Dear Members,
Your Directors have pleasure in presenting the 33rd Annual Report together with audited
accounts of the Company for the year ended 31 March, 2023. st
| FINANCIAL RESULTS: |
|
(Rs. in Lakhs) |
|
2022-23 |
2021-22 |
| Profit before Depreciation |
(2128.58) |
10425.68 |
| Less: Depreciation |
2920.84 |
2817.61 |
| Less : Taxes |
(1566.45) |
2738.33 |
| Add/(Less) : Other Comprehensive Income |
66.93 |
(44.87) |
| Profit after Tax |
(3416.03) |
4824.87 |
| Dividend Paid |
389.05 |
- |
| Surplus brought forward from last year |
8686.68 |
3861.81 |
| Amount available for appropriation |
4881.59 |
8686.68 |
DIVIDEND
Your Directors have not recommended any dividend for the year 2022-23.
REVIEW OF OPERATIONS
During the cotton season October2021 to September22 the cotton prices witnessed a
continuously increasing trend which touched about Rs.1,05,000 per candy in April/May2022
as a result of which yarn & fabric prices were also increased frequently which
affected the Garment value chain significantly and created uncertainty in the market in FY
2021-22 and first quarter of FY 2022-23. In the meanwhile, Geo political tensions caused
by Russia-Ukraine war, tensions between China and Taiwan, Higher inflation which slowed
developed economies such as USA, Europe and Japan had adverse effect on the textile
industry as exports came down drastically. Though the cotton prices cooled down from the
second quarter onwards, due to poor demand for yarn and fabric, there was heavy pressure
on the prices resulting in goods produced from high priced cotton getting sold at lower
values. Hence the performance of the Company was severely affected during the year leading
to a loss of Rs.3416.03 lakhs.
The unit wise performance of the company is furnished below: Spinning Units
During the year under review, the Spinning mills produced 24047.71 tonnes (31280.87
tonnes) and sold 22464.67 tonnes (24514.68 tonnes) of Yarn.
The sales include 280.09 tonnes (5661.40 tonnes) by way of export. The total yarn sales
amounted to Rs.59,127.54 lakhs (Rs.73304.79 lakhs) of which export sales amounted to
Rs.1034.13 lakhs (Rs.17290.08 lakhs) constituting 1.75% (23.59%) of the total yarn sales.
The reduction in export sales is due to weak demand during the year on account of factors
mentioned in the previous paragraph.
The Spinning division produced 8818.71 tonnes (9811.24 tonnes) of saleable waste cotton
and sold 9084.04 tonnes (9631.36 tonnes) and the total waste cotton sales of this division
amounted to Rs.8377.18 lakhs (Rs. 5907.01 lakhs).
Weaving Unit
The Weaving Unit specializes in manufacturing wider-width cotton grey woven fabric.
During the year under review, 145.44 lakh metres (136.15 lakh metres) of fabric were
produced and 102.46 lakh metres (115.23 lakh metres) of fabric were sold.
The sales include 23.92 lakh metres (34.58 lakh metres) by way of export. The total
fabric sales amounted to Rs.10324.50 lakhs (Rs.13282.61 lakhs) of which export sales
amounted to Rs.3297.44 lakhs (Rs.4058.45 lakhs).
Home Textile Unit
During the year under review, the Home Textile Unit produced 38.28 lakh pieces (16.23
lakh Pieces) of made ups and sold 36.68 lakh pieces (15.82 lakh pieces) and made fabric
sales of 3.70 lakh metres (10.21 lakh metres) The total sales of this unit amounted to
Rs.5279.22 lakhs (Rs.5629.68 lakhs) which includes fabric sales amounting to Rs.128.78
lakhs (Rs.1496.77 lakhs).
Knitting Unit
During the year under review, 3284.30 tonnes (5351.33 tonnes) of Knitted fabric were
produced and 3190.96 tonnes (5370.21 tonnes) were sold. The total sales of this unit
amounted to Rs.10838.58 lakhs (Rs.17003.85 lakhs) of which export sales amounted to
Rs.626.89 lakhs (Rs.6354.81 lakhs).
Processing Unit
During the year under review, 1890.01 tonnes (2169.16 tonnes) of fabric were processed
on job work basis and 1240.20 tonnes (1329.72 tonnes) of fabric were produced and 1600.42
tonnes (1174.95 tonnes) of fabric were sold. The total fabric sales of this division
amounted to Rs.6807.03 lakhs (Rs.6561.92 lakhs).
Apparel Unit
During the year under review, 67.63 lakhs (34.94 lakhs) pieces of Garments were
produced on both own and job work basis. The total income of this division amounted to
Rs.4354.87 lakhs (Rs.605.31 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 337.51 Lakh units of power as against 351.45 Lakh units produced
in the last year.
PROSPECTS FOR THE FINANCIAL YEAR 2023-24
As mentioned earlier, though the prices of cotton have come down by more than 30% from
its peak levels, the demand scenario is still weak as export orders are quite low due to
recession like situation in developed economies. The bright spot is however domestic
demand which is robust and gives some comfort. 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.
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.
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 alongwith 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, 2023, 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 S V Arumugam has
been re-appointed as Managing Director of the Company with effect from 27.6.2023 subject
to the approval of Shareholders of the company at the board meeting held on 30.5.2023.
Necessary resolutions for the approval of the shareholders of the company is proposed at
the ensuing Annual General Meeting.
Sri K N V Ramani, one of the Independent Directors of our company had passed away on
30.3.2023. The Board wishes to place on record his valuable contributions made to the
company during his tenure of office since the year 2005. His valuable guidance and
advices, in general and in Legal Matters in particular over the period, have immensely
contributed to success of the company.
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 the following persons as its Key Managerial Personnel:
| Name of the persons |
Designation |
| Sri S V Arumugam DIN 00002458 |
Managing Director |
| Sri S Seshadri |
Chief Financial Officer |
| Sri N Krishnaraj ACS No. 20472 |
Company Secretary |
AUDIT COMMITTEE
The Audit Committee comprises of
| 1. Sri K N V Ramani |
Chairman (Non- Executive Independent Director) deceased on 30.3.2023 |
| 2. Sri S Palaniswami |
Member (Non- Executive Independent Director) appointed as Chairman of the Audit
Committee with effect from 19.4.2023 |
| 3. Sri K Sadhasivam |
Member (Non- Executive Independent Director) and |
| 4. Dr K R Thillainathan |
Member (Non- Executive Independent Director) appointed with effect from 19.4.2023 |
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 is 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. Further, 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, 5 (Five) 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 Corporate Guarantee furnished by the Company for an amount of Rs.135.61 Crores for
the credit facilities both term loan and working capital facilities, sanctioned by HDFC
Bank Limited to Young Brand Apparel Private Limited, a Subsidiary Company, has been waived
by the bank with effect from 20.1.2023. Investments and loans of the Company in the shares
of other companies is provided under the 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 Companys
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 arms 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 and Policy for Determination of
Material Subsidiary are 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 arms length transactions under third proviso
thereto
1. Details of contracts or arrangements or transactions not at arms length basis: Nil
2. Details of material contracts or arrangement or transactions at arms length basis:
Nil
The Company has borrowed Rs.17.00 Crores as Inter Corporate Deposits from Murugan
Enterprise Private Limited, one of the Promoter and holding company of the company. There
were no transactions 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 Companys 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
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 passed by the members at the Annual General Meeting held
on 26th 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 Auditors 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 2022-23. 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
2023 2024. 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 two subsidiaries as on 31.3.2023: i. Young Brand Apparel
Private Limited (also Joint Venture Company) ii. Bannari Amman Infinite Trendz Private
Limited (Formerly Bannari Amman Trendz Private Limited) In accordance with the Section 129
(3) of the Companies Act, 2013, the consolidated Financial Statements of the Company have
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 annexed
herewith as 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 31 March, 2023, relating to Conservation of
Energy, etc., is enclosed asst 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 31 March, 2023 is provided in st
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 been 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 2022-23 - Nil |
| b. No. of complaints disposed off during the financial year 2022-23 - Nil |
| c. No. of complaints pending as on end of financial year 2022-23 - 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.
|
By Order of the Board |
|
S V ARUMUGAM |
| Coimbatore |
Chairman & Managing Director |
| 30th May, 2023 |
DIN 00002458 |
+91-9892691696
