MANAGEMENT DISCUSSION AND ANALYSIS

REVIEW OF THE OPERATION, CURRENT TRENDS AND FUTURE PROSPECTS

The global economy is on the recovery mode. Since our company is an export company, even an insignificant change in the economic factor affects us. The global economy grew by 2.1% as against Indian economic growth of 4.7%. The rate of inflation has increased from 4.2% in the year 2005-06 to 12.3% for the year 2009-10 and decreased to 9.5% for the year 2013-14. The total exports has increased from 105.2 billion dollar in the 2005-06 to 309.8 billion dollar in the year 2011-12 and 318 billion dollar for the year 2013-14.

The companys turnover in spite of certain economic bottleneck both domestic and global, has increased from Rs. 82.77 Crores to Rs.119.85 Crores. This has been possible due to the constant vigil and upgradation of facilities to satisfy the export market condition. The increased production of yarn has also benefited the company's increase in sales. A major hurdle is the power sector, which is closely monitored, so that necessary steps will be taken to overcome the same. The strength of Rupee is another factor which will have certain impacts on your company. The company expects a very good future in view of the stability of the economy.

The new government at the centre with pragmatic approach will pave way for stable economic growth. Though many fine prints are to be looked into and solved, a momentum has been created.

LISTING:

The equity shares of your company are traded at BSE T segment (Stock code 590055). The annual listing fee for the year 2014 - 15 has been paid. The company has received a communication from Madras Stock Exchange that the activities of the Madras Stock Exchange will be closed shortly. We have been advised to get listing in Bombay Stock Exchange. We are pleased to inform that the Bombay Stock Exchange has written to us that subject to certain conditions being fulfilled as per the diluted norms, our company can be listed in BSE. It is proposed to fulfill the conditions and be listed in BSE.

DIRECTORS:

Sri. S.V. Ravi, Director, retires by rotation at the ensuing Annual General Meeting and since he is eligible for re-appointment, it is proposed to reappoint him as Director of the company.

Smt. Durga Ramji, rebrsenting Women Directorship was co-opted as an Additional Director and will hold the office till the date of the forthcoming Annual General Meeting and being eligible offer herself for re-appointment and is proposed to be re-appointed as rebrsenting Women Directorship liable for retirement by rotation.

Sri. S. Renganathan, Director, retires by rotation at the ensuing Annual General Meeting under the erstwhile applicable provisions of the Companies Act, 1956. He is proposed to be appointed as an Independent Director for five consecutive years for a term upto 31st August, 2019, under the provisions of Section 149 of the Companies Act, 2013.

Sri. K. Lakshminarayanan, Sri. A. Tiruppathy Raja & Sri. S. Sankar, Directors, retire by rotation under the erstwhile applicable provisions of the Companies Act, 1956. They are proposed to be appointed as Independent Directors for five consecutive years for a term upto 31st August, 2019, under the Section 149 of the Companies Act, 2013.

DEPOSITS:

The total amount of deposits as on 31st March, 2014 is Rs.322.66 Lakhs. The company has no overdue deposits. Section 74 of the Companies Act, 2013 has provided an option to repay the existing deposits within the stipulated time as provided in Rules made thereunder. The Company has decided to repay all the existing deposits by complying with the formalities required in this regard.

ENERGY CONSERVATION / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE:

Information under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors), Rules, 1988 and forming part of the Director's Report is annexed herewith.

PARTICULARS OF EMPLOYEES:

Statement under Section 217 (2A) of the Companies Act, 1956, has not been furnished. Since, none of the employee is getting remuneration of more than Rs. 5,00,000/- per month or Rs.60,00,000/- per annum.

The Directors confirm:

a) That in the brparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) That appropriate accounting policies have been selected and applied them consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the company and for brventing and detecting fraud and other irregularities;

d) That the annual accounts have been brpared on a going concern basis.

AUDITORS:

M/s. Krishnan & Raman, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment. Based on the recommendation of the Audit Committee, the Board of Directors of the Company have proposed the appointment of M/s. Krishnan & Raman, Chartered Accountants, as the Auditors of the company from the conclusion of the forthcoming 29th Annual General Meeting till the conclusion of the 32nd Annual General Meeting and have further confirmed that the said appointment would be in conformity with the provisions of Section 141 of the Companies Act, 2013.

Under Section 139 of the Companies Act, 2013, a listed Company can appoint an Audit firm as auditor for a maximum of 2 terms of five consecutive years. However, they are eligible for reappointment after a period of 5 years from the completion of such term. The Auditors have completed the maximum threshold limit of 10 consecutive years. However, a period of three years is given for compliance of the new requirement. Since a period of three years is available to continue with the existing auditors, it is proposed to appoint them for the remaining eligibility period of three years.

COST AUDITORS:

The Government of India has approved the proposed to appoint Sri. P.K. Ramasubramanian, Cost Accountant, Rajapalayam, to audit the Cost Accounts of the Company for the period ended 31st March, 2014. The Cost Audit report for the earlier year has been filed.

As per provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, the Government has not notified the products of our company to which the Cost Audit would be applicable. Based upon such notifications and as and when clarification is issued, the Company will take steps for compliance.

REPORT ON CORPORATE GOVERNANCE:

The Company has complied with the requirements of Corporate Governance as stipulated in Clause 49 and 35 B of the Listing Agreements. A report on Corporate Governance is annexed herewith and it forms part of the Directors Report.

ACKNOWLEDGEMENT:

Your Directors thank City Union Bank Ltd., for their help and co-operation during the year. The Board also records its apbrciation for the hard and dedicated efforts of the employees at all levels.

On Behalf of the Board,

For POLYSPIN EXPORTS LIMITED,

S.V. RAVI

 Director

R.RAMJI

Managing Director

Place : Rajapalayam

Date : 16.07.2014