Your Directors are pleased to present the 54th Annual Report of the Company along withaudited financial statements for the year ended 31st March 2016.
The summary of the financial performance of the Company for the year ended 31st March2016 is as follows.
|Particulars ||31.03.2016 ||31.03.2015 |
|Revenue from operation ||34829 ||44050 |
|Other Income ||198 ||585 |
|Total Revenue ||35027 ||44635 |
|Earnings before Finance Cost Depreciation & Tax ||686 ||1813 |
|Less: Finance Cost ||2143 ||2304 |
|Earnings before Depreciation & Tax ||(1457) ||(491) |
|Less: Depreciation and amortization ||995 ||1037 |
|Profit before Tax ||(2452) ||(1528) |
|Less : Exceptional Items ||24 ||187 |
|Less: Current and deferred Tax ||(299) ||(541) |
|Less: Adjustment for earlier years ||-- ||- |
|Add : Extraordinary Items ||1595 ||- |
|Profit / (Loss) after Tax ||(582) ||(1174) |
Review of business operations
During the year under review your Company has achieved a total turnover of ' 34829lakhs and incurred loss of ' 582 lakhs as against the previous year turnover of ' 44050lakhs and the loss of ' 1174 lakhs. Your Directors are confident that the performancewould be improved during the current financial year.
Change in the nature of business
There was no change in the nature of business of the Company during the financial yearended 31st March 2016.
Due to losses incurred by the Company during the year under review the Directors havenot recommended any Dividend for the year ended 31st March 2016.
Transfer to Reserves
Due to losses incurred by the Company during the year under review the company isunable to transfer any amount to its reserves.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
In terms of Section 205A & 205C of the Companies Act 1956 an amount of '167816/- being unclaimed dividend (2007-08) was transferred during the year to theInvestor Education and Protection Fund established by the Central Government.
The issued subscribed and paid-up share capital of the Company as on 31.03.2016 stoodat ' 55000000/- divided into 55000000 equity shares of ' 1/- each. During the yearunder review the Company has not made any fresh issue of shares.
The Company has decided to delist its equity shares from BSE Ltd due to insignificanttransactions of its equity shares in BSE Ltd over a period of time.
Extract of Annual Return
The extract of Annual Return in the prescribed Form No.MGT-9 pursuant to Section 92(3)read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished as Annexure 1 and is attached to this Report.
Details on the composition of the Board and its Committees namely Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility Committee andStakeholders Relationship Committee number of meetings held during the year under reviewand other related details are set out in the Corporate Governance Report which forms partof this report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there are no material departures from those standards;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectivelyand
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Details in Respect to Frauds Reported by Auditors under Section 143(12) of theCompanies Act 2013 other than those which are reportable to the Central Government
There have been no frauds reported by the auditors pursuant to Section 143(12) of theCompanies Act 2013.
Declaration of Independent Directors
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under both theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Company's Policy relating to Directors appointment payment of Remuneration and othermatters provided under Section 178(3) of the Companies Act 2013
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for fixing and revising remuneration of Directors Key ManagerialPersonnel and Senior Management Personnel of the Company. The Remuneration policy of theCompany is annexed herewith as
Annexure 2 and can also be accessed on the Company's website at the link http://www.superspinning.com/wp-content/uploads/2015/07/ Nomination-and-Remuneration-Policy.pdf. TheCriteria for determining qualifications positive attributes and Independence of Directorsand Senior Management Personnel has been stated in Annexure 3 to this report.
There were no qualifications reservations adverse remarks or disclaimers made by theM/s.Reddy Goud and Janardhan Statutory Auditors and Mr. M.D.Selvaraj of MDS &Associates Secretarial Auditor in their report.
Particulars of Loans Guarantees or Investments made under Section 186 of the CompaniesAct 2013
During the year under review the Company has not granted any loans or given anysecurity or made any investments pursuant to the provisions of Section 186 of theCompanies Act 2013. However the details in respect of investments made by the Company inthe earlier years are disclosed in the notes to the financial statements.
Particulars of Contract or Transactions with related parties
All transactions entered into with related parties as defined under the Companies Act2013 during the financial year 2015-16 were in the ordinary course of business and on anarm's length basis. Since there are no transactions which are not on arm's length basisand material in nature the requirement of disclosure of such related party transactions inForm AOC-2 does not arise.
The policy on related party transactions as approved by the Board of Directors of theCompany has been uploaded on the company's website and may be accessed through the link athttp://www. superspinning.com/wp-content/uploads/2015/01/Policv-on-Related-Partv-Transactions.pdf.
Material changes and commitments affecting the financial position of the Company
There has been no material changes and commitments affecting the financial position ofthe Company which has occurred between the financial year ended 31st March 2016 and thedate of the report.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is attached herewith as Annexure4 to this report.
Risk Management Policy of the company
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventoried and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.
Whistle Blower Policy (Vigil Mechanism)
The details of the composition of the Audit Committee have been enumerated in theCorporate Governance Report which forms a part of the Board's report. The Company hasformulated a Whistle Blower policy in line with the provisions of Section 177 of theCompanies Act 2013 and Regulation 22 of SEBI(Listing Obligations and DisclosureRequirements) Regulations 2015 to enable the directors and employees to report concernsabout unethical behaviour actual or suspected fraud or violation of the company's code ofconduct or ethics policy. The policy also provides for adequate safeguards againstvictimization of director(s) / employee(s) who avail of the mechanism and also providesfor direct access to the Chairman of the Audit Committee in exceptional cases. The WhistleBlower policy has been uploaded on the company's website and may be accessed through thelink at http://www. superspinning.com/wp-content/uploads/2015/01/Whistleblower-Policy.pdf.
Corporate Social Responsibility initiatives
The Board has constituted a Corporate Social Responsibility Committee comprising of thefollowing directors as its members;
|1. Mr. C S K Prabhu ||- Chairman |
|2. Mr. Sumanth Ramamurthi ||- Member |
|3. Mr. A.S.Thirumoorthy ||- Member |
The company has adopted a Corporate Social Responsibility Policy defining therein theCSR activities to be undertaken by the Company in line with the provisions of Schedule VIIof the Companies Act 2013.
The Corporate Social Responsibility Committee of the Board is responsible for theimplementation and effective monitoring of the CSR activities of the Company.
The Annual Report on Company's CSR activities of the Company is furnished in theprescribed format as Annexure 5 to this report.
Annual evaluation of the Board on its own performance and of the Individual Directors
In accordance with the criteria suggested by the Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of non-independentdirectors and the Board as a whole based on various criteria. The performance of eachIndependent Director was evaluated by the entire board of directors on various parameterslike engagement leadership analysis decision making communication governance etc.
The performances of all the Committees were evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsetc.
Directors & Key Managerial Personnel
The tenure of office of Mr. Vijay Venkataswamy as an Independent Director of theCompany expires on 31st May 2016. The Board of Directors at their meeting held on 30th May2016 recommended the reappointment of Mr. Vijay Venkataswamy as an Independent Directorfor a second tenure for one year with effect from 1st June 2016 to 31st May 2017.
Mr. A S Thirumoorthy Managing Director of the Company retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
Your Directors recommend his re-appointment.
Mr. R Srikanth Company Secretary tendered his resignation during the year under reviewand he has been relieved of his duties from the closing hours of the business on 20thOctober 2015. Ms. Ramaa Krishnakumar has been appointed as Company Secretary andCompliance Officer of the Company with effect from 7th November 2015.
Key Managerial Personnel of the Company as required under Section 2(51) and 203 of theCompanies Act2013 are Mr.Sumanth Ramamurthi Executive Chairman Mr.A.S.ThirumoorthyManaging Director Mr.N.Hemanand Chief Financial Officer and Ms.Ramaa KrishnakumarCompany Secretary.
Subsidiaries Joint Ventures and Associate Companies
The Company has two subsidiaries namely M/s.Sara Elgi Arteriors Limited - a whollyowned subsidiary and M/s. Elgi Building Products Limited - step down subsidiary.
A report containing the salient features of the subsidiaries as required under Section129(3) of the Companies Act 2013 has been annexed herewith in Form AOC-1 and is attachedas Annexure 6 to this report.
The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the Company in the immediately preceding financial year or hasgenerated 20% of the consolidated income of the Company during the previous financialyear. The policy on determination of material subsidiaries of the company as approved bythe Board of Directors has been uploaded on the website of the Company and can be accessedat the link http://www. superspinning.com/wp-content/uploads/2015/01/Policy-on-Subsidiaries.pdf.
The consolidated financial statements of the company and its subsidiaries prepared inaccordance with the applicable accounting standards have been annexed to the AnnualReport.
The annual accounts of the subsidiary companies are posted on the website of theCompany viz. www. superspinning.com and will also be kept open for inspection to anyshareholder at the Registered Office of the Company. The Company shall also provide thecopy of the annual accounts of subsidiary companies to the shareholders upon theirrequest.
Since the Company has not accepted any fixed deposits covered under Chapter V of theCompanies Act 2013 there are no deposits remaining unclaimed or unpaid as on 31st March2016 and accordingly the question of default in repayment of deposits or payment ofinterest thereon during the year does not arise.
Details of significant and material orders passed by the regulators or Courts orTribunals impacting the going concern status and Company's operation in future
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
Adequacy of Internal Financial Controls with reference to the Financial Statements
The Company has adequate internal control systems to monitor business processesfinancial reporting and compliance with applicable regulations. The systems areperiodically reviewed for identification of control deficiencies and formulation of timebound action plans to improve efficiency at all the levels. The Audit committee of theBoard constantly reviews internal control systems and their adequacy significant riskareas observations made by the internal auditors on control mechanism and the operationsof the Company and recommendations made for corrective action through the internal auditreports. The committee reviews the statutory auditors' report key issues significantprocesses and accounting policies.
The Directors confirm that the Internal Financial Controls (IFC) are adequate withrespect to the operations of the Company. A report of Auditors pursuant to Section143(3)(i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditors Report.
M/s.Reddy Goud & Janardhan Chartered Accountants Bangalore retire at the ensuingAnnual General Meeting and are eligible for re-appointment. The Audit Committee & theBoard of Directors recommend the re-appointment of M/s.Reddy Goud & JanardhanChartered Accountants as the Statutory Auditors of the Company. Further company hasreceived a certificate from the Statutory Auditors to the effect that theirre-appointment if made would be within the limits prescribed under Section 139 of theCompanies Act 2013.
Necessary resolution for the appointment of Auditors has been included in the Notice ofthe Annual General Meeting for the approval of the Members.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D.Selvaraj MDS & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The report of the Secretarial report isannexed herewith as Annexure 7 to this report.
The Board of Directors on the recommendation of the Audit Committee have reappointedM/s. S.Mahadevan & Co. Cost Accountants as the Cost Auditors of the company for thefinancial year 2016-17.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Recordsand Audit) Rules 2014 the remuneration payable to the Cost Auditors is subject to theratification of the members in a general meeting. The Board recommends the ratification oftheir remuneration.
Particulars of Employees
The disclosure as required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed herewith as Annexure 8 and is attached to this report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate exceeding ' 6000000/- if employedthroughout the year or ' 500000/- per month if employed for part of the year.
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areport on Corporate Governance together with the Auditors Certificate regarding complianceof the conditions of Corporate Governance Management Discussion and Analysis statementforms part of the Annual Report.
Disclosure under the Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place a policy on Sexual Harassment of Women at workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Company has constituted an internal complaints committee to address the complaintsregarding sexual harassment. All employees are covered under this policy. The company hasreceived few complaints and all the complaints are properly settled after conductinginquiry.
Staff and Labour relations during the year at all units of the company continued to becordial.
Your Directors wish to thank the Company's Bankers Financial Institutions Customersand Suppliers for their unstinted support and co-operation.
Your Directors wish to place on record their appreciation of the confidence reposed bythe shareholders in the Company at all times.
The Board of Directors also wishes to thank the employees at all levels for theirexcellent support and contribution made by them.
| ||By Order of the Board |
| ||Sumanth Ramamurthi |
|Coimbatore ||Executive Chairman |
|30th May 2016 ||DIN: 00002773 |