About Sunil Industries Ltd

Sunil Industries Ltd was originally incorporated as a Private Limited Company with the name, 'Raj Ratan Textile Processors Pvt Ltd' on 19 November, 1976, which was set up in 1969 as a Partnership Firm. The Management of the Company was taken over by Vinod Lath from the Directors, J S Jadhav, M N Rane and S K Ovhal. The name of the Company changed to Sunil Dyeing Pvt Ltd on April 22, 1982. Then, later on, the Company got converted into a Public Limited Company on 16 May '91 and was renamed Sunil Dyeing Limited and consequently, the name of the Company was changed to Sunil Industries Limited. Sunil Industries are leading manufacturer and supplier of textile fabric products in the Central & State Government department/ institutions. Starting off in 1976, as a small processing unit, today, the has its own Spinning, Weaving, Knitting, Processing, Stitching capacity and supplying finished textile products. Initially, the Company was engaged in the manual processing of cotton textiles. Later, it started processing synthetic fabric and blended fabric. In 1984, the company started power processing. It is engaged in job-work for clients and also in selling of cloth which it processes on its own account. The manufacturing unit of SIL is located in Dombivli, Maharashtra. In Dec.'94, it came out with a public issue of 22 lac equity shares at a premium of Rs 20 per share, aggregating Rs 6.6 cr. The proceeds of the issue were utilised to part-finance the Rs 12-cr expansion project to increase the installed capacity from 600 lac mtr to 1050 lac mtr pa. Other group companies of SIL include Sunil Fabrics, Sunil Prints, Sunil Synthetics, Sunil Bleaching, Eske Tex (India) and Shreeji Textiles. The company's R&D wing has carried out research in wet discharge and camouflague printing processes which has resulted in improving the quality of printing and also in reducing cost. During 1995-96, there was major fire on 13/03/96 in the main unit of the company at M I D C. Dombivili. Therefore the company has made sizeable investment in capital assests with a view to modernize the production process. Additions assests amounted to Rs. 299 lakhs. During 1996-97, company's manufacturing unit was destroyed by fire on 13th March, 1996. The company has claimed 395.88 lacs towards reinstatement of value of fixed assest and Rs. 1006.47 lacs towards loss of stock of the company and customers. The insurance company has sanctioned claim of Rs. 160.69 lacs towards fixed assest and 878.87 towards loss of stock. The difference was borne by the company. Company is in the process of reconstructing the unit. Company has also invested in capital assest of amount worth Rs. 77.78 lacs. During the year 1998-99, the Company, to enhance the credibility in the national and international market, has initiated steps for obtaining ISO 9002 Certification. The Company's products are also being considered by Bureau of Indian Standards for granting of ISI mark. The performance of the company was affected adversely due to the sluggishness and deceleration of economic growth and resulting to this, there stood a sharp fall in turnover, during the year 1999-2000.

Sunil Industries Ltd Chairman Speech

Annexure I

To,

The Members,

Sunil Industries Limited

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these Secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness appropriateness of financial records and books of accounts of the Company.

4. Where ever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial audit report is neither an assurance as to the future viability of the Company nor of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

Sunil Industries Ltd Company History

Sunil Industries Ltd was originally incorporated as a Private Limited Company with the name, 'Raj Ratan Textile Processors Pvt Ltd' on 19 November, 1976, which was set up in 1969 as a Partnership Firm. The Management of the Company was taken over by Vinod Lath from the Directors, J S Jadhav, M N Rane and S K Ovhal. The name of the Company changed to Sunil Dyeing Pvt Ltd on April 22, 1982. Then, later on, the Company got converted into a Public Limited Company on 16 May '91 and was renamed Sunil Dyeing Limited and consequently, the name of the Company was changed to Sunil Industries Limited. Sunil Industries are leading manufacturer and supplier of textile fabric products in the Central & State Government department/ institutions. Starting off in 1976, as a small processing unit, today, the has its own Spinning, Weaving, Knitting, Processing, Stitching capacity and supplying finished textile products. Initially, the Company was engaged in the manual processing of cotton textiles. Later, it started processing synthetic fabric and blended fabric. In 1984, the company started power processing. It is engaged in job-work for clients and also in selling of cloth which it processes on its own account. The manufacturing unit of SIL is located in Dombivli, Maharashtra. In Dec.'94, it came out with a public issue of 22 lac equity shares at a premium of Rs 20 per share, aggregating Rs 6.6 cr. The proceeds of the issue were utilised to part-finance the Rs 12-cr expansion project to increase the installed capacity from 600 lac mtr to 1050 lac mtr pa. Other group companies of SIL include Sunil Fabrics, Sunil Prints, Sunil Synthetics, Sunil Bleaching, Eske Tex (India) and Shreeji Textiles. The company's R&D wing has carried out research in wet discharge and camouflague printing processes which has resulted in improving the quality of printing and also in reducing cost. During 1995-96, there was major fire on 13/03/96 in the main unit of the company at M I D C. Dombivili. Therefore the company has made sizeable investment in capital assests with a view to modernize the production process. Additions assests amounted to Rs. 299 lakhs. During 1996-97, company's manufacturing unit was destroyed by fire on 13th March, 1996. The company has claimed 395.88 lacs towards reinstatement of value of fixed assest and Rs. 1006.47 lacs towards loss of stock of the company and customers. The insurance company has sanctioned claim of Rs. 160.69 lacs towards fixed assest and 878.87 towards loss of stock. The difference was borne by the company. Company is in the process of reconstructing the unit. Company has also invested in capital assest of amount worth Rs. 77.78 lacs. During the year 1998-99, the Company, to enhance the credibility in the national and international market, has initiated steps for obtaining ISO 9002 Certification. The Company's products are also being considered by Bureau of Indian Standards for granting of ISI mark. The performance of the company was affected adversely due to the sluggishness and deceleration of economic growth and resulting to this, there stood a sharp fall in turnover, during the year 1999-2000.

Sunil Industries Ltd Directors Reports

To,

The Members,

Your director's have great pleasure in presenting 47^th Annual Report along with the Audited Balance Sheet and Profit and Loss Account for the year ended on 31^st March, 2023.

The Financial Results are briefly indicated below:

(Rs. In Lakhs)

During the year ended 31^st March, 2023, your Company reported total Income of Rs. 2,27,77,29,477/- whichin comparison to previous year's figures have increased by approximately 40.87%.The Net Profit after tax and OCI is Rs. 3,38,29,412/- as compared to Rs. 2,80,26,769/-in previous year marking anaddition of approximately 20.70% but the overall profit carried forward to the Balance Sheet is Rs. 19,85,38,675/- which has increased by 20.53%as compared to previous year's figure.

The company does not have any Subsidiary, Joint Venture or Associate Company and therefore provision with respect to Section 129 of the Companies Act, 2013 are not applicable to the Company.

In order to conserve the reserves for a sustainable future, you're Company does not recommend Dividend for the Financial Year 2022-2023.

During the year under review, no amount is proposed to be transferred to General Reserve out of the net profits of the Company for the Financial Year 2022-2023. Hence, the entire amount of profit has been carried forward to the Profit & Loss Reserve Account.

During the year no Significant and Material Orders passed by the regulations or Courts or Tribunals impacting the going concern status and Company's operations in future.

There is no change in the nature of business of the Company.

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there are no unpaid dividends pending of the Company.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed and also discussed at the meetings of the Audit Committee and the Board of Directors of the Company. Safety at work is being followed at all times.

The Company's internal controls system has been established on values of integrity and operational excellence and it supports the vision of the Company “To be the most sustainable and competitive Company in our industry”. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The Management's Discussion and Analysis Report for the year under review, as stipulated under regulation 34 (3) and Part B of Schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015, is annexed to this Annual Report.

The Company is committed towards maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Regulation 34 (3) and Part C of Schedule V of the SEBI (Listing Obligation and Disclosure Requirement), Regulation 2015 forms part of the Annual Report. The Certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under Regulation 34 (3) and Part E of Schedule V of the SEBI (Listing Obligation and Disclosure Requirement), Regulation 2015 is also published in this Annual Report.

The Report on Corporate Governance as stipulated under Regulation 34 (3) and Part C of Schedule V of the SEBI (Listing Obligation and Disclosure Requirement), Regulation 2015 prepared by HSPN Associates& LLP, Company Secretaries, forms part of the Annual Report and is annexed hereto as Annexure D.

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135 of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility.

The particulars of investment made under Section 186 of the Companies Act, 2013 have been disclosed in the financial statements in Note 4 of the Financial Statement.

The Company has given not given any loans falling under Section 185 and 186 of the Companies Act 2013 nor has it provided any Corporate Bank guarantee.

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All the related party transactions are entered on arm's length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, transactions are being reported in Form AOC-2 i.e.,Annexure B in terms of Section 134 Companies (Accounts) Rules, of the Act read with Rule 8 of the 2014. However, the details of the transactions with the Related Party are provided in the Company's financial statements in accordance with the Accounting Standards as applicable to the Company.

All Related Party Transactions are presented to the Audit Committee and the Board and wherever forecasted Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website at www.sunilgroup.com.

The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under the said policy. The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and it redresses complaints received on sexual harassment. During the financial year under review, the Company has not received any complaints of sexual harassment from any of the employees of the Company.

The Statutory Auditor's Report does not contain any qualifications, reservations or adverse remarks, but Secretarial Audit Report contains qualifications pursuant to Regulations 31 (2) of Listing Obligation, Disclosure Requirements, Regulations 2015 for Dematerialization of Promoters shareholding. The company would like to inform that Promoters being distant relatives of each other are scattered all over and hence it is very difficult to convert each promoter's physical holding into Demat, however the company is in the process for conversion of the same as per Regulations 31 (2) of LODR. The Report of the secretarial auditor in MR-3 is given as an Annexure which forms part of this report.

The Annual Return pursuant to the provisions of Section 92 read with Rule 12 of (Management and Administration) Rules, 2014 is available at the Website of the Company.www.sunilgroup.com

The Company has neither accepted nor renewed any deposits during the year under review.

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

c. The median remuneration for the year 2022-2023is Rs 1,75,362/-

d. The percentage increase/(decrease) in the median remuneration of employees in the financial year: (14.86%)

e. The number of permanent employees on the rolls of Company: 29

On an average, employees received an annual increase of 7.17%.

The overall decrease in aggregate remuneration is due to reduction of employees. In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organization performance, apart from an individual's performance.

The average annual increase was around 7.17%.

The increase in the managerial remuneration for the relevant year as compared to previous year is 44.56%.

j. The key parameters for any variable component of remuneration availed by the directors:

There are no variable components of remuneration provided to the Directors.

The Nomination and Remuneration Committee of the Company has affirmed at its meeting held on 30 ^th August, 2021 that the remuneration is as per the remuneration policy of the Company. The policy is available on the company's website: www.sunilgroup.com.

The present composition of the Board is in compliance with the provisions of Section 149 of the Companies Act, 2013.As on date; Mr. Rohit Gadia, Mrs. Shruti Saraf and Mr. Rajesh Tibrewal are the Independent Directors on the Board.

The Company has received declarations from all these Independent Directors confirming that they meet with the criteria of independence prescribed under subsection (6) of Section 149 of the Companies Act, 2013 and read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board states that during the financial year there has been no new appointment of Independent Directors and its present three Independent Directors fulfil the conditions of integrity, expertise and experience based on the size and operations of your Company. Further the Board hereby states that by virtue of Independent Directors being appointed as for a period of 5 years or more, therefore by virtue of the same the mandatory online proficiency self-assessment test is exempted for the Independent Directors of your Company.

Mr. Vinod Lath, Managing Director, Mr. Pradeep Roongta, CFO and Whole Time Director, Mr. Ramesh Khanna, Whole Time Director, Mr. SaurabhSahu, Company Secretary are the Key Managerial Personnel of the Company.

Mr. Pradeep ChatruprasadRoongtais liable to retire by rotation in this 46^th Annual General Meeting and being eligible he has offered himself for re-appointment as Whole Time Director. The Board recommends his re-appointment for your approval.

In terms of Section 134(5) of the Companies Act, 2013 The Board of Directors of the Company hereby confirms:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii. That the selected accounting policies were applied consistently and the Directors 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 as at 31^st March, 2023, and that of the profit of the Company for the year ended on that date.

iii. That proper and sufficient care has been taken 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.

iv. That the annual accounts have been prepared on a going concern basis.

v. The Board has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

During the financial year, the Board had met Six(6) times on 30.05.2022,12.08.2022, 25.08.2022, 14.11.2022,14.02.2023 and 28.02.2023.

The Audit Committee as on date comprises of four members viz. Mr. Rajesh Tibrewal (Independent Director), Mrs. Shruti Saraf (Independent Director), Mr. Rohit Gadia (Independent Directors) and Mr. Pradeep Roongta (CFO and Whole Time Director). The above composition of the Audit Committee consists of 3 (three) Independent Directors who form a majority. The Role of the Committee is provided in the Corporate Governance Report. The Audit Committee Met6(Six) times in the financialyear.All the recommendations made by the Audit Committee during the year were accepted by the Board.

Pursuant to Section 178 of the Companies Act, 2013, the Stakeholder's Relationship Committee constituted by the Board of Directors to deal with the matters related to stakeholders' grievances met 6 (Six) times during the Financial Year.

The details of status of grievances received from various stakeholders during the financial year are furnished in the Corporate Governance Report.

The Nomination & Remuneration Committee of Directors have approved a policy for selection, appointment and remuneration of Directors which inter-alia requires that composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and Senior Management Employees and the Directors appointed shall be of high integrity with relevant expertise and experience so as to have diverse Board and the Policy also lays down the positive attributes/ criteria while recommending the candidature for the appointment as Director. The Committee Met 2 (Two) times in the financial year.

Details of the Nomination, Remuneration and Evaluation Policy are set out are available at website of the Company at www.sunilgroup.com.

In compliance with the Companies Act, 2013, and Regulation 17 of the Listing

Regulations, 2015 the performance evaluation of the Board and its Committees were carried out during the year under review. More details on the same are given in the Annexure to Corporate Governance Report.

The evaluation framework for assessing the performance of Directors comprises of the following key areas:

i. Attendance of Board Meetings and Board Committee Meetings.

ii. Quality of contribution to Board deliberations.

iii. Strategic perspectives or inputs regarding future growth of Company and its performance.

iv. Providing perspectives and feedback going beyond information provided by the management.

v. Commitment to shareholder and other stakeholder interests.

vi. The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board will not participate in the discussion of his / her evaluation.

The familiarization programme aims to provide Independent Directors with the Textile industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner. The familiarization programme also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The policy on Company's familiarization programme for Independent Directors is posted on Company's website at www.sunilgroup.com along with the Familiarization programme for F.Y 2022-2023 along with the hours spent on the Programme.

Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2 as revised by the ICSI, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been followed by the Company.

The Board of Directors of the Company has, pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed “Whistle Blower Policy” for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.

The Company has also provided direct access to Chairman of Audit Committee on reporting issues concerning the interests of co-employees and the Company. The Vigil Mechanism Policy is available at the website of the company: www.sunilgroup.com. No instance under the Whistle Blower Policy was reported during the financial year 2022-2023.

The Company has neither accepted nor renewed any deposits during the year under review.

During the year under review, the Auditors of the Company have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Act.

M/s. P R Agarwal &Awasthi, Chartered Accountants (FRN.: 117940W) have tendered their resignation from the position of Statutory Auditors due to specific reason as mentioned in their resignation Letter, resulting into a casual vacancy in the office of Statutory Auditors of the company as envisaged by section 139(8) of the Companies Act, 2013 (“Act”). Casual vacancy caused by the resignation of auditors can only be filled up by the Company in after taking consent of the members.

It is proposed to appoint M/s.V.K. Beswal& Associates, Chartered Accountants, as Statutory Auditors of the Company pursuant to the provisions of Sections 139 (8) of the Companies Act, 2013 to hold office from the conclusion of 47th Annual General Meeting of the Company until the conclusion of the 52nd Annual General Meeting of the Company to be held in the year 2028, on a proposed remuneration of Rs. 2,50,000/- (Rupees Two Lacs Fifty Thousand Only) for conducting the audit of the Company, excluding applicable taxes and reimbursement of out-of-pocket expenses on actual subject to approval of members, in the ensuing Annual General Meeting. Your directors recommend their appointment.

The resolution for approval for re-appointment and payment of remuneration is put forward for your approval in the ensuing Annual General Meeting.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 is applicable to your Company.

M/s Shanker Chaudhary & Co, Cost Accountant are appointed as Cost Accountants in compliance of Section 148(1) read with Section 139 of the Companies Act, 2013 to audit Cost records maintained by the Company for the financial year commencing from 01st April, 2023 and ending 31st March, 2024at a remuneration of Rs. 1,25,000 (Rupees One Lakh Twenty-Five Thousand only) plus Service Tax & Re-imbursement of out-of-pocket expenses.

The company had appointed Chetan Jain & Associates, Chartered Accountants, Mumbai, as Internal Auditor of the company for Financial Year 2022-2023.

The Company has appointed M/s HSPN & Associates LLP, Company Secretaries, as Secretarial Auditors of the Company to carry out the Secretarial Audit for the Financial Year 2023-2024and to issue Secretarial Audit Report as per the prescribed format under rules in terms of Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The report of secretarial Auditor is appended to this report as Annexure C to Director's Report.

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexure A to Director's Report.

There have being no material changes and commitments affecting the financial position of the Company occurred during the financial year.

The Company seeks to promote highest levels of ethical standards in the normal business transaction guided by the value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates formulation of certain policies for Listed Companies. The Policies are reviewed periodically by the Board and are updated based on the need and compliance as per the applicable laws and rules and amended from time to time. The policies are available on the website of the Company at www.sunilgroup.com.

As per the confirmation given by Registrar and Transfer Agent, the Company has nil shares that remain unclaimed by the shareholders of the Company. All shares held in demat and physical form has been duly claimed by the respective shareholders and hence the company is not required to undergo the procedural requirements of Schedule VI of the SEBI (LODR) Regulations, 2015.

The company does not have any Employees Stock Option Scheme in force and hence particulars are not furnished, as the same are not applicable.

Pursuant to Regulation 27 of (Listing Obligation and Disclosure Requirements), Regulations 2015, report on Corporate Governance is given in Annexure D.

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operation include global and domestic demand and supply conditions affecting selling prices of Raw Materials, Finished Goods, input availability and prices, changes in government regulations, tax laws, economic developments within and outside the country and other various other factors.

Your Company wishes to sincerely thank all the customers, commercial banks, financial institution, creditors etc. for their continuing support and co-operation.

Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the company and also sincerely thank the shareholders for the confidence reposed by them in the company and from the continued support and cooperation extended by them