.632) Deferred Tax 50.00 50.00

VII PROFIT FOR THE YEAR 1,013.17 1,403.81

VIII Earnings per Equity Share of Face Value of Rs. 10 each

Basic and Diluted (in Rs.) 7.11 9.85

Significant Accounting Policies & Notes on Financial Statements - 1 to 38


(Rs. in Lacs)

PARTICULARSNoteNo 2013 - 2014 2012 - 2013

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

K.S. KAMALAKANNANChairman & Managing

Director

V. MARIKANNANCompany Secretary

MAGESWARI KANNANJoint Managing Director


M.K. RAVINDRANPartnerM.No: 020887



NAGA LIMITED

NOTE - 1 : SIGNIFICANT ACCOUNTING POLICIES:

a) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention on theaccrual basis of accounting and in accordance with Generally Accepted Accounting Principles

accepted in India and complied with the accounting standards notified by Central Government

of India, under the Companies (Accounting standards) Rules 2006, and relevant provisions of

the Company’s Act, 1956.

b) Uses of Estimates:

The preparation of financial statements requires estimates and assumptions to be

made that affect the reported amount of assets and liabilities on the date of financial

statements and the reported amount of revenues and expenses during the reporting period.

Difference between the actual results and estimates are recognized in the period in which theresults are known/materialized.

c) Revenue Recognition:

i.Income: Revenue is recognised only when it can be reliably measured and it is

reasonable to expect ultimate collection. Revenue from sales is recognised on despatch ofgoods and net of excise duty, service tax, trade discounts where applicable. Power

generated through windmill is valued as per the credits given in the regular power bills by

Tamil Nadu Generation and Distribution Corporation Limited. Other Incomes are recognised

on accrual basis.

ii.Expenditure: Expenses are accounted on accrual basis and provision is made for

all known losses and liabilities.

d) Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction, net of cenvat

credit and ,depreciation. Cost include direct costs and financing cost related to borrowing

attributable to acquisition that are capitalized until the assets are ready for use. Capital-

work-in-progress comprise outstanding advances paid to acquire fixed assets and the costof fixed assets that are not yet ready for their intended use at the reporting date.

Intangible assets recorded in the books are shown less of accumulated amortisation and

impairment.

e) Depreciation and Amortisation :

Depreciation is provided on written down value method in respect of Soaps and

Detergents Division at Vedasandur and under the straight line method in respect of other

divisions at the rates and in the manner prescribed in Schedule XIV to the Companies Act,

1956.

Notes on Financial Statements for the year ended 31st March, 2014


NAGA LIMITED

f) Impairment of Assets:

An impairment of loss is charged to the profit and loss account in the year in whichan asset is identified as impaired. The impairment loss recognised in prior accounting periodis reversed if there has been a change in the estimate of recoverable amount.

g) Foreign Currency Transactions:

i. Transactions denominated in foreign currencies are recorded at theexchange rate prevailing on the date of transaction or that approximates the actual rate atthe date of the transaction.

ii. Monetary items denominated in foreign currency at the year end are restatedat year end rates. In case of items which are covered by forward exchange contracts,the difference between the year end rate and rate on the date of the contract is recognizedas exchange difference and the premium paid on forward contracts is recognized over thelife of the contract.

iii. Non monetary foreign currency items are carried at cost.

iv. Any income or expense on account of exchange difference either on settlement oron translation is recognised in the Profit and Loss account except in case of long termliabilities, where they related to acquisition of fixed assets, in which case they are adjustedto the carrying cost of such assets.

h) Investments:

Current investments are carried at the lower of cost and quoted / fair value, computedcategory wise . Long term investments are stated at cost. Provisions for diminution in thevalue of long term investments is made only if such a decline is other than temporary.

i) Inventories:

Items of inventories are measured at lower of cost and net realizable value afterproviding for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost ofconversion and other costs including manufacturing overheads incurred in bringing them totheir respective present location and condition. Cost of raw materials, process chemicals,stores and spares, packing materials, trading and other products are determined on First InFirst Out basis.

j) Employee Benefits

i. Short term Employee Benefits are recognized as an expense at the undiscountedamount in the Profit and Loss Account of the year in which the related service is rendered.

ii. Post employment and other long term employees benefits are recognised as anexpense in the Profit and Loss Account for the year in which employee has rendered services.The expense is recognised at the present value of the amounts payable determined usingactuarial valuation techniques. Actuarial gains and losses in respect of post employment andother long term benefits are charged to the Profit and Loss Account.



NAGA LIMITED

k) Borrowing Cost:

Borrowing cost that are attributable to the acquisition or construction of qualifyingassets are capitalised as part of the cost of such assets. A qualifying assets is one thatnecessarily takes substantial period of time to get ready for its intended use. All otherborrowing costs are charged to Profit and Loss Account.

l) Government Grants:

i. Government grants are recognised when there is resonable assurance that thecompany will comply with the conditions with attached to them and the grants will be received.

ii. Government grants whose primary condition is that the company should purchase,construct or other wise acquire capital assets are presented by deducting them from thecarrying value of the assets. The grant is recognised as income over the life of the depreciableasset by way of a reduced depreciation charge.

m) Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissibleunder the provisions of the Income Tax Act, 1961. Deferred tax resulting from “timingdifference” between taxable and accounting income is accounted for using tax rates andlaws that are enacted or substantially enacted as on the balance sheet date. Deferredtax asset is recognized and carried forward only to the extent that there is a virtualcertainty that the asset will be realized in future.

n) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognisedwhen, there is present obligation as a result of past events and it is probable that there willbe an outflow of resources. Contingent Liabilities are not recognised but are disclosed in thenotes. Contingent Assets are neither recognised nor disclosed in the financial statements.

NOTE - 2 : SHARE CAPITAL

AUTHORISED :

2,75,00,000 (PY 2,75,00,000) Equity Shares of Rs 10/- each 2,750.00 2,750.00

ISSUED, SUBSCRIBED & FULLY PAID UP:

1,42,48,000 (PY 1,42,48,000) Equity Shares of Rs10/- each 1,424.80 1,424.80

(Of the above shares 98,01,000 Equity Shares were

allotted pursuant to scheme of amalgamation for

consideration other than cash)

The Company has issued only one class of equity shares having par value of Rs.10 per share.


Particulars As at31.03.2014

As at31.03.2013

(Rs. in lacs)


NAGA LIMITED

The reconciliation of the number of shares :

No. of Shares outstanding at the beginning of the year 1,42,48,000 1,42,48,000

No. of Shares outstanding at the end of the year 1,42,48,000 1,42,48,000

NOTE - 3 : RESERVES & SURPLUS

CAPITAL RESERVEAs per Last Balance Sheet Total - A 10.82 10.82

SECURITIES PREMIUM RESERVEAs per Last Balance Sheet 136.11 136.11

Total - B 136.11 136.11GENERAL RESERVE

As per Last Balance Sheet 166.18 145.18Add : Transferred from

Profit & Loss Account 21.00 21.00

Total - C 187.18 166.18

PROFIT & LOSS ACCOUNT

As per Last Balance Sheet 3,533.79 2,076.54

Add : On Amalgamation -- 174.46

Add : Profit for the Year 1,013.17 1,403.81

4,546.96 3,654.81

6070570

1855220

1350725

1165895

1024000

817855

NAME OFSHAREHOLDERS

As at 31st March, 2014

No. of Shares % of holding

Sri. K.S. Kamalakannan

Smt. Mageswarikannan

M/s. Naga Global Holding (India) Ltd.,

M/s. Lakme Investments & Finance Ltd.,

M/s. M.M.Detergents Company (P) Ltd.,

Sri. Sounderkannan

42.61

13.02

9.48

8.18

7.19

5.74

6059070

1756500

1339500

1159900

1100000

817855

42.53

12.33

9.40

8.14

7.72

5.74

As at 31st March, 2013

No. of Shares % of holding

(Rs.)

Particulars As at 31.03.2014 As at 31.03.2013


(Rs. in Lacs)

PARTICULARSAs at 31st


March, 2013

Details of shareholders holding more than 5% shares.


NAGA LIMITED

(Rs. in Lacs)



March, 2013

Less : Appropriations

Transferred to General Reserve 21.00 21.00

Proposed Dividend on Equity Shares 85.49 85.49

Tax on Dividend 13.87 14.53

Total - D 4,426.60 3,533.79

Total - A+B+C+D 4,760.71 3,846.90

NOTE - 4 : LONG TERM BORROWINGS

SECURED

Term Loans from Banks 6,654.65 6,119.20

Term Loans from Financial Institutions and Others 2.59 468.26

Total - A 6,657.24 6,587.46

UNSECURED

Term Loans from Financial Institutions and Others 696.11 748.37

Loans and Advances from Related Parties 1,308.66 1,305.98

Total - B 2,004.77 2,054.35

Total - A+B 8,662.01 8,641.81

Security & Other terms of loans

Term loan from Axis Bank Ltd amounting to Rs. 3897.87 lacs outstanding as at 31.03.2014(Previous year Rs. 4567.93 lacs) is primarily secured on the assets located at Food Division.Mineral Division and Detergents Division located at Dindigul District and further collaterallysecured on land at Kulathoor and Velvarkottai.

Term loan from Tamilnadu Industrial Investment Corporation Ltd., amounting to Rs. Niloutstanding as at 31.03.2014 (previous year Rs. 839.83 lacs)

Term loan from Standard Chartered Bank amounting to Rs. 1,809.07 lacs outstanding as at

31.03.2014 (Previous year Rs. 1507.90 Lacs) is primarily secured on assets purchased under

the loan and Land Measuring 4.01 Acres at Vedasandur. External commercial borrowings is

fully hedged.

Term loan from ICICI Bank Ltd amounting to Rs.91.51 Lacs outstanding as at 31.03.2014(Previous year Rs. 133.38 Lacs) is primarily secured on assets purchased under the loan.



NAGA LIMITED

Term loan from HDFC Bank Ltd amounting to Rs. 652.85 Lacs outstanding as at 31.03.2014(Previous year Rs. 729.29 Lacs) is primarily secured on the assets of the company located atTrichy.

Term loan from Tata Capital Ltd amounting to Rs. 9.82 Lacs outstanding as at 31.03.2014(Previous year Rs. 16.87 Lacs) is primarily secured on the assets purchased under the loan.

Term loan from The Karur Vysya Bank Ltd amounting to Rs. 1575 Lacs outstanding as at31.03.2014 (Previous year Rs. 575 Lacs ) is primarily secured on the Twin Theatre and AgriGodown located at Dindigul.

Term loan from Canara Bank amounting to Rs. 483.36 Lacs outstanding as at 31.03.2014(Previous year Nil ) is primarily secured on Solar System located at Dindigul.

Unsecured Term Loan from Bajaj Finance Ltd amounting to Rs. 750.34 Lacs outstanding as at31.03.2014 (Previous year Rs.803.68 Lacs) is personally guaranteed by the some of the directors.

Note :

a) The said loans are repayable in monthly / quarterly instalments

b) The Company does not have any continuing default as on the Balance Sheet date in therepayment of loan or interest.

NOTE - 5 : DEFERRED TAX LIABILITIES (NET)

Opening Balance 546.93 446.93

Related to Fixed Assets / Disallowances

under Income Tax Act, 1961 50.00 50.00

On amalgamation -- 50.00

596.93 546.93

NOTE - 6 : OTHER LONG TERM LIABILITIES

Others 123.95 129.83

123.95 129.83

(Rs. in Lacs)



March, 2013



NAGA LIMITED

NOTE - 7 : SHORT TERM BORROWINGS

Secured

(Secured by pari passu charge on inventories& Trade Receivables)

From Banks 5,834.00 6,751.32

Un Secured

From Banks 500.00 --

(Secured on personal guarantee of some of theDirectors of the Company)

6,334.00 6,751.32

NOTE - 8 : TRADE PAYABLES

Trade Payables 1,223.38 478.50

1,223.38 478.50

The Company is in the process of compiling relevant information from its suppliers abouttheir coverage under the Micro, Small and Medium Enterprises Development Act, 2006. Sincethe relevant information is still not available, no disclosures have been made in the accounts.

NOTE - 9 : OTHER CURRENT LIABILITIES

Current Maturities of Long Term Debts 1,914.97 1,838.15

Advances Received for Supply of Goods 18.46 54.45

Balances in Current Account with Banks 93.30 40.58

Others 253.22 130.82

2,279.95 2,064.00

NOTE - 10 : SHORT TERM PROVISIONS

Provision for Superannuation /

Gratuity / Leave Encashment 3.00 3.65

Proposed Dividend 85.49 85.49

Tax on Proposed Dividend 13.87 14.53

102.36 103.67

(Rs. in Lacs)



March, 2013



NAGA LIMITED

43

NO

TE -

11 :

FIXE

D A

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S (

Rs.

in L

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)

Tang

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Ass

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)

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Ass

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yea

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As

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Add

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559.

60

1,82

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-

1,82

4.91

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- - - - -

10.8

7 - -

10.8

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844.

63

3,18

4.19

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348.

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297.

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7.69

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-

153.

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104.

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94.5

6

49.6

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215.

18

1,61

9.86

24.5

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4.42

1,37

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- - - - -

8.37

- -

8.37

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8.37

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453.

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8

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in p

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NAGA LIMITED

NOTE - 12 : NON CURRENT INVESTMENTS

TRADE INVESTMENTS

In Equity Shares - Unquoted, fully paid up

Kerala Solvent Extract Ltd., (500 shares of Rs.10 each) 0.05 0.05

Sterling Spinners Ltd., (1000 shares of Rs.10 each) 0.25 0.25

Annai Power Pvt. Ltd., (10400 shares of Rs.100 each) 10.40 10.40

Total A 10.70 10.70

OTHERS (QUOTED)

Indian Overseas Bank (480 shares of Rs.10 each) 0.05 0.05

Reliance Equity Advantage Fund (535000 units of Rs.10 each) 53.50 53.50

Total B 53.55 53.55

Total A+B 64.25 64.25

Aggregate amount of Quoted investments

Cost 53.55 53.55

Market Value 53.74 53.81

Aggregate amount of Unquoted investments 10.70 10.70

NOTE - 13 : LONG TERM LOANS AND ADVANCES

(Unsecured and considered good)

Capital Advances 156.12 23.79

Security Deposits 138.52 130.76

Loans and Advances to Related Parties -- 1.24

Other Deposits / Advances 17.20 36.57

311.84 192.36

NOTE - 14 : OTHER NON CURRENT ASSETS

Deferred Trade Receivables 0.21 0.21

Others 13.36 15.08

13.57 15.29

NOTE - 15 : INVENTORIES

Raw Materials 5,627.69 6,145.03

Finished Goods & Stock in Process 376.99 463.50

Stores and Spares 196.43 177.39

Packing Materials 92.20 83.79

6,293.31 6,869.71

(Rs. in Lacs)



March, 2013



NAGA LIMITED

NOTE - 16 : TRADE RECEIVABLES


Over Six Months 200.32 39.48

Others 2,823.59 1,797.62

3,023.91 1,837.10

(Dues from companies/firms in which directors areinterested as directors / members / partners is Nil (PY Nil)

NOTE - 17 : CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents :

Cash on Hand 20.78 29.52

Bank Balances :

Balances with Bank in current account 282.59 342.66

Sub Total 303.37 372.18

Other Bank Balances :

Fixed Deposit with Banks 170.26 82.83

473.63 455.01

NOTE - 18 : SHORT TERM LOANS AND ADVANCES


Loans and Advances to Related Parties 4.69 --

Loans and Advances to Employees 31.06 16.12

Advances Recoverable in cash or kind or for value to be received 136.31 247.94

Advance Income Tax(Net of provisions CY Rs. 304.50 lacs PY Rs. 363.63 lacs) 59.71 22.73

231.77 286.79

NOTE - 19 : OTHER CURRENT ASSETS


Income Receivable 56.84 35.25

Others 0.27 --

57.11 35.25

(Rs. in Lacs)



March, 2013



NAGA LIMITED

NOTE - 20 : REVENUE FROM OPERATIONS

A. Sale of products

Manufactured Products

Wheat & Wheat Products 32,801.03 26,467.92

Minerals and Others 3,283.62 2,828.42

36,084.65 29,296.34Less : Excise duty - -

36,084.65 29,296.34 Traded Goods

Minerals 1,756.65 3,085.52

B.OTHER OPERATING INCOME

Grinding Charges 39.00 62.97

Conversion Charges 3,083.13 2,746.85

Sale of scrap 353.23 520.29

Warehousing Charges 160.88 152.70

Weighbridge Income 44.40 42.36

Power Income 588.92 732.01

Lorry Income 218.99 224.84

42,329.85 36,863.88

NOTE - 21 : OTHER INCOME

Interest Income 14.08 22.95

Dividend Income 1.52 0.45

Net Gain / (Loss) on Sale of Assets 1.69 -

Rent Receipts 119.42 138.15

Others 0.46 1.47

137.17 163.02

NOTE - 22 : COST OF MATERIALS CONSUMED

Wheat 27,476.78 22,260.82

Minerals & Others 1,924.72 2,069.36

29,401.50 24,330.18

NOTE - 23 : PURCHASES OF STOCK IN TRADE

Wheat 1,606.48 2,557.90

Minerals & Others 1.03 115.25

1,607.51 2,673.15

(Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013



NAGA LIMITED

NOTE - 24 : CHANGES IN INVENTORIES OF FINISHED GOOD,

STOCK IN PROCESS AND STOCK IN TRADE

Finished Goods / Stock in Trade (at close)

Wheat Products 275.12 360.22


Total A (at close) 376.99 463.50

Finished Goods / Stock in Trade (at commencement)

Wheat Products 360.22 168.26


Total B (at commencement) 463.50 181.91

(Increase)/decrease A -B 86.51 (281.59)

NOTE - 25 : EMPLOYEES BENEFITS EXPENSE

Salaries 532.77 444.60

Wages 396.73 387.22

Bonus & Exgratia 91.40 77.50

Gratuity 21.75 19.29

House Rent Allowance 154.68 130.30

Staff Training Fees 18.59 37.00

Contribution to Provident Fund & Other Funds 148.08 136.56

Leave Salary 16.24 9.80

Staff Welfare Expense 101.20 85.51

Conveyance Allowance 101.47 59.15

Special Allowance 79.15 47.55

Entertainment Allowance 15.91 9.90

Washing Allowance 15.94 9.92

Directors Salary 147.39 104.00

1,841.30 1,558.30

NOTE - 26 : FINANCE COSTS

Interest Expense - Banks 1,959.94 893.53

Interest Expense - Others 314.43 640.81

2,274.37 1534.34

(Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013



NAGA LIMITED

NOTE - 27 : OTHER EXPENSESMANUFACTURING EXPENSES

Production Expenses 566.35 459.81Power and Fuel 1,378.81 1,363.43Repairs to Machinery 364.37 475.85Laboratory Expenses 18.61 19.01

Total A 2,328.14 2,318.10

ESTABLISHMENT EXPENSESAnnual Maintenance Charges 80.52 73.62Bank Charges and Commission 130.03 84.91

Repairs to Building 63.23 66.09Printing & Stationery 21.76 16.05Subscription 10.55 5.33Telephone 30.27 23.84Professional Charges 43.12 27.84

Audit Fees 2.50 2.50Directors Sitting Fees 0.90 0.90Security Charges 70.51 78.34Legal Expenses 4.56 5.15

Donations 20.11 18.28Travelling & Vehicle Maintenance 487.64 435.25Insurance 54.41 43.24Rates, Licence and Taxes 35.23 39.20Pooja Expenses 4.58 5.30

Postage 4.56 3.68Computer Maintenance 5.14 4.56Rent & Electricity 64.16 68.95Windmill Expenses 18.16 18.66Others 9.12 10.51

Total B 1,161.06 1,032.20

SELLING & DISTRIBUTION EXPENSESAdvertisement 56.44 118.42Brokerage and Commission 22.36 19.43

Discount & Claims and Settlement 68.81 36.04Sales Promotion 344.16 270.81Freight and Handling 262.77 221.98

Total C 754.54 666.68

Grand Total A+B+C 4,243.74 4,016.98

(Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013



NAGA LIMITED

NOTE - 28 : VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED

Raw Materials

Imported -- 380.64

Indigenous 29,401.51 23,949.54

Stores and Spares

Imported 38.32 12.03

Indigenous 326.05 463.82

NOTE - 29 : CIF VALUE OF IMPORTS

Raw Materials -- 441.30

Components and Spares 36.67 8.05

Capital Goods 576.23 1,256.31

NOTE - 30 : EXPENDITURE IN FOREIGN CURRENCY -- --

NOTE - 31 : EARNINGS IN FOREIGN EXCHANGEGreen Energy Credit (carbon credit) -- 5.30

NOTE - 32 : REMUNERATION TO AUDITORSAs Auditors 2.00 2.00Taxation matters 0.50 0.50

NOTE - 33 : TAXES ON INCOME

Current tax : Current Tax is determined in accordance with the Income

Tax Act, 1961.

Deferred tax : Deferred Tax is calculated at the rates and laws that have

been enacted or substantively enacted as of the Balance Sheet date and is

recognised on timing difference that originate in one period and are of capable

of reversal in one or more subsequent periods. Deferred tax assets, subject to

consideration of prudence are recognised and carried forward only to the extentthat they can be realised.

(Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013



NAGA LIMITED

Note : Figures in italics represent previous year’s amounts

NOTE - 34 : RELATED PARTY DISCLOSURES:

a) Names of the related parties and nature of Relationship

(i) Associate Companies M/s. Naga Marine Industries Limited

M/s. M.M. Detergents Company PrivateLimited

M/s. Annai Power Private Limited

ii) Firm M/s. Rohini Enterprises

iii)Key Managerial Personnel Sri. K.S. Kamalakannan

Smt. Mageswarikannan

Sri. Sounderkannan

b) The above information regarding related parties have been determined to theextent such parties have been identified on the basis of information available withthe company.

Transactions with related parties.


FirmParticularsAssociate

Companies TotalKey MgmtPersonnel

Sales

Purchases

Wind Power Charges

Processing Income / Charges

Rental Income

Maintenance Expenses

Remuneration

Rent Paid

Interest Paid

Unsecured Loans

Debtors & other receivables

Creditors & other payables

1,503.15884.79

13.7022.13

147.39104.00

22.0921.30

145.13144.57

29.0929.80

1,308.661,305.98

4.6938.99

21.1696.574.69

37.75

---458.72

------

------

------

------

------

------

---0.57

3.00---

3.000.57

7.008.50

------------

1,287.501,209.41

------

---1.24

(Rs. in lacs)

---458.72

1,503.15884.79

13.7022.13

9.6115.43

6.310.64

------

15.9216.07

------

13.75---

13.75---

------

------

------

------

147.39104.00

------

145.13144.57

------

856.0143.65

------

27.39---

883.4043.65


NAGA LIMITED

NOTE - 35 : EARNING PER SHARE:

i) Net Profit after tax as per statement ofProfit and Loss (Rs in lacs) 1,013.17 1,403.81

ii) Weighted Average number of EquityShares outstanding 1,42,48,000 1,42,48,000

iii) Basic & Diluted Earning Per Share (in Rs.) 7.11 9.85

iv) Face Value Per Share (in Rs.) 10.00 10.00

NOTE - 36 : CONTINGENT LIABILITIES AND COMMITMENTS

I) Contingent Liabilities

a ) Guarantees to banks

Bank Guarantee Limit 1,500.00 1,000.00

Bank Guarantee Utilised 74.09 888.75

b) Corporate Guarantees

i) Furnished to M/s.M.M.Detergents Company Pvt. Ltd., for purchase of one no. of Excavator and one Breaker 52.60 52.60

ii) Commitments

Estimated amount of contract remaining to the executed onCapital Account (net of advances) and not provided for -- --

iii) Disputed demands of Service Tax outstanding 304.00 352.59

iv) Disputed demands of Customs Duty outstanding -- 12.26

v) Disputed demands of Sales Tax 39.60 39.60

The Company has been legally advised that the demand is likely to be either deletedor substantially reduced and accordingly no provision has been made.

NOTE - 37 : SEGMENT REPORTING:

The Business segment has been identified on the basis of products of the Company

and accordingly the operating segments of the Company are foods, Windmill and

Minerals & Detergents. Segments have been identified and reported taking into

consideration nature of products and services, the different risks and returns and the

internal business reporting systems. The accounting policies adopted for segment

reporting are in line with the accounting policies of the Company with following

additional policies for segment reporting.

(Rs. in Lacs)

PARTICULARS 2013-2014 2012-2013



NAGA LIMITED

NOTE - 38 : PREVIOUS YEAR FIGURES

Previous year’s figures have been regrouped / reclassified wherever necessary

to correspond with the current year’s classification / disclosure.


Mageswari Kannan Joint Managing

Director

K.S.KamalakannanChairman & Managing

Director

V. MarikannanCompany Secretary

Place : Chennai

Date : May 12, 2014


ParticularsFoods

Division

Minerals&

Detergents

WindmillDivision

Total

Segment Sales & Operational Income

Segment Result before Interest and Taxes

Less : Interest Expense

Profit before Tax

Current Tax

Deferred Tax

Profit after Tax

Less : Proposed Dividend and Dividend Tax

Retained Profit

Segment Capital EmployedSegment Assets-Segment Liabilities

35,071.6629,710.621,931.821,700.121,562.74

790.31369.08909.81

-

-

-

-

-

2061.213,578.98

6,786.466,583.451,467.321,215.72

641.73616.35825.59599.37

-

-

-

-

-

3,421.301,255.15

608.90732.83242.90435.9469.90

127.68173.00308.26

-

-

-

-

-

703.01437.57

42,467.0237,026.903,642.043,351.782,274.371,534.341,367.671,817.44

6,185.525,271.70

304.50363.6350.0050.00

1,013.171,403.81

99.36100.02913.81

1,303.79

Note : Figures in Italics represent previous year’s amounts

(Rs. in Lacs)


M.K. RavindranPartnerM.No: 020887


NAGA LIMITED

(Rs. in Lacs)

(A) CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT / (LOSS) BEFORE EXTRAORDINARY ITEMS 1,367.67 1,817.44Adjustment for :

Depreciation and amortisation of expenses 1,644.42 1,378.10

Interest Income (14.08) (22.95)

Dividend Income (1.52) (0.45)

Interest Expenses 2,274.37 1,534.34

Surplus on sale of assets (1.69) --

3,901.50 2,889.04

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 5,269.17 4,706.48Adjustment for :

Income Tax (341.48) (285.20)

Trade and other receivables (1,116.61) 149.49

Inventories 576.40 (4,490.02)

Trade payables and other payables 883.35 (1,551.58)

1.60 (6,177.31)

Net Cash from Operating Activities 5,270.77 (1,470.83)(B) CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (2,453.62) (4,981.11)

Changes in Non-Current Assets (124.30) --

Long Term Investments -- (12.50)

Proceeds from Sale/Deletion of Fixed Assets 4.19 --

(2,573.73) (4,993.61)

Net Cash flow from Investing activities 2,697.04 (6,464.44)

(C) CASH FLOW FROM FINANCING ACTIVITIESInterest Income 14.08 22.95

Dividend Income 1.52 0.45

Interest Expenses (2,274.37) (1,534.34)

Proceeds / Repayment of Borrowings (320.29) 8374.08

Dividend Paid (including dividend distribution tax) (99.36) (100.02)

Net cash from Financing Activities (2,678.42) 6,763.12

(D) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 18.62 298.68

Cash and Cash equivalents at the beginning of the period 455.01 156.33

Cash and Cash equivalents at the end of the period 473.63 455.01

18.62 298.68

Particulars 2013 - 2014 2012 - 2013

Mageswari KannanJoint Managing

Director

K.S.KamalakannanChairman & Managing

Director

V. MarikannanCompany Secretary


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2014


M.K. RavindranPartnerM.No: 020887



NAGA LIMITED

NAGA LIMITED

54

FORM NO. MGT 11PROXY FORM

(Pursuant to section 105 (6)of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014.)

NAGA LIMITED(CIN L24246TN1991PLC020409)

Registered Office : No.1, Anna Pillai Street, Chennai - 600 001.E-mail : [email protected], Website : www.nagamills.com

Phone : 044-25363535, Fax : 0451-2410122

Name of member(s) :

Registered address :

E Mail Id :

Folio No. / DPID - Client ID :

I/We, being the member(s) of ________________ shares of the above named Company, hereby appoint :

1) Name_______________________________________________ E Mail : ______________________________________

Address : __________________________________________________________________________________________

____________________________________ Signature ___________________________ Or failing him / her

2) Name_______________________________________________________ E Mail : _______________________________

Address : _______________________________________________________________________________________________

_______________________________________________________ Signature ______________________________________

as my / our proxy to attend and vote (on a poll) for me / us and on my / our behalf at the 23rd Annual General

Meeting of the Company, to be held on Friday, 1st August, 2014 at 12.15 p.m. at Presidency Club, No.51, Ethiraj

Salai, Egmore, Chennai-600 008 and at any adjournment thereof in respect of such resolutions, in the manner as

indicated below :

Ordinary Business

1. Adoption of audited financial statements and Reports of the Boardof Directors and Auditors for the financial period ended on 31stMarch 2014.

2. To declare a dividend on the equity shares of the Company

3. To appoint a director in place of Sri. Sounder Kannan, who retiresby rotation and being eligible offers himself for re-appointment.

4. To appoint M/s. D. Sampathkumar & Co., Chartered Accountantsas Statutory auditors of the Company and fix their remuneration.

Special Business

5. Re-appointment of Sri.K.S.Kamalakannan, Chairman & ManagingDirector of the Company.

6. Re-appointment of Smt. Mageswari Kannan, Joint Managing Directorof the Company.

7. Re-appointment of Sri.Sounder Kannan, Whole-Time Director ofthe Company.

8. Approval for increasing borrowing power of the Board ofDirectors under Section 180(1)(c) of the Companies Act, 2013.

Ordinary

Ordinary

Ordinary

Ordinary

Special

Special

Special

Special

ResolutionNo.

Description Type ofResolution

* Optional

For Against



NAGA LIMITED

Attendance Slip______________________________________________________________________________________NAGA LIMITED

(CIN L24246TN1991PLC020409)Registered Office : No.1, Anna Pillai Street, Chennai - 600 001.

E-mail : [email protected], Website : www.nagamills.comPhone : 044-25363535, Fax : 0451-2410122

23rd Annual General Meeting - August 01, 2014Registered Folio No. / DP ID No. / Client ID No.

Number of Shares held

I certify that I am a member / proxy for the members of the Company.

I hereby record my presence at the 23rd Annual General Meeting of the Company at the Presidency Club,

No.51, Ethiraj Salai, Egmore, Chennai - 600 008 on Friday the 1st August, 2014, at 12.15 P.M.

..................................... ........................................Name ofthe Member / Proxy Signature of the Members / Proxy(in BLOCK letters)Note : Please fill up this attendance slip and hand it over at the entrance of the meeting hall, members arerequested to bring their copies of the Annual Report to the AGM.

NOTE:1. This form of proxy, in order to be effective, should be duly completed and deposited at the Registered

Office of the Company, not less than 48 hours before the commencement of the Meeting;2. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the 23rd AGM;*3. It is optional to put a 'tick”' in the appropriate column against the Resolution indicated in the Box, if you

leave the 'For' or 'Against' column blank against any or all Resolutions, your Proxy will be entitled to vote inthe manner as he / she think appropriate;

4. Please complete all details including details of member(s) in above box before submission;

9. Ratification of remuneration payable to Mr.D.Vijay Anand, Vice-President of Foods Division.

10. Ratification of remuneration payable to Smt. Monna Kannan, CEOof the Retail Division.

11. Ratification of remuneration payable to Ms.M.Jayalalitha, CEO ofthe Detergents Division.

12. Ratification of remuneration payable to Sri. M. Sukumar, CommercialManager of the Minerals Division.

13. Ratification of remuneration payable to Smt. Lakshmi Vijay Anand,CEO of the Foods Division.

14. Re-appointment of Sri. S. Ramesh, as an Independent Director fora term of second consecutive five years.

15. Re-appointment of Sri. L.A. Irudayaraj, as an Independent Directorfor a term of second consecutive five years.

16. Approval for creation of Charges on the Assets of the Companyunder section 180(1)(a) of the Companies Act, 2013.

Special

Special

Special

Special

Special

Special

Special

Special

ResolutionNo.

Description Type ofResolution

* Optional For Against

Signed this .................................. day of ....................... 2014

Signature of Shareholder : ........................... Signature of Proxy holder(s) : ............................

Affixrevenue

stamp notless thanRs. 0.15

55

naga limitednotice to the shareholders notice is hereby given that the twenty third annual general...

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