To
The Members
Your Directors are pleased to present their Sixtieth Annual Report on
the business and operations of the Company and the financial results for the year ended
31st March, 2023.
Financial Results
( in Lakhs)
|
2022-2023 |
2021-2022 |
Gross Profit before Interest & Depreciation |
6,795.19 |
8,505.43 |
Less : Interest |
2,449.35 |
2,426.28 |
: Depreciation & Amortisation expense |
1,756.18 |
1,604.39 |
|
4205.53 |
4,030.67 |
Profit/(Loss) before prior year Adjustment |
2,589.66 |
4,474.76 |
Exceptional Items |
(719.36) |
520.31 |
Profit / (Loss) before tax for the year |
1,870.30 |
4,995.07 |
Less: Current Tax |
319.73 |
- |
Less : Deferred tax liability |
278.44 |
1,558.07 |
Profit / (Loss) after tax from continuing operations |
1,272.13 |
3,437.00 |
Profit / (loss) from discontinued operations |
(272.97) |
(4,964.18) |
Tax expense on discontinued operations |
(40.95) |
(1,548.82) |
Profit / (Loss) after tax from discontinued operations. |
(232.02) |
(3,415.36) |
Profit / (Loss) for the period |
1,040.11 |
21.64 |
Other Comprehensive Income |
(23.59) |
15.87 |
Total Comprehensive Income for the period |
1,016.52 |
37.51 |
Add : Opening Other Equity |
23,164.67 |
21,527.41 |
Add : Equity component on preferential shares |
63.99 |
|
Add : Share premium on allotment of Preferential
Equity shares |
- |
1,599.75 |
Sub Total |
24,245.18 |
23,164.67 |
Less: Dividend on Equity share capital |
- |
- |
Less: Corporate Dividend Tax |
- |
- |
Less: Transferred to General Reserve |
- |
- |
Other Equity at year end |
24,245.18 |
23,164.67 |
OPERATIONS
The Operations for the current financial year 2022-23 reflects the
continued optimism in the Indian economy. The turnover at Rs. 857.3 crores has registered
an increase of 9.4% over the previous year. The profit after tax is Rs.10.4 crores, a
significant improvement over the last year. The production in both the Spinning and Denim
fabric divisions has been satisfactory. There is significant improvement in the domestic
and export realization of Denim fabric. The yarn sales have largely remained stable both
in volume and realization while the fabric division has seen some growth in the domestic
business and better export realization. The performance of the spinning division is
subdued on account of fluctuations in cotton prices.
POWER PLANT
The company has completed the sale of the Power Plant and used the sale
proceeds to reduce the term loan liabilities.
DIVIDEND
In compliance with the conditions imposed by our lenders on declaration
of dividend during the restructuring arrangement, your board regrets its inability to
recommend a dividend for the year under review. The company is in the process of exiting
from restructuring arrangement and your board is confident, barring unforeseen
circumstances, of resumption of dividend pay out to shareholders at the earliest
reasonable opportunity.
CAPITAL EXPENDITURE
During the year under review the Company incurred capital expenditure
of Rs. 2347.64 lakhs for solar power plant, fancy yarn attachment & carding machinery
& others.
EXPORTS
The American and European economies have been experiencing recessionary
trends since last year impacting the fabric exports to these markets. The company however
had undertaken sustainable initiatives like recycling and cleankore (sustainable dyeing
technology) to achieve around 15% growth in export revenues. The export realization had
also improved significantly on account of better product mix and innovations which were
well received by our reputed clientele like Lee, Wrangler, Dickies, Timberland, Wal-Mart,
Amazon Gorge, Primark, Salisbury, Jack & Jones, etc. The Company hopes to improve on
these initiatives in the coming year.
FUTURE OUTLOOK
While the performance in the financial year 2022-23 is encouraging the
rising other input costs like dyes, chemicals, coal & power etc. present a challenge
and an opportunity to the Company. The Company will continue to do its best in the present
global scenario to meet the evolving challenges.
DIRECTORS
IDBI withdrew the nomination of Sri. Rajan Ravindra Shukla in the first
week of May 2023. The Board wishes to place on board its appreciation of the contribution
made by Sri. Rajan Ravindra Shukla to the deliberation of the Board during his tenure.
During the year, Sri. Paritosh Agarwal (DIN: 00008738), Managing
Director will retire at the ensuing Annual General Meeting and being eligible, offers
himself for reappointment.
Further details about the above directors are given in the Corporate
Governance Report as well as in the Notice of the ensuing Annual General Meeting being
sent to the shareholders along with the Annual Report.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act, 2013, and as per the latest
Listing Regulations, the annual performance evaluation of the Board its Committees and of
Individual Directors was carried out during the year under review.
More details on the same are given in the Corporate Governance Report.
FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarisation program for the
Independent Directors to provide insights into the Company to enable the Independent
Directors to understand its business in depth and contribute significantly to the Company.
The details of such program are available in the Company's website
www.suryalakshmi.com
DECLARATION BY INDEPENDENT DIRECTORS
The Company has obtained the declaration from the Independent Directors
confirming that they meet the criteria of Independence laid down in Section 149(6) of the
Companies Act, 2013.
MEETING OF INDEPENDENT DIRECTORS
A separate meeting of the Independent Directors was held under the
Chairmanship of Sri R. Surender Reddy, Independent Director on February 14, 2023,
inter-alia to discuss evaluation of the performance of Non-Independent Directors, the
Board as a whole, evaluation of the performance of the Chairman, taking into account the
views of the Executive and Non-Executive Directors and the evaluation of the quality,
content and timeliness of flow of information between the management and the Board that is
necessary for the Board to effectively and reasonably perform its duties.
The Independent Directors expressed satisfaction with the overall
performance of the Directors and the Board as a whole.
POLICY ON APPOINTMENT & REMUNERATION OF DIRECTORS
The Board of Directors has framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and Senior Management
of the Company. The Policy broadly lays down the guiding principles, philosophy and the
basis for payment of remuneration to Executive and Non-executive Directors (by way of
sitting fees and commission), Key Managerial Personnel, Senior Management and other
employees.
The policy also provides the criteria for determining qualifications,
positive attributes and Independence of Directors and criteria for appointment of Key
Managerial Personnel / Senior Management and performance evaluation which are considered
by the Nomination and Remuneration Committee and the Board of Directors while making
selection of the candidates. The above policy has been posted on the website of the
Company at www. suryalakshmi.com.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(b) the Directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern
basis; and
(e) the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and are
operating effectively.
(f) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
DISCLOSURES UNDER THE COMPANIES ACT, 2013
i) Annual Return:
The Company's Annual Return has been hosted on Company's
website and can be accessed at the web link www.suryalakshmi.com. Therefore, the extract
of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule
12 of Companies (Management and Administration) Rules, 2014 has not been annexed to this
Board's Report. ii) Number of Board Meetings:
The Board of Directors met four times during the year 2022-2023. The
details of the board meetings and the attendance of the Directors are provided in the
Corporate Governance Report. iii) Audit Committee:
The Board has constituted the Audit Committee which comprises of Sri R.
Surender Reddy, as the Chairman and Sri R. S. Agarwal, Sri Navrang Lal Tibrewal and Sri
Rajan Ravindra Shukla since 30/04/2022 as the members. More details on the committee are
given in the Corporate Governance Report. iv) Related Party Transactions:
All the related party transactions are entered into on arm's
length basis and are in compliance with the applicable provisions of the Companies Act
2013 and the Listing Regulations. There are no materially significant related party
transactions made by the company with Promoters, Directors or Key Managerial Personnel
etc. which may have potential conflict with the interest of the company at large. Thus
disclosure in Form AOC-2 is not required to be made. All Related Party Transactions are
disclosed to the Audit Committee and the Board.
Omnibus approval is obtained for the transactions which are foreseeable
and repetitive in nature. A statement of all related party transactions is presented
before the Audit Committee and the Board on a quarterly basis, specifying the nature,
value and terms and conditions of the transactions. The Related Party Transactions Policy
as approved by the Board is uploaded on the company's website at the web link:
http://www.suryalakshmi.com/investor.corporate. governance.aspx
v) REPORTING OF FRAUDS
There was no instance of fraud during the year under review, which
required the Statutory Auditors to report to the Audit Committee and / or Board under
Section 143(12) of Act and Rules framed thereunder.
vi) No Loans/Guarantees / Investments under Section186 of the Companies
Act, 2013 have been made during the year.
vii) There were no significant and material orders passed by the
Regulators/ Courts that would impact the going concern status of the Company and its
future operations
CORPORATE GOVERNANCE
As per the latest Listing Regulations on Corporate Governance,
Management Discussion and Analysis Report forms part of the Annual Report (ANNEXURE - 5).
The Company has complied with the corporate governance requirements under the Companies
Act, 2013 as stipulated under the Listing Regulations. A separate section on corporate
governance under the Listing Regulations, along with a certificate from the auditors
confirming the compliance, is annexed and forms part of the Annual Report (ANNEXURE - 1).
CORPORATE SOCIAL RESPONSIBILITY POLICY
At Suryalakshmi a major concern has been, the sincere effort by the
Company to recognize the role played by the Society at large, the environment and its
human resources in its sustainability and growth and to strive to discharge its social
responsibility as a corporate citizen. To this end, the Company has always tried to strike
a fine balance of economic, environmental and social commitments. The sustainable
stewardship mantra is not limited to philanthropy, but encompasses holistic community
development and other initiatives to strengthen business sustainability. The core areas
for Suryalakshmi's Corporate Social Responsibility (CSR) Programmes for this year
have been health care, environment and education. Details of the projects / activities
implemented by the Company are furnished in a separate ANNEXURE-2 to this report.
The Company constituted a Committee of CSR consisting of Sri L. N. Agarwal, Sri Paritosh
Agarwal and Sri R. Surender Reddy, with Sri L. N. Agarwal as Chairman.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The reconstituted Stakeholders Relationship Committee consists of
following Directors. Mr. Navrang Lal Tibrewal, Chairman (Independent Director), Sri L. N.
Agarwal, (member), Sri Paritosh Agarwal (member) and Sri E.V.S.V. Sarma, Compliance
Officer & Company Secretary.
RISK MANAGEMENT
The Company has instituted a proper mechanism for identifying and
establishing controls to effectively manage different kinds of risks viz., Trend Related
Risks, Raw Material Risks, Brand / Technology Risks, Operational Quality Risks, Human
Resources Risks, Regulatory Risks and Financial Risks. A Committee headed by Sri Paritosh
Agarwal, Managing Director periodically reviews the risks and takes steps to mitigate
identified risks.
WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower policy for vigil mechanism
for Directors and employees to report to the management about unethical behaviour, fraud,
violation of Company's Code of Conduct, which also ensures safeguards against
victimization of those employees who seek to make use of the free access to the Audit
Committee for this purpose. None of the Personnel has been denied access to the audit
committee. The Whistle Blower Policy has been posted on the website of the Company at www.
suryalakshmi.com/investor-corporate-governance.aspx
DECLARATION ABOUT COMPLIANCE WITH THE CODEOF CONDUCT BY MEMBERS OF THE
BOARD AND SR.MANAGEMENT PERSONNEL.
The Company has complied with the requirements of Code of Conduct for
Board members and Sr. Management Personnel.
DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL)
ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary and trained) are covered under the Policy. The following is a summary of sexual
harassment complaints received and disposed of during each Calendar year:
a) No. of Complaints received - NIL
b) No. of Complaints disposed off during the year - NIL
c) No. of cases pending as at end of the Financial Year - NIL
AUDITORS
I. Statutory Auditors and their Report:-
M/s. Brahmayya & Co, Chartered Accountants, Hyderabad (ICAI Firm
Regn No.000513S) were appointed as auditors for a period of 5 years in the 59th AGM on a
remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors.
The Company has received the prescribed certificate from the Auditors
regarding the appointment and the necessary consent for his appointment as Auditors. The
Auditors' Report to the shareholders for the year under review does not contain any
qualification, reservation or adverse remark.
II. Cost Auditor and Cost Audit Report
As per the requirement of Central Government and pursuant to Section
148 of the Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as
amended from time to time, your Company has required to maintain cost records and
accordingly, such accounts are made and records have been maintained relating to Textile
Divisions every year.
Pursuant to Section 148 of the Companies Act, 2013 the Board of
Directors on the recommendation of the Audit Committee, has appointed M/s. S. Hariharan
& Associates, Cost Accountants (Firm Registration No.100486) as the Cost Auditors for
the Financial Year 2023-2024 and has recommended their remuneration to the shareholders
for their ratification at the ensuing Annual General Meeting. M/s. S. Hariharan &
Associates, Cost Accountants have confirmed their appointment is within the prescribed
limits and also certified that they are free from any disqualification.
III. Secretarial Auditor and Secretarial Audit Report
The Board had appointed Mr. K. V. Chalama Reddy, Company Secretary in
Whole-time Practice (M. No. F9268), to carry out Secretarial Audit under the provisions of
Section 204 of the Companies Act, 2013 for the financial year 2023-2024. The report of the
Secretarial Auditor for the financial year 2023-2024 does not contain any qualifications,
reservation or adverse remarks and is annexed to this report as
ANNEXURE -3.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
Your Company has effective and adequate internal control systems in
place commensurate with the size and complexity of the organisation. Internal and
operational audit is carried by M/s. K. Vijaya Raghavan & Associates LLP, a reputed
firm of Chartered Accountants. The Internal Audit system is designed to meet the statutory
requirements as well as ensure proper implementation of management and accounting
controls. The internal auditors submit their report to the Managing Director and also to
the Audit Committee, which reviews the report and ensures that the Audit observations are
attended to by the Management.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company has Solar Power for 5 MW at its Amanagallu division to
promote alternative source of energy, information on conservation of energy, technology
absorption, foreign exchange earnings and out go, as required to be given pursuant to
provision of Section 134 of the Companies Act, 2013 read with the Companies (Accounts)
Rules, 2014 is annexed here to marked ANNEXURE-4 and forms part of this report.
DEPOSITS
The Company has not accepted any deposits from the public during the
year under review.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by the
Institute of Company Secretaries of India.
EMPLOYEES
Periodic Training programmes for developing a skilled workforce,
personality development programmes, yoga camps, etc., encouragement of employee
participation in district / state level sports events are regularly undertaken. An
integrated woman focused program trains unskilled women to undertake skilled jobs at its
units.
Disclosure pertaining to the remuneration and other details as required
under Section 134 & 197(12) of the Act, and the Rules framed thereunder is enclosed as
ANNEXURE-6 to the Board's Report.
ACKNOWLEDGEMENTS
The Board of Directors are pleased to place on record their
appreciation of the cooperation and support extended by Banks and various State and
Central Government Agencies. The Board also wishes to place on record its appreciation of
the valuable services rendered by the employees of the Company.
|