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You can view full text of the latest Director's Report for the company.

BSE: 543989ISIN: INE438K01021INDUSTRY: Textiles - Synthetic/Silk

BSE   ` 187.15   Open: 187.65   Today's Range 186.05
189.00
+0.55 (+ 0.29 %) Prev Close: 186.60 52 Week Range 168.40
311.40
Year End :2023-03 

The Board of Directors have immense pleasure in presenting the 15th Annual Report of your Company together with the Audited Accounts for the FY ended 31st March 2023.

1. FINANCIAL RESULTS:

(Rs. In Crores except EPS)

PARTICULARS

FY 2022-23

FY 2021-22

Revenue from Operations

1351.47

1129.32

Profit for the year before Exceptional Items, Depreciation & Taxation

174.57

108.11

Depreciation and Amortization expense

41.00

30.82

Profit before Exceptional Items & Taxation

133.57

77.29

Exceptional Items

0

0

Profit before Taxation (PBT)

133.57

77.29

Tax Expenses (including deferred tax)

35.98

19.60

Profit after Taxation (PAT)

97.59

57.69

Other Comprehensive Income

(0.92)

(0.02)

Total Comprehensive Income

96.67

57.67

Earnings Per Equity Share (in Rs.)

8.11

4.79

2. REVIEW OF PERFORMANCE & COMPANY'S STATE OF AFFAIRS:

Your company has successfully reported another year of good performance amidst volatile industry trends. For the FY ended 31st March, 2023, your Company reported an operating turnover of Rs.1351.47 Crores when compared to Rs. 1129.32 Crores for the FY 2021-22. Thus, registering a growth of 20 % (approx) year on year basis. The Profit Before Tax (PBT) for the FY 2022-23 at Rs. 133.57 Crores was a notable increase over the PBT for the FY 2021-22, which stood at Rs. 77.29 Crores. The said growth in terms of topline as well as bottom line has encouraged your management and the employees, that will go a long way in helping them achieve better landmarks in the coming years. After adjusting for taxes and deferred taxes, the PAT stood at Rs.97.59 Crores for the FY 2022-23 as against Rs. 57.69 Crores for the FY 2021-22.

During the FY 2022-23, your Company has opened the following new stores:

Sl. No.

Format

Store Location

1.

Kalamandir

Ameerpet, Hyderabad, Telangana

2.

Kalamandir

Patny, Hyderabad, Telangana

3.

Kalamandir Royale

Jubilee Hills, Hyderabad, Telangana

4.

Kanchipuram Varamahalakshmi

Anna Nagar, Chennai, Tamilnadu

5.

Valli Silks

Rajahmundry, Andhra Pradesh

6.

Kanchipuram Varamahalakshmi

Pondy Bazaar, Chennai, Tamilnadu

7.

Mandir

Khajaguda, Hyderabad, Telangana

8.

Kalamandir

Kammanahalli, Karnataka

Thus, as on the date of this Report, the total stores tally stands (under various formats) as hereunder:

Kalamandir

Mandir

Varamahalakshmi

Silks

KLM Fashion Mall

Total

12

4

19

19

54

All the new stores have recorded excellent performance, in terms of customer response and sales turnover.

Material changes affecting the financial position of the Company

As reported earlier, few of the significant events taken up during the FY 2022-23 are listed hereunder:

• resolved to undertake an IPO of its equity shares and list its shares on the Stock Exchanges. The Company has filed the Draft Red-Herring Prospectus (DRHP) with Securities and Exchange Board of India (SEBI) and obtained final observations in November 2022.

• resolved to set up an ESOP Scheme under the name and style “Sai Silks (Kalamandir) Limited Share Based Employee Benefit Scheme - 2022"

• sub-division of the nominal value of equity shares from Rs.10 per share to Rs.2 per share.

• Business Assets Transfer Agreement ("BTA")

Our Company entered into a Business Assets Transfer Agreement (“BTA") dated April 1, 2022 with Sai Retail India Limited, (SRIL). Pursuant to which, inter alia, SRIL decided to discontinue its apparel business and sell its business assets relating to its apparel business, including the inventory to our Company, on an arms-length basis. In terms of the BTA, SRIL has agreed to certain non-compete provisions restricting it from undertaking a business substantially similar to, or competing with, the business of our Company, and has transferred to our Company all the current and fixed assets for its apparel business including, lease improvements, furnitures, rental deposits, inventory and employees' salary advances for a consideration that was based on the prevailing market price, and aggregated to ^ 2,129.06 million. Further, our Company has also absorbed employees of SRIL to the extent they were responsible for purchase and other operations of SRIL's apparel business, and on terms of service no less favourable than those which such employees enjoyed immediately prior to the March 31 2022, the cut-off date as envisaged under the BTA.

• Search and seizure of operations in the premises was conducted in May 2023, by income tax department under section 132 of Income Tax Act,1961. Information and documents have been submitted to income tax department as per information called from time to time. Scrutiny proceedings are in progress and as on date neither income tax demand determined nor levied consequent to such operations.

Further, save and except as discussed in this report, there have been no material changes affecting the financial position of the Company between the end of the financial year and date of this report.

3. TRANSFER TO RESERVES:

We do not propose any amount to be transferred to the Reserves for the current Financial Year.

4. NATURE OF BUSINESS

There has been no change in the nature of business of your Company during the under review and the company continues to carry on its existing business operations.

5. DIVIDEND:

As discussed elsewhere in this Report, your Company has been constantly expanding its operations and reach by opening new stores under different formats. Further, as mentioned earlier, the Company is also proposing to undertake an IPO of its equity shares. In view of the said proposals having a long term bearing on the funds flow of the Company, the Board of Directors felt it prudent not to recommend any dividend for the financial year ended 31st March, 2023.

Your company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the stakeholders of the company. The Policy sets out various financial, internal and external factors, which shall be considered by the Board in determining the dividend pay-out. The policy is available on the website of the company i.e., https://sskl.co.in/wp-content/uploads/2022/07/Dividend-Distribution-Policy-SSKL.pdf

6. SHARE CAPITAL:

The Share Capital of the Company as on 31.03.2023, and also as on date of this Report, stands as follows:

Sl. No.

Particulars

(Amt. in Rs.)

1.

Authorised Capital:

21,00,00,000 Equity Shares of Rs.2/- each

42,00,00,000

2.

Issued, Subscribed & Paid-up capital:

12,63,39,085 Equity Shares of Rs.2/- each

25,26,78,170

Total Equity Capital

25,26,78,170

During the year under review, the following changes have occurred in the share capital of the Company. • Sub-division of the nominal value of equity shares from Rs.10 per share to Rs.2 per share

Pursuant to the resolution passed by the board at its meeting held on 03rd May, 2022 and the shareholders in their Extra-Ordinary General Meeting held on 18th May, 2022, the company has split face value of its equity shares, i.e., from Rs. 10/- per equity share to Rs. 2 /- per equity share. Accordingly, the authorized share capital of the company stands amended from Rs. 42,00,00,000 comprising 4,20,00,000 equity shares of Rs. 10/- each to Rs. 42,00,00,000 comprising 21,00,00,000 equity shares of Rs. 2 /- each.

Allotment of shares to SSKL Employees Trust.

During the year under review, the Company has issued and allotted 60,16,145 equity shares of face value of Rs.2 /- each at a price of Rs.22 /- (including a premium of Rs.20 /-) to SSKL Employees Trust.

Taking into consideration, the aforesaid sub-division and the allotment of shares to the Trust, the paid up share capital of the company stands at Rs.25,26,78,170 comprising of 12,63,39,085 equity shares face value Rs. 2/- each.

7. ESOP

As you are aware, your Company, during the FY 2022-23 has instituted an ESOP Scheme for the enduring benefits to its employees, under the name and style Sai Silks (Kalamandir) Limited Share based employee Scheme -2022. A Trust under the name and style “SSKL Employees Trust" has also been formed in this regard. The Company, under the said Scheme may grant an aggregate number of up to 6,016,145 employee stock options, in one or more tranches. The purpose of the ESOP Scheme is, among other things, to: (a) motivate the employees to contribute to the growth and profitability of our Company; (b) achieve sustainable growth and to create value to the Shareholders by aligning the interests of the employees with the long-term interests of our Company; and (c) incentivize the senior and critical talents in line with corporate growth and creation of Shareholders' value. Pursuant to the said Scheme, your Company, during the FY 2022-23 has issued and allotted 60,16,145 equity shares of face value Rs.2 /- each at a price of Rs.22 /- (including a premium of Rs.20 /-) to SSKL Employees Trust. There are no options granted pursuant to the ESOP Scheme as of the date of this Report.

8. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the FY 2022-23, the following changes took place in the offices of directors / Key Managerial Personnel of the company:

1. Mr. Doodeswara Kanaka Durgarao Chalavadi (DIN: 02689280) retired by rotation in the previous AGM held on 30.09.2022 and was reappointed thereat.

2. Mr. Kunisetty Venkata Ramakrishna was appointed to the office of Non-executive Independent Director of the Company effective 04.06.2022.

3. Mr. Naveen Nandigam and Mr. Laxmi Nivas Jaju resigned from their respective office of independent director effective 03.05.2022.

Apart from the aforesaid, there was no change in the office of Director / KMPs of the Company during the FY 2022-23.

Further, in accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Kalyan Srinivas Annam (DIN: 02428313), Whole Time Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for reappointment.

Further, resolution proposing reappointment of Ms. Sirisha Chintapalli (DIN 08407008) to the office of Independent Director forms part of notice of the ensuing AGM.

In the opinion of the Board, all the Independent Directors of your Company (existing and proposed) possess integrity, experience, expertise, and the requisite proficiency required under all applicable laws and the policies of your Company. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, all the Independent Directors of your Company have got their names included in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

Further, the Board of Directors have reappointed the following managerial personnel to their respective office of Managing Director / Whole Time Directors of the Company, subject to the approval of members in their AGM, as detailed hereunder:

Sl. No.

Name

Designation

Period of reappointment

1.

Mr. Nagakanaka Durga Prasad Chalavadi

Managing Director

3 years

(01.04.2024 to 31.03.2027)

2.

Mr. Kalyan Srinivas Annam

Whole Time Director

3 years

(01.04.2024 to 31.03.2027)

3.

Mr. Durgarao Doodeswara Kanaka Chalavadi

Whole Time Director

3 years

(01.04.2024 to 31.03.2027)

Respective resolutions seeking approval of members form part of notice of the ensuing AGM.

9. BOARD MEETINGS:

The Board met 8 times during the Financial Year 2022-23 on the following dates:

03.05.2022, 28.05.2022, 04.06.2022, 15.06.2022, 14.07.2022 (adjourned and held on 15.07.2022), 21.07.2022,

19.09.2022 and 30.12.2022 (adjourned and held on 06.01.2023)

The intervening gap between any two consecutive Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013.

The names of members of the Board and their attendance at the Board Meetings are as under:

Name of the Director

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Mr. Nagakanaka Durga Prasad Chalavadi

8/8

Mr. Kalyan Srinivas Annam

8/8

Mr. Doodeswara Kanaka DurgaRao Chalavadi

7/8

Mr. Ravindra Vikram Mamidipudi

8/8

Mr. Pramod Kasat

8/8

Mr. Kunisetty Venkata Ramakrishna

5/5 (Appointed w.e.f 04.06.2022)

Ms. Sirisha Chinthapalli

7/8

Notes:

• Mr. Naveen Nandigam and Mr. Laxmi Nivas Jaju resigned from the Board effective 03.05.2022.

10. COMMITTEES' COMPOSITION & MEETINGS:

COMMITTEES' COMPOSITION

As on the date of this Report, the composition of various Committees stands as hereunder:

Name of the Committee

Members

Audit Committee

- Mr. Ravindra Vikram Mamidipudi - Chairman

- Mr. Pramod Kasat - Member

- Mr. Kunisetty Venkata Ramakrishna- Member

- Mr. Nagakanaka Durga Prasad Chalavadi1

- Ms. Sirisha Chintapalli- Member#

Nomination and Remuneration Committee

- Mr. Kunisetty Venkata Ramakrishna - Chairman

- Mr. Pramod Kasat - Member

- Mr. Ravindra Vikram Mamidipudi - Member

- Ms. Sirisha Chintapalli - Member

Stakeholders' Relationship Committee

- Ms. Sirisha Chintapalli - Chairperson

- Mr. Kalyan Srinivas Annam - Member

- Mr. Nagakanaka Durga Prasad Chalavadi - Member

Executive Management & IPO Committee

- Mr. Nagakanaka Durga Prasad Chalavadi- Chairman

- Mr. Doodeswara Kanaka Durgarao Chalavadi - Member

- Mr. Kalyan Srinivas Annam - Member

Corporate Social Responsibility Committee

- Mr. Ravindra Vikram Mamidipudi - Chairman

- Mr. Nagakanaka Durga Prasad Chalavadi - Member

- Mr. Kalyan Srinivas Annam - Member

Risk Management Committee

- Mr. NagakanakaDurga Prasad Chalavadi- Chairman

- Mr. Doodeswara Kanaka Durgarao Chalavadi - Member

- Mr. Kalyan Srinivas Annam - Member

- Mr. Ravindra Vikram Mamidipudi - Member

- Mr. Venkata Lakshmi Narasimha Sarma Konduri- Member

COMMITTEE MEETINGS:

A. Audit Committee:

The Committee met 4 times during the financial year under review i.e., on 28.05.2022, 15.06.2022,

04.10.2022 and 30.12.2022

Attendance:

Name of the Member

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Mr. Mamidipudi Ravindra Vikram- Chairman

4/4

Mr. Pramod Kasat

4/4

*Mr. Nagakanaka Durga Prasad Chalavadi

4/4

Mr. Kunisetty Venkata Ramakrishna

@ 3/3

@ He was entitled to attend only 3 meetings, since he appointed to the committee w.e.f 04.06.2022 upon reconstitution of the said committee by the Board.

*Mr. Nagakanaka Durga Prasad Chalavadi was resigned w.e.f 13.07.2023

B. Nomination and Remuneration Committee:

The Committee met 2 times during the financial year under review i.e., on 04.06.2022 & 09.06.2022 Attendance:

Name of the Member

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Mr. Kunisetty Venkata Ramakrishna- Chairman

@1/1

Mr. Mamidipudi Ravindra Vikram

2/2

Ms. Sirisha Chintapalli

2/2

Mr. Pramod Kasat

2/2

@ He was entitled to attend only 1 meeting, since he appointed to the committee w.e.f 04.06.2022 upon reconstitution of the said committee by the Board.

C. Stakeholders Relationship Committee

The Committee met 1 time during the financial year under review i.e., on 19.09.2022

Attendance :

Name of the Member

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Ms. Sirisha Chintapalli- Chairperson

1/1

Mr. Nagakanaka Durga Prasad Chalavadi

1/1

Mr. Kalyan Srinivas Annam

1/1

D. Corporate Social Responsibility Committee

The Committee met once during the financial year under review i.e., on 28.05.2022 Attendance:

Name of the Member

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Mr. Ravindra Vikram Mamidipudi - Chairman

1/1

Mr. Kalyan Srinivas Annam

1/1

Mr. NagakanakaDurga Prasad Chalavadi

1/1

E. Risk Management Committee

The Committee met 2 times during the financial year under review i.e., on 19.09.2022 & 30.12.2022 Attendance:

Name of the Member

Number of Meetings attended/ Total Meetings held during the F.Y. 2022-23

Mr. Nagakanaka Durga Prasad Chalavadi

2/2

Mr. Doodeswara Kanaka Durgarao Chalavadi

2/2

Mr. Kalyan Srinivas Annam

2/2

Mr. Mamidipudi Ravindra Vikram

2/2

Mr. KVLN Sarma

2/2

11. BOARD EVALUATION. NOMINATION AND REMUNERATION POLICY:

Based on the recommendations made by the Nomination and Remuneration Committee, the Company has in place a Policy for performance evaluation of the Board and the Committees as a whole and that of the Individual Directors, which include criteria for determining qualifications, positive attributes and independence of Directors, with a structured questionnaire covering various aspects of the Board.

Besides, the Company also surveys on the best practices prevalent in the Industry with respect to evaluation of the performance of the Board and its members. The Company also avails services of professionals seeking their suggestions on the said matter. Based on the inputs received from the aforesaid sources and in accordance with the Policy of the Company, the evaluation process is undertaken at appropriate time(s).

The following policies of the Company are attached herewith and marked as Annexure VI, VII, respectively:

a) Policy on appointment of Directors & Board Diversity

b) Remuneration Policy for Directors, Key Managerial Personnel, and the Senior Management employees

The Board evaluated the performance of Managing Director / Whole Time Directors at the time of their reappointments.

12. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received respective declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their existing status as independent directors of your Company.

In compliance with Schedule IV to the Companies Act, 2013 the Independent Directors held their meeting on

30.12.2022 without the presence of non-independent directors and members of the management, inter alia, to discuss the following:

o Noting the report of performance evaluation of the Board from the Chairman of the Board; o Review of the performance of non-independent directors and the Board; o Review of the performance of the Chairman of the Company;

o Assessment of the quality, quantity and timeliness of flow of information to the Board;

All the Independent Directors were present at the aforesaid meeting.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134 (3) (c) and Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) it has 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) it has 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) it has prepared the annual accounts on a going concern basis;

(e) it has laid down internal financial controls to be followed by the company and such internal financial controls are adequate and were operating effectively;

(f) it has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. CORPORATE GOVERNANCE:

As stated elsewhere, your Company is in the process of undertaking IPO of its equity shares and eventually get its shares listed on the Stock Exchanges. In view of the said, it has complied with the provisions of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 (Listing Regulations), to the extent feasible and applicable. Pursuant to the said, a Report on Corporate Governance for the financial year 2022-23 is enclosed as Annexure - V

A certificate from the Managing Director and the CFO of the Company in terms of Listing Regulations, inter alia, confirming the correctness of the financial statement including cash flow statement, etc., forms part of the Annual Report.

15. AUDITORS:

a) STATUTORY AUDITORS

The Shareholders in their 13th AGM held on 30th November, 2021 appointed M/s. Sagar & Associates (Regd No. FRN 003510S), Chartered Accountants, Hyderabad as statutory auditors of the company to hold the office as such till the conclusion of 18th Annual General Meeting i.e., for a period of 5 consecutive financial years. The Statutory Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

Auditors observation(s)

The Notes on Financial Statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation, adverse remark or disclaimer.

Further the matter pertaining to search and seizure of operations as mentioned under “Emphasis of matter" in the Auditor report is self-explanatory and do not call for any further comments.

b) INTERNAL AUDITOR

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Rules made thereunder, the Company has appointed M/s SARC & Associates (Regd No.006085N), Chartered Accountants, Visakapatnam to the office of Internal Auditor of the Company for the FY 2022-23, in place of M/s. LVNS Sumanth & Associates.

c) SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s P. S Rao & Associates, Company Secretaries have been appointed as Secretarial Auditors to conduct Secretarial Audit for the FY ended 31st March, 2023. Copy of Secretarial Audit Report is attached herewith as Annexure-IV

d) COST RECORDS:

It is hereby confirmed that the maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 and hence accounts and records related thereto are not required to be made or maintained.

16. FIXED DEPOSITS:

The Company has neither accepted nor repaid any deposits during the financial year ended on 31.03.2023. Further, there were no outstanding deposits as at the beginning of the FY or at any time during the financial year 2022-23. Hence, no details are required to be provided pursuant to Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules, 2014.

Further, the Company has not borrowed any unsecured loans from its Directors during the FY ended 31st March, 2023 and there were no amounts (unsecured loans ) outstanding as on 31st March, 2023.

17. SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES:

The Company does not have any Subsidiary or Joint venture or Associate Company as on the closure of the financial year under report and even as on the date. Further no Company has become or ceased to be the Subsidiary or Joint venture or Associate of your Company during the financial year.

18. CORPORATE SOCIAL RESPONSIBILITY:

Your Board of Directors and the CSR committee feel proud to mention that we have been undertaking CSR activities as a part and parcel of our life, whether mandated by law or otherwise. It has been a wholehearted endeavor on our part to do our bit to the society we live in. As far as FY 2022-23 is concerned your company has undertaken the activities in the areas of Child education, Scholarships, food to the poor people and welfare of challenged people and health care either on its own or in association with KALAMANDIR FOUNDATION.

The Board has adopted a CSR policy, pursuant to the recommendation of the CSR committee, with a vision to actively contribute to the social and economic development of the communities in which your company operates and in doing so, build a better, sustainable way of life for the weaker sections of the society.

The Annual Report on CSR activities as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as ‘Annexure - III to this report. The CSR Policy is posted on the website of the Company and the web link is https://sskl.co.in/wp-content/uploads/2022/07/CSR-Policy.pdf

The CSR Committee, constituted by the Board, is in place and is actively involved in identifying areas as per the contemporary needs of the society. While identifying such areas, it ensures that the same are commensurate with the Company's Policy in general. Further, the Committee also supervises the progress of CSR activities of the Company.

The composition of the CSR Committee has been already disclosed elsewhere in this Report.

Simultaneously KALAMANDIR FOUNDATION, the CSR arm of your Company is also actively involved in furthering the cause of CSR for your Company.

Pursuant to the provisions of Section 135 of the Companies Act, 2013, your Company was required to spend an amount of Rs.95.38 lakhs towards CSR Activities for the financial year 31st March, 2023. However, your Company's total expenditure towards CSR aggregated to Rs.102.82 Lakhs for the year ended 31st March, 2023, thus exceeding its obligation. Out of the said amount of Rs.102.82 Lakhs, your Company spent Rs. 34.18 Lakhs through Kalamandir Foundation and Rs.68.64 lakhs was spent by the Company on its own.

Further, as reported earlier, your Company had taken up an ongoing project during FY 2020-21 and earmarked an amount of Rs. 76.17 Lakhs towards the said project. Out of said project cost, the Company had already spent Rs.50 lacs during FY 2021-22. The balance amount of Rs.26.17 lacs has been spent during the FY 2022-23, thus completing the project obligation.

19. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required under Section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure -1 and forms part of this report.

20. ANNUAL RETURN:

In accordance with section 134(3)(a) of the Companies Act 2013, a copy of Annual Return in the prescribed format i.e., Form MGT-7 along with attachments is placed on the website of the Company, https://sskl.co.in/wp-content/uploads/2023/07/Annual-Return-2022-23.pdf

21. RELATED PARTY TRANSACTIONS:

The Company has not entered into any related party transaction, which are not at arm's length basis during the FY ended 31st March, 2023.

During the FY 2023, all the contracts/arrangements/ transactions entered in to by the Company with the related parties were in the ordinary course of business and on arm's length basis and were in compliance with the provisions of the Companies Act. The details of related party transactions, which were entered into during the previous year / current year are provided at Note No.45 which form part of the notes to financial statements.

As per clause (h) of Section 134 (3) of the Companies Act, 2013, the particulars of related party transactions, (which were entered into pursuant to existing contracts as well as fresh contracts) as referred to in Section 188 (1) of the Companies Act, 2013 have been disclosed in Form No. AOC - 2 which is appended as Annexure - II to this Report.

Further your company has a policy on Related Party Transactions which can be accessed at https://sskl.co.in/wp-content/uploads/2022/07/Policv-On-Related-Partv-Transactions.pdf

22. LOANS. GUARANTEES AND INVESTMENTS:

During the year under review, the Company has not made any loans, investment or given any guarantee or provided any security as contemplated under Section 186 of the Companies Act, 2013.

23. INTERNAL FINANCIAL CONTROL:

The Company has laid down internal financial controls through entity level controls inter-alia to ensure orderly and efficient conduct of business, including adherence to Company's policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safe guarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls was done through the internal audit process, established within the Company and also through appointing professional firm to carry out such tests by way of systematic internal audit program. Based on the review of the reported evaluations, the directors confirm that, for the preparation of financial accounts for the year ended March 31, 2023 the applicable Accounting Standards have been followed and the internal financial controls are generally found to be adequate and were operating effectively and that no material weakness were noticed.

24. RISK MANAGEMENT POLICY:

The Company has in place a Risk Management Policy, aimed at a) embed the management of risk as an integral part of our business processes; b) establish an effective system of risk identification, analysis, evaluation and treatment within all areas and all levels of the Company; c) avoid exposure to significant financial loss; d) contribute to the achievement of the Company's objectives; and e) assess the benefits and costs of implementation of available options and controls to manage risk.

Further Risk management policy is also available on the company website at https://sskl.co.in/wp-content/uploads/2022/07/Risk-Management-Policy.pdf.

25. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The company has in place a Vigil mechanism / whistle blower policy in terms of section 177(9) of the Companies Act, 2013 which enables employees, officers and stakeholders to freely convey their concerns about illegal or unethical practices. No person has been denied access to the chairman of the Audit Committee to lodge their grievances. The Vigil mechanism / whistle blower policy is also available on the company's website https://sskl.co.in/wp-content/uploads/2022/07/Vigil-Mechanism-Policy.pdf

Mr. Ravindra Vikram Mamidipudi, Independent Director and chairman of the Audit committee is the Head of the Vigil Mechanism; all the employees have direct access to report their concerns and complaints. During the year under the review, no complaint has been received.

The details of the vigil mechanism are provided in the Annexure - VIII to this Report.

26. POLICY ON PREVENTION. PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:

Your Company strongly supports the rights of all its employees to work in a harassment - free environment. The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The policy aims to provide protection to Employees at the 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. The Company has also constituted an Internal Complaints Committee, known as Anti Sexual Harassment Committee to address the concerns and complaints of sexual harassment and to recommend appropriate action.

The composition of said committee may be referred at Report on Corporate Governance attached herewith.

We further confirm that during the year under review, there were no cases or complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

27. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no orders passed by the Regulators / Courts / Tribunals that would impact the going concern status of your Company and its future operations. Further, it is confirmed that there were no instances of fraud to be reported by the Auditors under sub-section (12) of section 143 vide their Report for the FY 2022-23.

28. INSOLVENCY AND BANKRUPTCY CODE, 2016 & STATUS THEREOF

During the year under review, neither any application was made nor any proceeding stands pending under the Insolvency and Bankruptcy Code, 2016, as on 31st March, 2023.

29. DETAILS OF DIFFERENCE BETWEEN THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH REASONS THEREOF

Not applicable (As there were no instances of one-time settlement with the Banks or financial institutions during the year under review)

30. SECRETARIAL STANDARDS:

The Company has complied with the applicable clauses of the Secretarial Standards (SS-1 and SS-2) issued by The Institute of Company Secretaries of India.

31. ACKNOWLEDGEMENTS:

Your Board members extend their hearty appreciation for the sustained co-operation and support by the Banks, Government authorities, Business Partners, Weavers and Suppliers, Customers and other Stakeholders and more importantly the employees of the Company, who have provided their unflinching support during the tough times of the Company.

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Mr. Nagakanaka Durga Prasad Chalavadi was resigned w.e.f 13.07.2023 #Ms. Sirisha Chintapalli was appointed w.e.f 13.07.2023