Dear Members,
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Your Directors have pleasure in presenting the 34 Annual Report together with audited
accounts of the
st
Company for the year ended 31 March, 2024.
FINANCIAL RESULTS: (Rs. in Lakhs)
|
2023 - 24 |
2022 - 23 |
| Profit before Depreciation |
59.67 |
(1,794.07) |
| Less: Depreciation |
2,886.58 |
2,728.98 |
| Profit before Tax from Continuing Operations |
(2,826.91) |
(4,523.05) |
| Less :Taxes |
(763.65) |
(1,382.52) |
| Net profit after Tax from Continuing Operations |
(2,063.26) |
(3,140.53) |
| Profit (loss) from Discontinued Operations (Refer Note no 53) |
(861.06) |
(526.37) |
| Less :Taxes of Discontinued Operations |
(300.89) |
(183.93) |
| Net profit after Tax from Discontinued Operations |
(560.17) |
(342.44) |
| Profit for the period |
(2,623.43) |
(3,482.97) |
| Add: Other Comprehensive Income |
42.30 |
66.94 |
| Total Comprehensive Income |
(2,581.13) |
(3,416.03) |
DIVIDEND
Your Directors have not recommended any dividend for the year 2023-24.
REVIEW OF OPERATIONS
Spinning forms the major Revenue and Profit segment of the Company. Hence performance
of Spinning divisions has a significant bearing on the overall performance of the Company.
However for the last few years the Spinning divisions operations have been affected by
various factors viz. wild fluctuation in cotton prices, weak demand for yarn & fabric
in overseas markets due to high inflation and recessionary pressures in developed
economies, increased food, energy and supply chain costs, supply disruptions leading to
higher lead time and costs etc. all of which resulting in disparity between cotton and
yarn prices thereby affecting the margins. Hence the performance of the Company as a whole
was affected during the year leading to a loss of Rs.2623.43 lakhs.
The Company has considered the shares held in Young Brand Apparel Private Limited and
the assets of the Garment and Processing Divisions as discontinued operations and
classified as assets held for sale/ discontinued operations. There is no change in the
nature of business during the Financial year and until the date of this report.
Unit wise performance of the company :
Spinning Units
During the year under review, the Spinning mills produced 21503.01 tonnes (24047.71
tonnes) and sold 19349.41 tonnes (18375.82 tonnes) of Yarn.
The sales include 291.55 tonnes (225.89 tonnes) by way of export. The total yarn sales
amounted to Rs.52679.62 lakhs (Rs.59331.40 lakhs) of which export sales amounted to
Rs.817.63 lakhs (Rs.844.81 lakhs). The reduction in export sales is due to weak demand
during the year.
The Spinning division produced 7966.21 tonnes (8818.71 tonnes) of saleable waste cotton
and sold 6983.32 tonnes (8903.13 tonnes) and the total waste cotton sales of this division
amounted to Rs.6491.27 lakhs (Rs.8377.18 lakhs).
Weaving Unit
The Weaving Unit specializes in manufacturing wider-width cotton grey woven fabric.
During the year under review, 127.40 lakh metres (145.44 lakh metres) of fabric were
produced and 127.82 lakh metres (102.46 lakh metres) of fabric were sold.
The sales include 32.69 lakh metres (23.92 lakh metres) by way of export. The total
fabric sales amounted to Rs.9130.54 lakhs (Rs.10153.12 lakhs) of which export sales
amounted to Rs.2788.59 lakhs (Rs.3126.20 lakhs).
Home Textile Unit
During the year under review, the Home Textile Unit produced 25.22 lakh pieces (38.28
lakh Pieces) of made ups and sold 32.50 lakh pieces (36.68 lakh pieces) and made fabric
sales of 6.03 lakh metres ( 3.70 lakh metres)
The total sales of this unit amounted to Rs.4109.22 lakhs (Rs.5086.92 lakhs) which
includes fabric sales amounting to Rs.434.82 lakhs (Rs.621.22 lakhs).
Knitting Unit
During the year under review, 4222.34 tonnes (3314.29 tonnes) of Knitted fabric were
produced and 3723.52 tonnes (2979.93 tonnes) were sold. The total sales of this unit
amounted to Rs.10835.28 lakhs (Rs.10760.65 lakhs) of which export sales amounted to
Rs.1595.58 lakhs (Rs.561.61 lakhs). Apart from cotton fabric, the division produced 6.30
lakh meters and sold 5.82 lakh meters of viscose fabric, the sale value of which amounted
to Rs.210.53 lakhs.
Processing Unit
During the year under review, 1918.31 tonnes (1890.01 tonnes) of fabric were processed
on job work basis and 1075.91 tonnes (1240.20 tonnes) of fabric were produced and 1368.06
tonnes (1600.43 tonnes) of fabric were sold. The total fabric sales of this division
amounted to Rs.5202.28 lakhs (Rs.6683.96 lakhs).
Wind Mills
The company has 4 windmills of 1250 KW each totaling 5 MW in Radhapuram Taluk,
Tirunelveli District, Tamilnadu, 23 windmills, each of 800 KW capacity totaling 18.40 MW
capacity in Dharapuram Taluk, Tirupur District and Palani Taluk, Dindigul District,
Tamilnadu. The total installed capacity of Windmills is 23.40 MW and the whole of the wind
power generated is captively consumed by the Spinning Units and Weaving Unit.
The windmills produced 371.91 Lakh units of power as against 337.51 Lakh units produced
in the last year.
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The Board of Directors of the Company at their meeting held on 4 December 2023 has
approved the MOU for sale of its entire shareholding in Young Brand Apparel Private
Limited (YBAPL), subsidiary of the Company and for sale of its Garment unit at Palladam
and land at SIPCOT, Perundurai to SP Apparels Limited. The Company has obtained the
approval from the Shareholders of the Company through
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Postal Ballot on 10 March 2024 for the disinvestment of shares held in subsidiary
company. The Company has received an advance of Rs. 3,250 Lakhs during the year ended
31.03.2024. In terms of Ind AS-105,the operations of the above units were treated as
discontinued operations and accounted accordingly.
PROSPECTS FOR THE FINANCIAL YEAR 2024-25
The textile and apparel industry is facing uncertainty and challenges in demand and
operational Profitability. The export demand is weak on account of factors discussed
earlier. The domestic demand looks promising but pricing concerns remain. Overall the
prospects for the current year depends on improvement in demand scenario as well as prices
and hence difficult to estimate at this point of time.
During the year under review, the Company has entered into Memorandum of Understandings
with S.P. Apparels Limited for sale of its Investments in the Subsidiary Viz., Young Brand
Apparel Private Limited, a material Subsidiary, for a consideration of Rs. 95 Crores and
sale of its garment unit located at Palladam Hi Tech Weaving Park, Palladam and Sale of
6.43 Acres of land with Buildings located at R-44, SIPCOT, Perundurai for a aggregate
consideration of Rs. 58 Crores. The amounts realised out of the above transactions are
proposed to be utilized for reduction of debts of the Company.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
There are no material changes and commitments affecting the Financial position of the
Company, subsequent to the end of the Financial Year.
There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016. There
was no instance of one-time settlement with any Bank or Financial Institution.
PUBLIC DEPOSITS
The Company has no public deposits outstanding at the beginning of the year and, the
Company has not accepted any deposits within the meaning of Section 73 to 76 of the
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year
under review.
SHARE CAPITAL
During the year the Authorised Share Capital of the Company was increased from Rs. 50
Crores to Rs. 75 Crores Comprising of 15 Crores of Equity Shares of Rs. 5/- each, with the
approval of Shareholders through Postal Ballot.
CORPORATE GOVERNANCE
In line with requirements of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 your Company is committed to the principles of good Corporate Governance
and continues to adhere good corporate governance practices consistently.
A separate section is given as part of this Annual Report, on Corporate Governance,
Management Discussion and Analysis along with a certificate from a Practicing Company
Secretary regarding compliance of conditions of Corporate Governance as stipulated under
Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
ANNUAL RETURN
Pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013, Annual Return
for Financial Year ended on 31st March, 2024, is posted on the website of the Company
viz., www.bannarimills.com
DIRECTORS
Sri S V Arumugam, (DIN 00002458) will retire by rotation at the ensuing Annual General
Meeting, he is eligible for re-appointment and seeks re-appointment.
Sri C Sivasamy was appointed in the Board of Directors of the Company as an Additional
Directors w.e.f 28.6.2023 and special resolution was passed to confirm his appointment as
an Independent Director by the shareholders in the last Annual General meeting held on
25th September 2023 to comply with requirement under regulation 17 (1) (c) of SEBI (LODR)
Regulations, 2015.
Sri K.P Ramakrishnan and Smt Priya Bhansali were appointed as additional Directors
w.e.f 29.5.2024 for a term of 5 years in the capacity of Independent Directors subject to
the approval of Shareholders. Special resolutions for this purpose are being placed before
the ensuing Annual General Meeting, in compliance of the requirement s of the Regulation
17 (1) of SEBI (LODR) Regulations, 2015.
Sri K Sadhasivam, whose appointment as an Independent Director expires on 24.8.2024, on
completion of his second term of 5 consecutive years of office as an Independent Director.
It is Proposed to appoint him as Non - Executive Director, in Non - Independent Director
category. A suitable resolution for his appointment is proposed at the ensuing Annual
General Meeting.
Further Sri S Palaniswami and Dr.K Thillainathan appointment as Independent Directors
expire on 24.8.2024. The Board places record of the valuable services rendered by them to
the Company during their tenure of office.
All the Independent Directors have given declarations that they have met the criteria
of independence as laid down under Section 149 (6) of the Companies Act, 2013 and
Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
The company has obtained a Certificate from Sri R Dhanasekaran, Company Secretary in
Practice certifying that none of the Directors on the Board of the Company have been
debarred or disqualified from being appointed or continuing as Directors of companies by
the Board/Ministry of Corporate Affairs or any such statutory authority.
KEY MANAGERIAL PERSONNEL
The Company has appointed the following persons as Key Managerial Personnel:
| Name of the persons |
Designation |
| Sri S V Arumugam |
Managing Director |
| Sri S Seshadri |
Chief Financial Officer |
| Sri N Krishnaraj |
Company Secretary |
AUDIT COMMITTEE
The Audit Committee comprises of
| 1. Sri S Palaniswami - |
Chairman (Non- Executive Independent Director) |
| 2. Sri K Sadhasivam - |
Member (Non- Executive Independent Director) and |
| 3. Dr K R Thillainathan - |
Member (Non- Executive Independent Director) |
The Board has implemented the suggestions made by the Audit Committee from time to
time.
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the evaluation
of Independent Directors are done by the entire Board of Directors including performance
and fulfilment of independence criteria specified in the regulation and their independence
from the Management. Independent Directors at their meeting without participation, of
non-Independent Directors and management considered and evaluated the Boards' performance,
performance of the Chairman and Managing Director.
The Board has carried out an annual evaluation of performance of Board and of
individual Directors as well as the Committees of Directors. The evaluation has been
conducted internally in the manner prescribed by Nomination and Remuneration Committee.
BOARD MEETINGS
During the year under review, 8 (Eight) Board Meetings were conducted. The details of
the same have been given in the Corporate Governance Report under Regulation 17 of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forming part of
this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not furnished/extended any Corporate Guarantee during the year under
review. Investments of the Company in the shares of other companies is provided under
notes to Balance Sheet appearing in this Annual Report.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for Directors and employees to report
concerns about unethical behavior, actual or suspected fraud or violation of the Company's
code of conduct or ethics. The policy has been posted in the website of the Company:
www.bannarimills.com.
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors have framed a policy setting out the framework for payment of
Remuneration to Directors, Key Managerial Personnel and Senior Management Personnel of the
Company. The policy is explained as part of the Corporate Governance Report. The Committee
ensures that a. The level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate Directors of the quality required to run the Company
successfully
b. Relationship of remuneration to performance is clear and meets appropriate
performance benchmarks and
c. Remuneration to Directors, Key Managerial Personnel and senior management involves a
balance between fixed and incentive pay reflecting short and long term performance
objectives appropriate to the working of the Company and its goals.
RELATED PARTY TRANSACTIONS
All the related party transactions that were entered into during the financial year in
the ordinary course of business and the prices were at arm's length basis. Hence, the
provisions of Section 188 (1) of the Companies Act, 2013 are not attracted. Further no
materially significant related party transactions were entered by the Company with
Promoters, Directors, Key Managerial Personnel or other designated persons which may have
potential conflict with interest of the company at large. Approval of Audit Committee was
obtained for transactions of repetitive nature on annual basis. All related party
transactions are placed before the Audit Committee for approval and Board of Directors for
their review. The policy on Related Party Transactions is available in the website
www.bannarimills.com.
Disclosure of these Transactions in form AOC-2 pursuant to Section 134 (3)(h) of the
Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 as set out
below :
Form AOC - 2
Form for disclosure of particulars of contracts / arrangements entered into by the
company with related parties referred to in sub-section (1) of section 188 of the
Companies Act, 2013 including certain arm's length transactions under third proviso
thereto
1. Details of contracts or arrangements or transactions not at arm's length basis: Nil
2. Details of material contracts or arrangement or transactions at arm's length basis:
Nil
The company has borrowed Rs.17.00 Crores as Inter Corporate Deposits from Murugan
Enterprise Private Limited, one of the Promoters and holding company of the company. There
was no transaction made with any person or entity belonging to promoter/promoter group
which holds 10% or more shareholding in the Company.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the Regulators/Courts that would
impact the going concern status and the Company's operation in future.
DIRECTORS' RESPONSIBILITY STATEMENT
As stipulated in Section 134 (5) of the Companies Act, 2013 your Directors confirm
that:
a) Your Directors have followed in the preparation of the annual accounts, the
applicable accounting standards with proper explanation relating to material departures;
b) Your Directors have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the
profit and loss of the Company for that period;
c) Your Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) Your Directors have prepared the annual accounts on a going concern basis;
e) Your Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively; and
f) Your Directors have devised proper system to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS
The present Auditors of the Company M/s P N Raghavendra Rao & Co., Chartered
Accountants, (Firm Registration No: 003328S) Coimbatore, were appointed for a term of 5
years, pursuant to the resolution
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passed by the members at the Annual General Meeting held on 26 September, 2022 and hold
office upto the conclusion of the Annual General Meeting to be held in the year 2027. The
Company has received a communication from them confirming their eligibility to continue as
Auditors of the Company.
The Auditor's Report does not contain any qualifications, reservation or adverse
remarks, requiring any comments by the Board of Directors.
DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under provisions of Section 143
(12) of the Companies Act, 2013 and rules made thereunder.
SECRETARIAL AUDIT
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Mr R Dhanasekaran, Practicing Company Secretary to undertake the Secretarial
Audit of the Company in respect of the Financial Year 2023-24. The Secretarial Audit
report of the Company and its material unlisted subsidiary Viz., Young Brand Apparel
Private Limited are annexed herewith as
Annexure - I.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with all applicable Secretarial Standards issued by the
Institute of Company Secretaries of India from time to time.
COST AUDITOR
Pursuant to section 148 of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors, on
the recommendation of Audit Committee, has appointed Sri M Nagarajan, Cost Accountant,
Coimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year
2024 - 2025. The Company has maintained such accounts and cost records as required under
Section 148 (1) of the Companies Act, 2013.
JOINT VENTURE, ASSOCIATE AND SUBSIDIARIES
The Company has following three subsidiaries as on 31.3.2024: i. Young Brand Apparel
Private Limited (also Joint Venture Company) ii. Young Brand Global Private Limited
(Subsidiary of Young Brand Apparel Private Limited) iii. Bannari Amman Infinite Trendz
Private Limited.
In accordance with the Section 129 (3) of the Companies Act, 2013, the consolidated
Financial Statements of the Company has been prepared which forms part of the Annual
Report. A separate statement containing the salient features of the Financial Statements
of Subsidiaries in Form AOC-1 (Part A) is ANNEXURE - II.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The scope and authority of the Internal Audit function is
defined in the Internal Audit Manual. To maintain its objectivity and independence, the
Internal Audit function reports to the Chairman of the Audit Committee and to the Chairman
and Managing Director of the Company.
The Company has Independent Internal Auditor and an Internal Audit Department, which
monitors and evaluates the efficiency and adequacy of internal control system in the
Company, its compliance with operating systems, accounting procedures and policies at all
locations of the Company.
Based on the report of internal audit function, corrective actions are taken in the
respective areas and thereby strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to the Audit Committee
of the Board.
STATEMENT ON RISK MANAGEMENT POLICY
Pursuant to section 134(3)(n) of the Companies Act, 2013, the Committee has developed a
Risk Management Policy and implemented the same. At present the Company has not identified
any element of risk which may be of threat to the existence of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility Committee which shall
recommend to the Board, the activities to be undertaken by the Company as specified in
Schedule VII, recommend the amount of expenditure to be incurred on such activities and
monitor the CSR policy of the Company. The company has fully spent the amount stipulated
under the requirements of the Act. The
Company has constituted Corporate Social Responsibility Committee consisting of the
following Directors:
| 1. |
Sri S V Arumugam |
- |
Chairman - Managing Director |
| 2. |
Sri S Palaniswami |
- |
Member - Independent Director |
| 3. |
Sri K Sadhasivam |
- |
Member - Independent Director |
The CSR activities and its related particulars is enclosed as Annexure III
STATUTORY DISCLOSURES
I. Conservation of Energy and others- The particulars required to be included in terms
of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies
(Accounts) Rules, 2014 for the year ended 31st March, 2024, relating to Conservation of
Energy, etc., is enclosed as Annexure IV.
II. Remuneration of Directors and other details- The information required under Section
197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and forming part of the Directors' Report for the year
ended 31st March, 2024 is provided in Annexure V.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
During the year under review the human relations continued to be very cordial. The
Company wishes to acknowledge the contribution of the employees at all levels of the
Organisation.
The Company has an Anti-Sexual Harassment Policy in line with the requirements of The
Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act,
2013 and an Internal Complaints Committee (ICC) has constituted to redress complaints of
sexual harassment as provided therein. All employees (permanent, contractual, temporary,
trainees) are covered under this policy.
| a. |
No. of complaints filed during the financial year 2023 - 24 |
- |
Nil |
| b. |
No. of complaints disposed off during the financial year 2023 - 24 |
- |
Nil |
| c. |
No. of complaints pending as on end of financial year 2023 - 24 |
- |
Nil |
ACKNOWLEDGEMENT
Your Directors acknowledge with gratitude the timely assistance and help extended by
the Bankers for having provided the required bank facilities. Your Directors wish to place
on record their appreciation of the contributions made by the employees at all levels for
the excellent performance of your company.
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