As on: Dec 09, 2024 04:47 PM
Your directors are pleased to present the 42nd Annual Report on the operational and business performance of the Company together with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended March 31, 2024.
Financial Performance
The summarized financial performances for the Financial Year ended March 31, 2024, are as under:
Performance review and the state of Company's affairs:
The company's consolidated total income for the year 2023-24 is H1537 Crores down by 7.63% over the previous financial year and the standalone total income for the year 2023-24 is H1,531 Crores down by 7.66% over the previous financial year.
The Company has experienced drop in revenue during the financial year under review due to general economic slowdown and lower global demand. The drop in revenue is significant in textile business and to some extent in building product segments also. Lower volumes in textile and building products due to general slowdown in the economy and cashflow issues across the market also contributed to lower turnover. The company's performance is impacted due to continued rise in raw material costs since last accounting year 2022-23 due to Russia and Ukraine war. The higher interest rates due
to inflation across the globe, higher depreciation on the new units which were setup during past two years also impacted the profitability during the year.
The Company made standalone profit after tax of H2.53 Crores during the current financial year compared to H54.79 Crores in the previous financial year. The company is expecting to have a significant growth in the coming years as it is foreseeing good economic indicators with good monsoons in the coming year. The company has aggressively expanded during the last two years by setting up an additional production line of cement roofing business and two fibre cement board units along with one Panel unit to take advantage of economies in logistic and operational costs.
The Company's other key performance indicators are as under:
Cash Profit during the current year is H61 crores as compared to H105 crores in the previous year.
The capital expenditure for FY 2023-24 was H118 crores, major part was towards V Next Boards project at Midnapore, West Bengal state.
CAPITAL
During the financial year under review there is no change in the capital structure of the Company other than the sub-division of face value of shares from H10/- (Rupees Ten ) to H2/- (Rupees Two).
DIVIDEND
The Board of Directors of the Company, in their meeting held on May 15, 2024 had recommended a Final Dividend of H0.50/-(Fifty paise only) (i.e., 25%) per Equity Share of H2/- (Rupees Two) each fully paid-up share of the Company, for the Financial Year 2023-24.
The Final dividend, if approved at the 42nd Annual General Meeting (AGM), will be paid to all eligible members within thirty days from the conclusion of the ensuing Annual General Meeting of members of the Company.
TRANSFER TO RESERVES
For the financial year ended March 31, 2024, the company has not proposed to transfer any amount to the general reserve
SUBSIDIARY COMPANIES
The Company has two subsidiaries, i.e., Visaka Green Private Limited (earlier named Vnext Solutions Private Limited) and Atum Life Private Limited as on March 31, 2024.
Visaka Green Private Limited was setup to capitalise on the expertise gained in the various applications of its products. viz., EPC contracts, Turnkey solutions, construction of Infil houses with Atum Solar panels, V-Boards, V-Panels and Infil material.
Atum Life Private Limited was formed to deal with the sustainable and eco-friendly products. The Company had set up sustainable studios to deal with various range of sustainable products including the holding company's sustainable products. The Company has put up Atum charging stations which provides clean energy to consumers. ATUM Charge is India's First Green EV charging stations, and it is powered by our own ATUM Solar roofing. The Company aims for Zero emissions, net zero facilities and sustainable network.
The Statement containing salient features of the financials of Subsidiaries / associate companies / joint ventures (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) in form AOC-1 is annexed as Annexure-1.
In terms of Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the company and all its subsidiaries prepared in accordance with Ind AS 110 and 111 as specified in the Companies (Indian Accounting Standards) Rules, 2015, forming part of this annual report. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements and related information of the company and its financial subsidiaries, available on the company's website:(please refer page no. - 121) .These are also available for inspection during regular business hours at our corporate office in Hyderabad, India.
Management Discussion and Analysis Report Global economy
Overview: Global growth declined from 3.5 percent in 2022 to 3.0 percent in 2023. Asia is expected to contribute significantly to global growth in 2023-24, despite the weaker-than-expected recovery in China, sustained weakness in USA, rising energy costs in Europe, weak global consumer sentiment due to the Ukraine-Russia war and the Red Sea crisis resulting in increased logistics costs. A tightening monetary policy translated into increased policy rates and interest rates for new loans.
Growth in advanced economies is estimated to decline from 2.6% in 2022 to 1.5% in 2023 and further, 1.4% in 2024 as policy tightening takes effect. Emerging market and developing countries are projected to report a modest decline in economic growth from 4.1% in 2022 to 4.0% in 2023 and 2024. Global inflation is projected to decline steadily from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024 on account of a tighter monetary policy coupled with relatively lower international commodity prices. Core inflation is expected to decrease gradually, as inflation is not expected to return to its target until 2025 in most cases. The US Federal Reserve approved a much-anticipated interest rate hike raising the benchmark borrowing costs to their highest in over 22 years.
Global trade in goods was expected to have decreased by an approximate US$2 trillion in 2023; trade in services increased by an estimated US$500 billion. The average cost of Brent crude oil in 2023 stood at US$83 per barrel, a downturn as compared to US$101 per barrel in 2022. This decrease comes on account of Russia finding crude oil destinations outside the European Union and global crude oil demand falling short of expectations.
Global equity markets ended 2023 on a strong note, with major global equity benchmarks achieving double-digit returns. This outperformance was driven by a downturn in global inflation, slide in the dollar index, declining crude prices and higher expectations of rate cuts by the US Fed and other Central banks.
Performance of major economies, 2023 United States: Reported GDP growth of 2.5% in 2023 compared to 1.9% in 2022
China: GDP growth was 5.2% in 2023 compared to 3% in 2022
United Kingdom: GDP grew by 0.1% in 2023 compared to 4.3% in 2022
Japan: GDP grew 1.9% in 2023 unchanged from a preliminary 1.9% in 2022
Germany: GDP contracted by 0.3% in 2023 compared to 1.8% in 2022
(Source: PWC report, EY report, IMF data, OECD data, Livemint)
Outlook: Asia is poised to continue leading global growth in 2024-25. Inflation is expected to ease gradually as cost pressures decreases; headline inflation in G20 countries is projected to decline. Amid high inflation and monetary tightening, the global economy has shown resilience as the growth is expected to be stabilised at previous levels over next two years (Source: World Bank)).
Indian economy
Overview: The Indian economy was estimated to grow 8.2 per cent in 2023-24 as against 7.2% in 2022-23 primarily driven by improved performance in the mining and quarrying, manufacturing and certain segments of the services sector. India has maintained its position as the fifth largest economy in the world. The Indian rupee displayed relative resilience compared to the previous year; the rupee opened at H82.18 against the US dollar on the first trading day of 2023-24 and closed at H83.34 versus the greenback on the last trading day of the year under review, an appreciation of 1.41%.
In the 11 months of 2023-24, the CPI inflation experienced an average of 5.4% with rural inflation exceeding urban inflation. Food inflation experienced a spike on account of lower production and erratic weather. Core inflation, on the other hand, averaged at 4.5%, down from 6.2% in 2022-23, moderated by softening global commodity prices.
India's foreign exchange reserves reached a historic peak of US$651.5 billion. The credit quality of Indian
companies remained robust from October 2023 to March 2024 on account of deleveraged Balance Sheets, sustained domestic demand and government-led capital expenditure. Rating upgrades continued to surpass rating downgrades in the second half of 2023-24. UPI transactions in India witnessed a record 56% growth in volume and 43% growth in value in 2023-24.
Growth of the Indian economy
Growth of the Indian economy quarter by quarter, 2023-24
(Source: Budget FY24; Economy Projections, RBI projections, Deccan Herald)
India's monsoon in 2023 hit a five-year low, with August marking the driest month in a century. Despite receiving only 94% of its long-term average rainfall from June to September, wheat production estimatedly recorded 114 million tonnes in the 2023-24 crop year due to higher coverage. Rice production was anticipated to decrease to reach 106 million metric tons (MMT) in comparison to 132 million metric tonnes in the previous year. Total kharif pulses produced in 2023-24 stood at an estimated 71.18 lakh metric tonnes, which is lower than 202223 due to climatic conditions. As per the first advance estimates of national income released by the National Statistical Office (NSO), the manufacturing sector output is projected to have grown 6.5% in 2023-24 compared to 1.3% in 2022-23. The Indian mining sector experienced an estimated growth of 8.1% in 2023-24 compared to 4.1% in 2022-23. Financial services, real estate and professional services grew a projected 8.9% in 2023-24 compared to 7.1% in 2022-23.
Real GDP or GDP at constant prices increased from to H160.71 lakh crore in 2022-23 (provisional GDP estimate released on 31 May 2023) to an estimated H173.82 lakh crore in 2023-24. Growth in real GDP during 2023-24 stood at 8.2% compared to 7.2% in 2022-23. Nominal GDP or GDP at current prices was estimated at H295.36 lakh crore in 2023-24 as compared to the provisional 202223 GDP estimate of H269.50 lakh crore. The gross nonperforming asset ratio for scheduled commercial banks improved from 4.1% as of March 2023 to 2.8% as of March 2024.
India's exports of goods and services were expected to reach US$900 billion in 2023-24 compared to US$770 billion in the previous year despite global headwinds. Merchandise exports were expected to expand between
US$495 billion and US$500 billion, while services exports were expected to touch US$400 billion during the year. India's net direct tax collection increased 17.7% to H19.58 lakh crore in 2023-24. Gross GST collection amounted to H20.2 lakh crore, marking an 11.7% increase, with an average monthly collection of H1,68,000 crore, surpassing the previous year's average of H1,50,000 crore.
The agriculture sector projectedly grew 1.8% in 2023-24, which is lower than the 4% expansion recorded in 202223. Trade, hotel, transport, communication and services related to broadcasting segment are estimated to grow at 6.3% in 2023-24, a contraction from 14% in 2022-23. The Indian automobile segment was expected to close 202324 with a growth of 6-9%, despite global supply chain disruptions and rising ownership costs. The construction sector was expected to grow 10.7% year-on-year from 10% in 2023-24. Public administration, defence and other services were projected to grow by 7.7% in 2023-24 as against 7.2% in 2022-23. The growth in gross value added (GVA) at basic prices was pegged at 6.9%, down from 7% in 2022-23.
India entered a pivotal phase in its S-curve, marked by rapid urbanisation, industrialisation, increase in household incomes and rising energy consumption. The country emerged as the fifth largest economy with a GDP of US$3.6 trillion and nominal per capita income of H123,945 in 2023-24.
In 2023-24, India's Nifty 50 index experienced a 30% growth, propelling India's stock market to become the fourth largest globally with a market capitalisation of US$4 trillion. Foreign investment in Indian government bonds saw a significant increase in the final quarter of year 2023. India ranked 63rd out of 190 economies in the ease of doing business, according to the latest World Bank annual ratings. Moreover, India's unemployment rate decreased to 3.2% in the year 2023, down from 6.1% in 2018.
Outlook: India successfully tackled its global economic challenges in the year 2023 and is poised to continue as the world's fastest-growing major economy backed by a growing demand, moderate inflation, stable interest rates and robust foreign exchange reserves. The Indian economy is anticipated to surpass US$4 trillion in 2024-25.
Union Budget 2024-25
The Interim Union Budget 2024-25 continued to prioritise capital expenditure spending, comprising investments in infrastructure, solar energy, tourism, medical ecosystem and technology. In 2024-25, the top 13 ministries in terms of allocations accounted for 54% of the estimated total expenditure. Of these, the Ministry of Defence received the highest allocation at H6,21,541 crore, constituting 13% of the total budgeted expenditure of the
central government. Other ministries with high allocation included Road transport and highways (5.8%), Railways (5.4%) and Consumer Affairs, food and public distribution (4.5%). (Source: Times News Network, Economic Times, Business Standard, Times of India).
Construction and building materials industry review
The global construction materials market size was estimated at US$1,320.01 billion in 2023 and is forecasted to grow from 1,369.86 billion in the year 2024 to US$1,867.16 billion by the year 2032, growing at a CAGR of 3.9% during the time span. This growth is accounted by the overall development of the construction industry, rise in infrastructure spending and growing demand for residential apartments.
The Indian construction materials recorded a growth of 8% to reach US$240 billion in 2023, post a 10% growth in the year 2022. This steady market growth is driven by ongoing infrastructure development, urbanisation and various government initiatives, implementation of new technologies, emphasis on materials and increasing demand for affordable housing and industrial spaces have influenced the market dynamics of construction materials.
The Central government increased capital outlay on infrastructure development by a third to a record H10 lakh crore in the 2023-24, comprising 3.3% of the GDP. While the allocation towards road construction was raised to H2.7 lakh crore, the outlay was additionally increased for building tracks, reviving 50 additional airports, heliports and advance landing grounds to enhance regional air connectivity. Overall, India has set an ambitious aim of spending H143 lakh crore to develop infrastructure over seven fiscal years through 2030, double of the H63 lakh crore spent in the previous seven years starting 2017, catalysing the market for building materials.
Outlook
The construction materials industry in the country is poised for a transformative phase marked by innovation and advancements. Furthermore, the nation is on track to witness expected and unexpected trends to come up with more eco-friendly and cost-effective solutions that will address the evolving and rising demands. The partnership among the industry players and government support to research and development will further contribute to the pivotal tasks to carve a future where Indian construction materials align with global goals as well as India's growing requirements in infrastructure sector.
(Source: Economic Times, homes India magazine.com, Equipment Times, Global News Wire, Fortune Business Insights)
Growth drivers
Infrastructure outlay: The Government increased its capital expenditure on infrastructure investment by 11.1% to H11.11 lakh crore for 2024-25. This is expected to catalyse the growth in construction and building materials sector.
Growing urbanisation: By the year 2030, India's urban population could reach 600 million people, a little less than twice the size of America's population. This is likely to catalyse housing demand growth and drive the building materials segment.
Population: India emerged as the most populous country surpassing China. The country's population is expected to grow sustainably, catalysing housing offtake.
Increased middle-class : The size of India's middle-class is expected to nearly double to 61% of its total population by 2047. The growing middle-class population is expected to drive the demand for housing.
Rising disposable income: According to Euromonitor International's Economies and Consumers data, the disposable income of Indians recorded a 10.5% CAGR over the period from year 2018-2023. The growth in disposable income is expected to catalyse housing demand.
Increased foreign investment: India attracted record FDI inflows of US$70.95 billion in 2023-24 and FDI equity inflows of US$71 billion, catalysing the demand for new construction.
Preference for green buildings: The construction industry is undergoing a significant shift due to technological advancements and a growing inclination towards eco-friendly buildings. This evolution in building practices is driving a surge in the need for sustainable construction materials.
(Source: Bank Bazaar, InvestIndia)
Government initiatives
¦ The Government decided to continue the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivise complementary policy actions with a significantly enhanced outlay of H1.3 lakh crore.
¦ 100 critical transport infrastructure projects for last and first mile connectivity for ports, coal, steel, fertiliser and food grains sectors have been identified and will be taken up on priority with investment of H75,000 crore (US$9 billion) including H15,000 crore (US$1.8 billion) from private sources.
¦ An Urban Infrastructure Development Fund is expected to be established through the use of priority sector lending shortfall, which will be managed
by the National Housing Bank and used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.
¦ The Awas Yojana budget estimate for the 202324 constitutes an allocation of H25,103 crore (US$3 billion) to Pradhan Mantri Awas Yojana-Urban and H54,487 crore (US$6.5 billion) to Pradhan Mantri Awas Yojana-Gramin.
¦ States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for promotion and sale of their own ODOPs (one district, one product).
¦ The Government of India announced the Atmanirbhar Bharat Abhiyan package of H20 lakh crore in May 2020, which included the Pradhan Mantri Garib Kalyan Yojana (PMGKY) relief package of H1.70 lakh crore for the poor to overcome the difficulties brought by lockdown. The Atmanirbhar Bharat scheme is expected to boost domestic industries, micro, small and medium enterprises (MSMEs) propelling the demand of real estate market.
¦ The budget for Atal Mission for Rejuvenation and Urban Transformation (AMRUT) has been set at H50,000 crore for five years, accompanied by Smart City allocations of H48,000 crore for the housing sector development.
¦ The Smart Cities Mission received a budgetary allocation of H2,236 crores in 2024-25.
(Source: The Secretariat, The Wire, Fincash, Economic Times)
Fibre cement products market review
The Indian fiber cement market is expected to reach US$4.2 million by 2027 growing at a CAGR of 6.7% during 2022-2027 on account of increased building activities across the nation. Fiber cement boards and sheets are composite building and construction materials primarily used in roofing and facade products due to their strength and durability.
The demand for fiber cement boards and sheets is further driven by stringent regulations against the use of nonsustainable products in construction due to the health risks associated with its use across India. Furthermore, the growing demand for energy efficient buildings is boosting the growth of the market. However, the threat from substitutes like vinyl and wood siding is expected to stagger the growth of the fiber cement boards market in India.
South India dominated the Indian fiber cement market share with more than 32.9% followed by North India. India witnessed significant foreign investment in both
residential and non-residential markets, creating new possibilities for fiber cement industry stakeholders in both residential and commercial building landscapes. Besides, clients in the area are aware of the possible dangers of using asbestos cement as a building and construction material and regulatory bodies are urging end-users to resort to substitutes that are more durable and environmentally sustainable. This has caused a transformation around the country from standard cement to fiber cement.
Indian textiles industry review
The Indian textiles and apparels industry with a market size of US$197.2 billion in the year 2023, anticipated to reach US$592.7 billlion in 2032 at a CAGR of 12.6%. The nation accounts for 24% of the global spindle capacity and 8% of the rotor capacity.
India's textile and apparel trade accounts for 4% globally, contributing 2.3% to the nation's GDP, 13% to industrial production and 12% to exports. The textiles sector is the second-largest employer employing 45 million people, constituting 13% of India's industrial production. The industry is highly dependent on cotton, representing over 60% of total fiber consumption.
India is the second largest country in terms of yarnspinning capacity in the world after China, accounting for around 20% of the world's spindle capacity. Furthermore, the nation ranks as the third largest producer of cotton, accounting for 15% of the global cotton crop.
The country's textile exports stood at the third position globally at US$37.11 billion, behind China (US$176 billion) and Germany (US$38.99 billion).
(Source: reogma.com, Imarc Group)
Economical: The emphasis has shifted towards utilising low-cost fibers in clothing production due to the rising importance of cost competitiveness.
Demand-supply gap in cotton: The global demand for fibers continues to grow, driven by a rising world population and increased consumer prosperity in developing countries. However, despite this escalating demand, the supply of cotton which is essential in meeting these fiber needsis not keeping pace. The reduction in land allocated to cotton cultivation is a consequence of competing interests for land use, such as the cultivation of other lucrative cash crops, food crops, as well as the expansion of industrial and urban areas.
Increased consumer trends: There is a growing focus on fitness, hygiene and brand awareness, all driven by rapidly evolving fashion preferences. This shift has led
to the prominence of sportswear, performance wear and athleisure as dominant categories in the market.
Recyclable: Synthetic fibers can be blended with materials such as cotton and spandex to meet specific performance needs. Recycled polyester has now earned a well-deserved reputation as an eco-friendly choice in the world of textiles.
¦ The government approved setting up of Seven Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA) parks in greenfield/brownfield sites with an outlay of H4,445 crore for a period of seven years upto 2027-28.
¦ The government approved a production-linked incentive scheme for textiles, with an approved outlay of H10,683 crore to promote the production of man-made fibre apparel, man-made fibre fabrics and technical textile products.
¦ The government allocated an outlay of H1,480 crore for the National Technical Textiles Mission to promote and develop the technical textiles sector in India.
¦ The government implemented programmes like SAMARTH for capacity building in textile sector, National Handloom Development Programme, Raw Material Supply Scheme, National Handicraft Development Programme, Comprehensive handicrafts cluster development scheme, and Integrated Wool Development Programme, among others, to promote the indigenous textile sector.
India solar energy sector
In 2023-24, India achieved a remarkable milestone by increasing its renewable energy capacity to 18.48 GW, registering a growth of more than 21% compared to 15.27 GW in 2022-23.
However, industry experts suggest India could add at least 50 GW each year for the next six years for India to achieve its ambitious goal of 500 GW by 2030. Besides, the MNRE also targets bidding of nearly 50 GW of renewable energy projects per annum to meet its ambitious 500 GW target.
As on 31 March 2024, the country's installed renewable energy capacity, excluding large hydropower projects, reached 143.64 GW. However, including the hydro projects, the total capacity for renewable energy in the country surged to an approximate 190 GW. To achieve the 500 GW target, India needs to add 310 GW within the next six years, an average of 50 GW per year.
Solar energy stands as the leader in the renewable energy sector, with a total installed capacity of 81.81 GW. India
installed 1.7 GW of rooftop solar capacity in 2023, the second highest annual installation in a calendar year for the country. Coming to solar rooftops, the segment's cumulative capacity stood at 10.5 GW by the end of 2023.
The capacity addition increased by as much as 3.7% as many commercial and industrial consumers held off on new projects while waiting for solar module prices to stabilise. Lower module prices in 2024 are expected to have helped companies reduce their project costs.
The residential segment stood as the primary growth driver for solar rooftop additions for the calendar year, accounting for more than 50% of the capacity added. Moreover, the rooftop solar system costs declined 10% quarter-on-quarter and 21.6% year-on-year in Q4, 2023.
During the April 2023 to February 2024 period, the country's cell and module imports stood at H41,920 crore, higher than H18,093 crore in 2023-24. This rise in imports during the financial year ending 31 March 2024, can be attributed to the relaxation in ALMM norms for a year.
India achieved a record-breaking annual installation of solar open access, making an addition of 3.2 GW in the calendar year 2023, a marginal rise from 3 GW installed from the previous year. An approximate 292 GW of solar capacity is expected to be deployed by 2030. This makes solar photovoltaic management crucial. The country's solar capacity rise from 81.81 GW in 2024 to 292 GW in 2030 is expected to be followed by a six-fold rise in solar waste, increasing from 1,00,000 tonnes in 2024 to 600,000 tonnes in 2030.
(Source: MNRE, Ornate Solar, ICRA, Live Mint, Mercom India, Economic Times)
Environmental shift: A global shift is being witnessed from the conventional sources of energy to renewable sources on account of growing environment concerns and imperative for low carbon emissions. India's increased focus on renewable energy, especially solar power, is expected to be a key driver for the sector and result in a rise in demand for solar power in the market.
Declining cost: A gradual decrease has been witnessed in the renewable energy prices in the country. Furthermore, the Indian government is providing tax incentives to users, minimising the installation costs, resulting in final cost reduction of solar energy. As a result, solar power
stands as a tough competitor to fossil fuels such as coal- based power in the country.
Robust investment: India received an investment of US$3.8 billion in foreign direct investment (FDI) in the solar energy sector over the past three financial years (FY21-FY23) and the first half of 2023-24. This rise in FDI showcases the trust of the investors in India's solar energy sector, resulting in growth of solar power in the nation.
(Source: Economic Times, DataReportal, MNRE)
Policy support
¦ The Government of India allocated H12,850 crore to the Ministry of New and Renewable Energy as part of the Union Budget 2024-25 as against H10,222 crore in the previous year.
¦ Budgetary estimates for the central sector scheme on grid-based solar power have increased more than 2x from its revised estimates of nearly H4,757 crore in 2023-24 to H10,000 crore in 2024-25.
¦ The rooftop solar programme of the central government will enable 10 million households to obtain upto 300 units of free electricity every month. This initiative is expected to save households upto H15,000-H18,000 annually, both from free solar electricity and selling surplus energy to distribution companies.
¦ Organising skill development programmes to build a proficient workforce capable of executing, operating and maintaining renewable energy projects.
¦ The Central government has implemented a number of measures for the promotion of solar energy. This includes waiving ISTS charges for renewable energy projects commissioned by 30 June 2025.
¦ A trajectory for renewable purchase obligation upto 2030 has been declared, and ultra-mega renewable energy parks have been established to provide land and transmission to renewable energy developers.
¦ Numerous groundbreaking schemes were launched by India for the solar energy sector, including PM- KUSUM, solar rooftops phase-II 12,000-MW CPSU scheme phase-II, and a production-linked incentive scheme for higher efficiency solar PV models over the past three years.
(Source: Economic Times, Downtoearth.org)
Financial overview
Analysis of the profit and loss statement
Revenues: Revenue from operations reported a reduction of 7.65% from H1,647 crores in 2022-23 to H1,521 crores in 2023-24. Other income of the Company accounted for 0.71% share of the Company's revenues reflecting the Company's dependence on its core business operations.
Expenses: Total expenses of the Company reduced 3.54% from H1,583 crores in 2022-23 to H1527 crores in 2023-24 due to lower production. Employee expenses accounting for 8.72% of the Company's revenues and decreased by 4.85% from H140.34 crores in 2022-23 to H133.53 crores in 2023-24.
Analysis of the Balance Sheet Sources of funds
¦ The capital employed by the Company increased by 10.76% from H1,217 crore as on 31 March 2023 to H1,348 crore as on 31 March 2024.
¦ The net worth of the Company reduced from H772.90 crore as on 31 March 2023 to H755.67 crores as on 31 March 2024 owing to decrease in reserves and surpluses. The Company's equity share capital remained at H17.28 crore (8.64 crore equity shares of H2/- each as compared to 1.73 crore equity shares of H10/- each in the previous year due to change in face value of shares from H10/- to H2/- during the year)
¦ Long-term debt of the Company increased to H207 crores as on 31 March 2024. The long-term debt- equity ratio of the Company stood at 0.27 in 2023-24 as compared to 0.21 in 2022-23.
¦ Finance costs of the Company increased from H22.33 crores in 2022-23 to H36.33 crores in 2023-24 following the increase in borrowings for expansion of capacities and also due to increase in working capital requirements. The Company's interest cover stood at 2.72 in 2023-24 compared to 6.58 in 2022-23.
Applications of funds
Fixed assets (gross) of the Company increased by 20% from H881 crores as on 31 March 2023 to H1,061 crores as on 31 March 2024 due to addition of new units.
Other Non-Current Assets
Other non-Current Assets of the Company reduced from H73.38 crore as on 31 March 2023 to H26.09 crore as on 31 March 2024 due to conversion of capital advances to Fixed assets.
Working capital management
¦ Current assets of the Company increased from H634.23 crore as on 31 March 2023 to H684.88 crore as on 31 March 2024. The current and quick ratios of the Company stood at 1.33 and 0.34, respectively in 2023-24 compared to 1.51 and 0.46 respectively in 2022-23.
¦ Inventories including raw materials, work-inprogress and finished goods among others increased by 11.76% from H380.57 crore as on 31 March 2023 to H425.32 crore as on 31 March 2024. The inventory cycle days increased from 75 days of turnover equivalent in 2022-23 to 97 days of turnover equivalent in 2023-24.
¦ Trade receivables increased by 2.11% from H143.40 crore as on 31 March 2023 to H146.43 crore as on 31 March 2024. More than 99% of the receivables are considered good. The Company debtor turnover cycle is 33 days due to lower turnover during 2023-24 compared to 30 days in 2022-23.
¦ Cash and bank balances of the Company increased from H31.39 crore as on 31 March 2023 to H38.88 crore as on 31 March 2024.
¦ Loans and advances (other than capital advances) made by the Company decreased by 20% from H65 crore as on 31st march 2023 to H52 crore as on 31st march 2024 on account of recovery of Loans and advances.
Margins
The EBIDTA margin of the Company decreased by 245 basis points from 8.96% in FY2022-23 to 6.51% in FY 2023-24, while the net profit margin of the Company decreased by 317 basis points
FY 2022-23
Internal financial control systems and their adequacy
The Company's internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with and pending issues are addressed promptly. The audit committee reviews reports presented by the internal auditors on a routine basis. The committee makes note of the audit observations and takes corrective actions wherever necessary. It maintains constant dialogue with statutory and internal auditors to ensure that internal control systems are operating effectively. Based on its evaluation (as provided under Section 177 of the Companies Act, 2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as on 31st March, 2024, the Internal Financial Controls were adequate and operating effectively.
M / s. Price Waterhouse & Co. Chartered Accountants LLP, the Statutory Auditors of the Company audited the financial statements included in this Annual Report and issued a report on the internal controls over financial reporting (as defined in Section 143 of the Companies Act, 2013).
Human resources
The Company believes that its dedicated and motivated employees are its greatest asset. The Company till now has offered competitive compensations, healthy work environment and the employee performances are recognized through a planned reward and recognition programme. The Company intends to develop a workplace where every employee can recognize and attain his or her true power. The Company motivates individuals to undertake voluntary projects apart from their scope of work that help them to learn and nurture creative thinking. The Company's permanent employee strength stood at 1945 as on 31st March, 2024
Cautionary statement
The statement made in this section describes the Company's objectives, projections, expectation and estimations which may be 'forward looking statements' within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.
Fixed Deposits
During the year under review, your Company has accepted Rs1.59 crores as public deposits and repaid H1.74 crores upon maturity making the outstanding as on March 31, 2024 to H13.09 Crores. In this regard, it is further stated that:
a) There were no matured deposits lying unpaid or unclaimed at the end of the financial year i.e. March 31, 2024
b) There has been no default in repayment of deposits or payment of interest thereon during the year.
c) There are no deposits lying with the Company which are not in compliance with the requirements of Chapter V of the Companies Act 2013 (Act) and
d) As provided under the Act, the outstanding deposits accepted under the provisions of previous Act have been repaid and squared off fully.
T ransfer of Unpaid / Unclaimed Dividend and Shares to Investor Education and Protection Fund (IEPF)
As per the provisions of section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereto ("the Rules"), all shares in respect of which dividends have not been paid or claimed for seven consecutive years or more shall be transferred to Investor Education and Protection Fund (IEPF). In line with the aforesaid provisions, unclaimed dividends (interim and final) declared for the FY 2015-16 along with the underlying shares on which the dividend remained unclaimed for seven consecutive years have been transferred to IEPF during the year.
The List of shareholders whose dividends / shares have been transferred to IEPF is available on the website of the company at :
https://visaka.co/investors/iepf shares 2023 24
Banks and financial institutions
Your Company is prompt in making the payment of interest and repayment of loans to the financial institutions / banks. Banks and Financial Institutions continue their unstinted support in all aspects and the Board records its appreciation for the same.
Corporate social responsibility
Your Company, as a responsible Corporate Citizen has spent an amount of H266.18 Lakhs towards CSR activities as against minimum amount i.e., H261.55 Lakhs during the financial year 2023-24 under the CSR activities as contemplated under Schedule VII of the Companies Act, 2013 and CSR policy adopted by the Company.
A report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as Annexure-2.
CSR policy of the Company may be accessed on the Company's website.
Directors and Key Managerial Personnel
As on March 31, 2024, Smt. G. Saroja Vivekanand (DIN: 00012994) , Managing Director, Shri. G. Vamsi Krishna (DIN: 03544943), Joint Managing Director, Shri. J.PRao (DIN: 03575950), Whole-time Director, Shri. S.Shafiulla, President & CFO and Shri. Ramakanth Kunapuli, AVP & Company Secretary are Key Managerial personnel of the Company pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014.
Shri.G. Vamsi Krishna, Joint Managing Director (DIN- 03544943) is liable to retire by rotation at the ensuing annual general meeting and being eligible, offers himself for reappointment. Shri. G. Vamsi Krishna, Joint Managing Director is holding 6,08,650 Equity shares of H2/- (Rupees Two) each of the Company. He is a director on the Board of Atum Batteries Private Limited, Svaroshni Private Limited, Karido Private Limited, V-Solar roofings Private Limited, Visaka Green Private Limited, Atumobile Private Limited, Atum Life Private Limited.
The Independent Directors have submitted requisite declaration of independence, pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 read with sub rule (1) and (2) of Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014 as amended.
During the year under review, Shri. Gusti Jall Noria (DIN: 00015561) , Director ceased to be an Independent director upon completion of his term with effect from March 31, .2024.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company state that:
a) In the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures and the annual accounts have been prepared in compliance with the provisions of the Companies Act, 2013.
b) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent 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 of the company for the said period.
c) They have 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) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls in the Company that are adequate and are operating effectively and
f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and operating effectively.
Corporate Governance
Pursuant to the provisions of Chapter IV read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate issued by the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report.
Statutory Auditors and Auditors' Report
M / s. Price Waterhouse & Co., Chartered Accountants LLP (FRN 304026E / E300009), Hyderabad who were appointed as statutory auditors of the Company to hold the office from the conclusion of the 40th annual general meeting till the conclusion of 45th annual general meeting to be held in the year 2027 audited the books of the Company for the financial year 2023-24 and submitted their report(s) (both standalone and consolidated) and the said report(s); does not contain any modifications or adverse remarks.
Internal Auditors
The company has a full-time in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. Internal Auditor reports to the Audit Committee and the Managing Director / Joint Managing Director about the adequacy and effectiveness of the internal control systems of the company as well as the periodical results of its review of the company's operations as per an approved internal audit plan duly approved by the Audit Committee.
The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures are presented periodically to the Audit Committee.
During the financial year under review, Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be provided under section 134(3)(ca) of the Act.
Cost audit:
In terms of the Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records pertaining to building products division and textile products division.
M/s. Sagar & Associates, Cost Accountants (Firm Regn. No. 000118) Hyderabad, Practicing Cost Accountants were re-appointed as Cost Accountants of the Company for conducting the cost audit for the financial year 202324 at a remuneration of H1,65,000/- (exclusive of out-ofpocket expenses and applicable taxes) and the same was ratified by you at the 41st Annual General Meeting of the Company.
The Board after considering the recommendations of its Audit Committee, reappointed the aforesaid firm as cost auditors for the financial year 2024-25 and appropriate resolution in this connection has been included in the notice convening the ensuing annual general meeting of the Company for ratification of remuneration of the Cost Auditors. Cost audit report for the financial year ended March 31, 2023, was filed with the Central Government on August 31, 2023. Cost auditors have certified that their appointment is with in the limits prescribed under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified to undertake the Cost Audit assignment with in the provisions of the Act.
During the year under review Cost Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be provided under section 134(3)(ca) of the Act.
Secretarial audit:
Your Board has appointed M/s. GMR & Associates, Practicing Company Secretaries, (Membership No. 8463 & CP No. 7911) Hyderabad as Secretarial Auditors of the Company for the financial year 2023-24 to conduct secretarial audit.
The Secretarial Auditor M / s. GMR & Associates, Hyderabad appointed by the Board conducted the secretarial audit and issued report in FORM MR-3 which is enclosed as Annexure-3.
In accordance with the SEBI Circular dated February 8, 2019 and additional affirmations required under Circulars issued by NSE and BSE dated March 16, 2023 and April 10, 2023 read with Regulation 24A of the SEBI Listing Regulations, the Company has obtained an Annual Secretarial Compliance Report from M / s. GMR & Associates, Practising Company Secretaries, confirming compliances with all applicable SEBI Regulations, Circulars and Guidelines for the year ended March 31, 2024.
M / s. GMR & Associates, Practising Company Secretaries, Hyderabad has issued a certificate confirming that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of companies by SEBI / MCA
or any such statutory authority. The said Certificate is annexed to the Report on Corporate Governance
The report of the Secretarial Auditors for the financial year 2023-24 is a clean report and does not contain any qualifications or adverse remarks.
During the year under review Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be provided under section134(3)(ca) of the Act.
Criteria for identification, appointment, remuneration and evaluation of performance of Directors
Your Company constituted Nomination and Remuneration Committee (hereinafter referred to as "the NRC Committee"), to oversee, inter-alia, matters relating to:
a) Identify persons who are qualified to become directors and persons who can be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
b) Formulate the criteria for determining qualifications, positive attributes and independence of director(s).
c) Recommend to the Board a policy relating to the remuneration for the directors, key managerial personnel and other senior management employees.
d) Carry out evaluation of every director's performance including that of Independent Directors and
e) Devise a policy to be followed for identification, appointment, remuneration and evaluation of performance of directors including Company's Board diversity etc., as approved by the Board.
The criteria for appointment, qualifications and positive attributes along with remuneration policy as applicable to Directors, KMPs and other Senior management personnel and the criteria to be followed for performance evaluation of each director including Independent Directors of the Company is enclosed as Annexure-4.
Formal annual evaluation made by the Board of its own performance, its committees and of individual directors.
Your Company believes that it is the collective effectiveness of the Board that impacts the Company's performance and thus the primary evaluation platform is that of collective performance of the Board.
The parameters for evaluation of Board's performance, as laid under evaluation criteria adopted by the Company,
have been derived from the Board's core role of trusteeship to protect and enhance shareholder's value as well as fulfil expectations of other stakeholders through strategic supervision of the Company.
The said criteria also contemplate evaluation of Directors based on their performance as directors apart from their specific role as independent, non-executive and executive directors as mentioned below:
a. Every director will be evaluated on discharging their duties and responsibilities as enshrined under various statutes and regulatory facet, participation in discussions and deliberations in achieving an optimum balance between the interest of company's business and its stakeholders.
b. Executive Directors will also be evaluated based on targets / criteria given to Executive Directors by the Board from time to time in addition to their terms of appointment.
c. Independent Directors will also be evaluated on discharging their obligations in connection with their independence criteria as well as adherence with the requirements of professional conduct, roles, functions, and duties, specifically applicable to Independent Directors as contained in Schedule IV to the Companies Act, 2013.
The criteria also specifies that the Board would evaluate each committee's performance based on the mandate on which the committee has been constituted and the contributions made by each member of the said committee in effective discharge of the responsibilities.
The Board of Directors of your Company has made annual evaluation of its performance, its committees and directors for the financial year 2023-24 based on aforesaid criteria.
Particulars of loans, guarantees or investments.
Details of investments made by the Company, are given in the notes to the financial statements (Please refer Note Nos. 5 & 6.1). During the year under review, your Company did not give or provide any other loans or guarantees, security or made any investments as covered under Section 186 of the Companies Act, 2013, other than as disclosed above.
Related party transactions
Related party transactions entered during the financial year under review are disclosed in the note no. 41 of notes to the financial statements of the Company for the financial year ended March 31, 2024. These transactions were entered at an arm's length basis and in the ordinary course of business.
There were no materially significant related party transactions with the Company's promoters, directors, management, or their relatives, which could have had a potential conflict with the interests of the Company. Statement in Form AOC-2, containing details of aforesaid related party transactions is enclosed as Annexure-5.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at https://visaka.co/assets/website/files/investors/Related- Party-Transactions-Policy.pdf
Risk Management
The Company has established enterprise Risk Management process to manage risks with the objective of maximizing shareholders value.
The Board of Directors of the Company has formed a Risk Management Committee to implement and monitor the risk management Policy of the Company. During the year under review, Risk Management Committee and the Board have periodically reviewed various elements of the risks and steps that were taken to mitigate the same. The development and implementation of the risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report.
Other disclosures Board Meetings:
During the year under review, the Board met seven times i.e., on April 1, 2023, May 19,2023, May 26,2023, August 9, 2023, November 7,2023, February 12, 2024, and March 30, 2024.Details viz., members of the Board and their attendance etc., are given in report on Corporate Governance which forms part of this Annual Report.
Audit Committee:
As on March 31, 2024, the Audit Committee comprises of four directors i.e., three Independent Directors viz., Smt. Vanitha Datla (Chairperson), Shri Gusti J. Noria, Shri P. Srikar Reddy and Smt. G Saroja Vivekanand, Managing Director as members. All the recommendations made by the Audit Committee were accepted by the Board.
The Chairperson of the Audit Committee has attended 41st Annual General Meeting.
Compliance with Secretarial Standards
The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:
Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure-6.
Annual Return
As required under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Amendment Rules, 2020, Annual Return for the financial year 2023-24 is available on the Company's website at https://visaka.co/assets/website/files/investors/Annual- Returns-MGT-2023-24.pdf
Remuneration of Directors, Key Managerial Personnel, Employees:
Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-7. In terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the top ten employees in terms of the remuneration drawn as set out in said rules forms part of this annual report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, this annual report, excluding the aforesaid information, is being sent to the shareholders of the Company and others entitled thereto. The said information is available for inspection at the corporate office of the Company during business hours on working days of the Company upto the date of the ensuing annual general meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.
Business Responsibility and Sustainability Report
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, "Business Responsibility and Sustainability Report (BRSR)" of the company for the financial year ended March 31, 2024 forms part of this Annual Report and annexed as Annexure-8
Vigil Mechanism:
In accordance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, the Company established a Vigil Mechanism to report genuine concerns
by all its stakeholders. The Audit Committee of the Board periodically reviews the complaints received if any under the policy.
The Whistle Blower Policy has been uploaded on the website of the Company.
General:
Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
i. Issue of equity shares with differential rights as to dividend, voting or otherwise.
ii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
iii. No significant or material orders were passed by any regulator or Court or Tribunal which impacts the going concern status and Company's operations in future.
iv. Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government
v. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
vi. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.
vii. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.
viii. There are no qualification, reservation or adverse remark or disclaimer made by the statutory auditors in their report and by the company secretary in practice in his secretarial audit report.
Your directors further state that:
a) The Company has complied with the provisions of constitution of internal complaints committee under the sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and
b) During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Acknowledgements:
Your directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers.