Your directors are pleased and privileged to present 38thAnnual Report together with the Audited Financial Statements of the Company for the year ended March 31, 2024.
FINANCIAL RESULTS
PARTICULARS |
2023-24 | 2022-23 |
| Gross Revenue from Operations | 30208.08 | 28734.33 |
| Net Revenue from Operations | 24533.22 | 23422.56 |
| Other Income | 151.23 | 121.74 |
| Profi t Before Depreciation, Interest and Tax (PBDIT) | 3329.00 | 3638.24 |
| Interest | 379.40 | 340.76 |
| Profi t Before Depreciation and Tax | 2949.60 | 3297.48 |
| Depreciation | 1291.97 | 1324.80 |
| Profi t before Exceptional Items | 1657.63 | 1972.69 |
| C S R | 32.06 | 54.98 |
| Extra-Ordinary Item | 0 | 0 |
| Profi t after CSR | 1625.57 | 1917.70 |
| Provision for Taxation | ||
| Current Year | 380.67 | 503.51 |
| Deferred Taxation | -16.09 | -54.21 |
| Net Profi t before Extra-Ordinary Item | 1260.98 | 1468.38 |
| Extra-Ordinary Item | 0 | |
| Net Profi t after Extra-Ordinary Item | 1260.98 | 1468.38 |
Note: Figures have been re-grouped wherever necessary to confi rm to current period classifi cation.
DIVIDEND
Your Director’s recommended dividend of Rs.2.00/- per equity share (20%) of face value of Rs.10/- each for the year ended March 31, 2024.
CREDIT RATING
During the Financial Year 2023-24, CRISIL awarded the following rating basing on Company fi nancial results and ongoing Debt: Long term Rating: CRISIL BBB+ /Stable Short term Rating: CRISILA2
Review of business operations:
The 2 & 3-wheeler I.C. engine segment of the automotive industry has continued to face signifi cant changes and challenges in 2023-24. Our e orts in the domestic market have resulted in slight growth, due to socio-economic and political challenges in key African markets, particularly Nigeria and Sudan. The situation in these regions impacted our business operations, and our major customer in Colombia faced setbacks, leading to a noticeable decline in exports. However, we mitigated these losses through strategic market diversifi cation by initiating business discussion with European and American market exporters and by strengthening our domestic market presence.
Your Company during the under review achieved Rs. 24533 Lakhs of net revenue out of which domestic Sales around Rs. 19867 Lakhs as against Rs. 17987 lakhs of FY 2022-23 an increase of 10.45%. Export Sales of Rs.4817 Lakhs as against Rs. 5557 Lakhs for the FY 2022-23 , decline to the extent of 13%.
The company’s focus on leveraging technology and maintaining high-quality standards has been crucial in navigating these dynamic market conditions. The post-pandemic economic recovery has also contributed to our steady growth. The Company also slightly improved the performance in after-market Sales by changing the strategies and to reach every corner of the Country. We have continued to invest in R&D, focusing on advancing technology and meeting stringent environmental standards, thereby positioning ourselves to better serve both domestic and international markets.
FUTURE PROSPECTUS:
Looking ahead, with favourable economic indicators, supportive government policies, and projected 7 percent GDP growth, India expects its auto components industry to perform well in FY25. SAMKRG, planning to expand its market reach by exploring business opportunities in Nepal and Kenya, as well as further developing our presence in Latin America and the Middle East. These regions o er signifi cant growth potential for 2-wheelers, and we aim to capture a substantial market share. Additionally, our Company planning to introduce new product lines, including valves, connecting rods, bearings, and fi lters, in a stepwise manner. This expansion is aimed at increasing our product bandwidth and o erings in both the Indian domestic aftermarket and the export aftermarket sectors.
By leveraging our extensive distribution network and strong OEM relationships, we are well-positioned to enhance our market presence. We are dedicated to continuous innovation, ensuring our products meet the latest environmental standards and customer expectations. Our proactive approach to market changes and industry trends will help secure sustainable growth and long-term profi tability for the company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013 with respect to the Directors’ Responsibility Statement, the Board of Directors of the Company hereby confi rms:
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 e ectively.
RISK MANAGEMENT COMMITTEE
Risk management committee consists of the following Directors:
1. |
Mr. S.Karunakar |
Chairman |
2. |
Mr. Pinninti Raghu Prakash Swamy |
Member |
3. |
Mr. K Kesavan |
Member |
RISK MANAGEMENT POLICY
The company has taken all the steps to mitigate the following risks:
Raw material prices: Ours is a continuous high volume manufacturing industry. Our profi tability will depend on change in the price in raw materials and input costs.
Foreign currency Risks: Exchange rate fl uctuations may sometimes e ect. Adequate steps were taken. Competition and Price Pressure: The Company is facing sti competition in the segments of OEMs and aftermarket as well as price pressure from the OEMs which playing major roll on the profi tability of the company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility committee consists of the following Directors:
| 1. | Mr. S Kishore | Chairman |
| 2. | Mr. PinnintiRaghu Prakash Swamy | Member |
| 3. | Mr. K Kesavan | Member |
Corporate social responsibility policy was adopted by the Board of Directors on the recommendation of corporate social responsibility committee.
Report on corporate social responsibility as per Rule 8 of Companies (Corporate Social Responsibility) Rules, 2014 is prepared and the same is enclosed as annexure -3.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6)
The Independent Directors have submitted the declaration of independence as required pursuant Sec. 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Sec. 149(6).
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of the following Directors:
| 1. | Mr. K.K Kesavan | Chairman |
| 2. | Ms. Rishita Nama | Member |
| 3. | Mr. S Kishore | Member |
Brief description of terms of reference:
• Identifying persons who are qualifi ed to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;
• Carry on the evaluation of every director’s performance;
• Formulation of the criteria for determining qualifi cations, positive attributes and independence of a director;
• Recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;
• Formulation of criteria for evaluation of independent Directors and the Board;
• Devising a policy on Board diversity; and
• Any other matter as the Board may decide from time to time.
Nomination and Remuneration policy The objective of the Policy:
1. To lay down criteria and terms and conditions with regard to identifying persons who are qualifi ed to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
2. To determine remuneration based on the Company’s size and fi nancial positions and trends and practices on remuneration prevailing in peer companies.
3. To carry our evaluation of the performance of Directors.
4. To provide them reward linked directly to their e ort, performance, dedication and achievement relating to the Company’s operations.
5. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
POLICIES ON APPOINTMENT OF DIRECTORS AND REMUNERATION
Your Company recognizes the importance and benefi ts of having the diverse Board to enhance quality of its performance and has adopted a Nomination and Remuneration Policy as formulated by the Board of Directors. The Company’s Nomination and Remuneration Policy has laid down a framework for remuneration of Directors (Executive and Non-Executive), Key Managerial Personnel and Senior Management Personnel.
These Policies are available on the Company’s website at thehttps://www.samkrgpistonsandrings.com
PERFORMANCE EVALUATION OF DIRECTORS AT BOARD AND INDEPENDENT DIRECTORS’ MEETINGS
Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various Committees for the fi nancial year 2023-24. The evaluation was conducted on the basis of a structured questionnaire which comprises performance criteria such as performance of duties and obligations, independence of judgement, level of engagement and participation, attendance of directors, their contribution in enhancing the Board’s overall e ectiveness, etc. The Board has expressed their satisfaction with the evaluation process. The observations made during the evaluation process were noted and based on the outcome of the evaluation and feedback of the Directors, the Board and the management agreed on various action points to be implemented in subsequent meetings. The observations included those relating to further improvement in participation and deliberations at the meetings and conduct of the meetings, circulation of board presentations and its content.
The independent directors met on 29.05.2024 without the presence of other directors or members of Management. All the independent directors were present at the meeting. In the meeting, the independent directors reviewed performance of non-independent directors, the Board as a whole and Chairman. They assessed the quality, quantity and timeliness of fl ow of information between the Company management and the Board.
FAMILIARIZATION PROGRAMME
Pursuant to Regulation 25(7) of the SEBI (LODR) Regulations, the Company has put in place a system to familiarize its Independent Directors about the Company, its fi nancial products, the industry and business model of the Company. In addition, the Company also updates on continuous basis to the Independent Directors about the ongoing events and developments relating to the Company, signifi cant changes in regulatory environment through the Board/ Committee meetings and separate familiarisation programme(s). Familiarization Programme details:
(i) |
No. of programs attended by Independent Director (during the year and on a cumulative basis till date) |
During the year |
1 |
Cumulative |
23 | ||
(ii) |
No. of hours spent by Independent Directors in such programs (during the year and on a cumulative basis till date) |
During the year |
1.30 |
Cumulative |
25 |
Pursuant to Regulation 46 of SEBI (LODR) Regulations the details of Familiarization Programme is uploaded on the Company’s website.
POLICY FOR PROHIBITION OF INSIDER TRADING
Vide notifi cation No. EBI/LAD-NRO/GN/2018/59 Securities and Exchange Board of India (SEBI) has notifi ed SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 with e ect from April 01, 2019. The Company has accordingly formulated and adopted Code for Fair Disclosure of Unpublished Price Sensitive Information. The said code is also available on the website of company. The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, Senior Management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under report, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations 2015.
The Company has also put in place requisite Structured Digital Database (SDD) system for the Designated Persons (DPs) to protect the confi dentiality of Unpublished Price Sensitive Information (UPSI) of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186:
The company has neither issued any Loans, guarantees nor made any investments during the fi nancial year 2023-24.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO Sec. 188(1)
All Related Party Transactions that were entered into during the Financial Year under review were on an arm’s length basis and in the ordinary course of business and are in compliance with the applicable provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015. During the year, the Company had not entered into any contract/arrangement/transaction with related parties in terms of Section 188 of the Companies Act, 2013 and hence, Form AOC-2 pursuant to the provisions of Section 134(3)(h) of the Companies Act, 2013 and rule 8(2) of the Companies Accounts) Rules, 2014 is not applicable and does not form part of this report. There were no materially signifi cant Related Party Transactions made by the Company during the year that required shareholders’ approval under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board may be accessed on the Company’s website at www.samkrgpistonsandrings. com There were no materially signifi cant related party transactions which could have potential confl ict with interest of the Company at large. The details of the Related Party Transactions are set out in the Notes to Financial Statements forming part of this Annual Report.
TRANSFER OF AMOUNTS TO RESERVES
The Company proposes to transfer an amount of Rs.126.10 lakhs to the general reserve for the fi nancial year ended 31stMarch, 2024.
LISTING OF EQUITY SHARES
The Company’s equity shares are listed on BSE Ltd., PJ Towers, Dalal Street, Mumbai 400001.
MEETINGS OF THE BOARD OF DIRECTORS
The details of the Board of Directors Meeting held were given in the Report on Corporate Governance under Item No. 2(b).
ANNUAL RETURN
The Annual Return is prepared in Form MGT-7 as per the provisions of the Companies Act, 2013 for all the previous years and the same is checked at https:// www.samkrgpistonsandrings.com
The conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Sec. 134(3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.
Information with respect to the conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Sec. 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is prepared and annexed as Annexure -2 to this report.
BOARD OF DIRECTORS AND CHANGES THEREIN DURING THE YEAR 2023-24
Shri S Monish(DIN: 10217575), Director of the Company, who is liable to retire by rotation at this Annual General Meeting and being eligible, according to his performance and upon recommendation of nomination and remuneration committee, seeks for his re-appointment at the ensuing AGM.
Shri K. Chaitanya Abhishek (DIN: 08221971), Non-Executive and Independent Director resigned with e ect from June 17, 2023 due to his personal reasons as stated by him in his resignation letter. At the 37th AGM dated September 28, 2023, Shri S Karunakar (DIN:01665760), Chairman and Managing Director of the company was appointed for 5 years till June 29, 2028 and Shri S Monish(DIN: 10217575) and Shri S Kishore (DIN: 01665768), Directors of the company was appointed as director liable to be retire by rotation.
Further, Shri K.K. Kesavan (DIN: 10243054) was appointed as Non-Executive and Independent Director for 5 years till June 29, 2028.
Changes after March 31, 2024
Mrs. Sirisha Ramaraju and Mrs. Nandiniy Vijay Kumar was appointed at the meeting of the Board of Directors held on dated August 12, 2024 as an Additional Director in the category of Non-Executive and Independent Director, not liable to retire ty rotation, for 5 years subject to further approval of members at the ensuing 38th Annual General Meeting of the Company.
DEPOSITS
The Company has not accepted any Deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Hence there are no details to be disclosed under Rule 8(5) (v) of the Companies (Accounts) Rules, 2014
AUDITORS Statutory Auditors
In accordance with Section 139 of the Companies Act, 2013 and the rules made there under, Shri M.V.N Murthy., Chartered Accountants, Hyderabad Chartered Accountants (ICAI Reg. No. 201445) was appointed as Statutory Auditors of the Company in the AGM held on September 28,2022 until the conclusion of the Annual General Meeting of the Company to be held in the calendar year 2027. They have confi rmed their eligibility and qualifi cation required under Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and the Rules framed there under for continuation as Auditors of the Company. The Independent Auditors’ Report for the fi nancial year ended March 31, 2024 on the fi nancial statements of the Company forms part of this Annual Report.
Ratifi cation of appointment of Statutory Auditors at every AGM has been dispensed with by the Ministry of Corporate A airs. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratifi cation of appointment of Statutory Auditors.
Auditors Report
There are no qualifi cations, reservations or adverse remarks made by Shri M.V.N Murthy., chartered
Accountants, Hyderabad Chartered Accountants (ICAI Reg. No.201445) Statutory Auditors in their report for the Financial Year ended March 31st 2024. Further, there was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or to the Board as required under Section 143(12) of the Act and the rules made thereunder.
Audit Committee
Composition of Audit Committee included in Corporate Governance report.
Corporate Governance
A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditor’s Certifi cate on its compliance.
VIGIL MECHANISM
The Board of Directors has adopted whistle Blower policy. The Whistle Blower policy aims for conducting the a airs in the fair and transparent manner by adopting highest standards of professionalism, honest, integrity and ethical behaviour. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the chairperson of the audit committee in exceptional case.
Secretarial Auditor
As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Shri V B S S Prasad, Practicing Company Secretary (C.P.No: 4605) as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2024.
Secretarial Audit Report issued by Shri V B S S Prasad, Practicing Company Secretary in form MR-3 is enclosed as Annexure - 4 to this Annual Report and there is no any qualifi cation, reservation adverse.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 Shri P Srinivas was appointed as Cost Auditor of the company for the fi nancial year 2023-24 and accordingly he carried out the cost audit and there is no any qualifi cation, reservation adverse.
MATERIAL ORDERS OF JUDICIAL BODIES /REGULATORS: During the year under review no any signifi cant or material orders were passed by the Regulators or Courts or Tribunals against the Company or its Directors which may impact the going concern status of the Company or its operations in future or the Directors of the Company in any manner.
LISTING AND DEMATERIALISATION:
The Equity Shares of the Company are listed on the BSE Limited. Shareholders are requested to convert their physical holdings to dematerialized form to derive its benefi ts by availing the demat facility provided by NSDL and CDSL.
CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS: As required under the Regulation 34 (2) of the SEBI (LODR) Regulations, 2015 a cash fl ow statement enclosed with the fi nancial statements is part of the Annual Report 2023 - 2024. Since, the Company has no subsidiary; the Consolidated Financial Statements of the Company for the fi nancial year 2023 - 2024 is not applicable.
PREVENTION OF INSIDER TRADING:
The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, Senior Management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under report, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations 2015.
The Company has also put in place requisite Structured Digital Database (SDD) system for the Designated Persons (DPs) to protect the confi dentiality of Unpublished Price Sensitive Information (UPSI) of the
Company.
RECONCILIATION OF SHARE CAPITAL AUDIT:
As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out by Shri VBSS Prasad, Practicing Company Secretary, during the fi nancial year 2023-24. COMPLIANCE WITH SECRETARIAL STANDARDS: The Company hereby a rm that during the year under review it has complied with all the applicable secretarial standards (including any modifi cations or amendments thereto) issued by the Institute of Company Secretaries of India.
PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL:
The Statement of particulars of Appointment and Remuneration of Managerial Personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as enclosed as per Annexure - 5 to this Annual Report.
INSURANCE
All properties and insurable interests of the Company including building, plant & machinery and stocks have been fully insured.
CHANGE IN NATURE OF BUSINESS
There is no change in the Company’s nature of business during the fi nancial year ended March 31st, 2024.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The company has well defi ned internal control systems and procedures for ensuring optimum utilization of various resources, Investment decisions involving Capital Expenditure or taken up only after due appraisal and review. Internal audit function covers and carried out periodically and reviewed by the Audit Committee to ensure that all policies and procedures are adhered to, and all statutory obligations complied with.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
No such orders have been received.
MATERIAL CHANGES AND COMMITMENTS
There are no Material changes and commitments in the business operations of the Company from the fi nancial year ended 31st March, 2024 to the date of signing of the Director’s Report.
POLICY ON SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and 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 (POSH) and the rules made thereunder. The Policy aims to provide protection to employees at workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. During the fi nancial year 2023-24, the Company received NO complaints on sexual harassment.
ACKNOWLEDGEMENTS
The Board of Directors would like to express their sincere thanks to the shareholders and investors of the Company for the trust reposed in the Company over the past several years. Your Directors would also like to thank the central government, state governments, fi nancial institutions, banks, customers, dealers and vendors for their co-operation and assistance. The Directors also place on record their appreciation made by the employees at all levels.
The Board would like to reiterate its commitment to continue to build the organisation into a world-class enterprise in all aspects
On behalf of the Board of Directors |
|
| Sd\- | |
SARIPALLI KARUNAKAR |
|
| Place: Hyderabad | CHAIRMAN & MANAGING DIRECTOR |
| Date: August 12, 2024 | DIN: 01665760 |
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