Your Directors are pleased to present the 55th Annual Report of the Company along withaudited financial statements for the year ended 31st March 2017.
Financial Highlights :
The summary of the financial performance of the Company for the year ended 31st March2017 is as follows.
| || ||(Rs. in Lakhs) |
|Particulars ||31.03.2017 ||31.03.2016 |
|Revenue from operation ||29407 ||34829 |
|Other Income ||1271 ||198 |
|Total Revenue ||30678 ||35027 |
|Earnings before Finance Cost Depreciation & Tax ||1379 ||686 |
|Less: Finance Cost ||1700 ||2143 |
|Earnings before Depreciation & Tax ||(321) ||(1457) |
|Less: Depreciation and amortization ||956 ||995 |
|Profit/(Loss) before Tax ||(1277) ||(2452) |
|Less: Exceptional Items ||58 ||24 |
|Less: Current and deferred Tax ||(263) ||(299) |
|Add: Extraordinary Items ||- ||1595 |
|Profit/(Loss) after Tax ||(1072) ||(582) |
Review of business operations
During the year under review your Company has achieved a total turnover of Rs.29407lakhs and incurred loss of Rs.1072 lakhs as against the previous year turnover ofRs.34829 lakhs and the loss of Rs.582 lakhs. Your Directors are confident that theperformance would be improved during the current financial year.
Change in the nature of business
There was no change in the nature of pricipal business of the Company during thefinancial year ended 31st March 2017. However the Company has acquired the business ofmanufacturing UPVC building products pursuant to the scheme of amalgamation.
Transfer to Reserves
During the year under review no amount has been transferred to general reserves.However the current year loss of Rs.1072/- Lakhs has been carried forward to the Profitand Loss Account.
Due to losses incurred by the Company during the year under review the Directors havenot recommended any Dividend for the year ended 31st March 2017.
The issued subscribed and paid-up share capital of the Company as on 31st March 2017stood at Rs.55000000/- divided into 55000000 equity shares of '1/- each. During theyear under review the Company has not made any fresh issue of shares.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
There was no amount to be transferred during the year to the Investor Education andProtection Fund established by the Central Government.
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.
Board and Committee meetings
During the year under review 5 meetings of the Board of Directors 5 meetings of AuditCommittee
2 meetings of Nomination and Remuneration Committee and 2 meetings of StakeholdersRelationship Committee were held. Further details of the same have been enumerated in theCorporate Governance Report annexed herewith.
Statement on compliance with Secretarial Standards
The Company has complied with the Secretarial Standards on Board and General Meetingsissued by the Institute of Company Secretaries of India.
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 of 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 both under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and the Companies Act2013.
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 Nomination and RemunerationPolicy of the Company is annexed herewith as Annexure 2 and can also be accessed onthe Company's website at the link http://www.superspinning.com/wp-content/uploads/2015/07/Nomination-and-Remuneration-policy.pdf.
Comments on Auditors' Report
There were no qualifications reservations adverse remarks or disclaimers made by M/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 contracts or transactions with related parties
All transactions entered into with related parties as defined under the Companies Act2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 during the financial year 2016-17 were in the ordinary course ofbusiness and on an arm's length basis. Since there are no transactions which are not onarm's length basis and material in nature the requirement of disclosure of such relatedparty transactions in Form 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/2016/08/PolicyOnRelatedPartyTransaction.pdf.
Material changes and commitments affecting the financial position of the company
The National Company Law Tribunal Chennai Bench has vide it Order dated 04.09.2017 and19.09.2017 sanctioned the Scheme of Amalgamation of Sara Elgi Arteriors Ltd and ElgiBuilding Products Ltd with the Company with effect from the appointed date ie. 1st April2016. Other than this there has been no material changes and commitments affecting thefinancial position of the Company which has occurred between the financial year ended 31stMarch 2017 and the date 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 Annexure3 to this report.
Risk Management Policy of the company
The Company has a structured risk management policy. The Company does not face any riskother than those prevalent in the industry. The Company has taken all possible steps toovercome such risks. The Risk management process is designed to safeguard the organizationfrom various risks through adequate and timely actions. It is designed to anticipateevaluate and mitigate risks in order to minimize its impact on the business. The potentialrisks are inventoried and integrated with the management process such that they receivethe necessary consideration during decision making.
The Company has constituted Audit Committee in accordance with Section 177 of theCompanies Act 2013. Kindly refer the Report on Corporate Governance for matters relatingto the composition meetings and functions of the committee.
The Board has accepted the Audit Committee's recommendations during the year whereverrequired and hence no disclosure is required under Section 177(8) of the Companies Act2013 with respect to rejection of any recommendations of Audit Committee by the Board.
Whistle Blower Policy (Vigil Mechanism)
The Company has formulated a Whistle Blower policy in line with the provisions ofSection 177 of the Companies Act 2013 and Regulation 22 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 to enable the directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of thecompany's code of conduct or ethics policy. The policy also provides for adequatesafeguards against victimization of director(s)/employee(s) who avail of the mechanism andalso provides for direct access to the Chairman of the Audit Committee in exceptionalcases. The Whistle Blower policy has been uploaded on the company's website and may beaccessed through the link at http://www.superspinning.com/wp-content/uploads/
Corporate Social Responsibility initiatives
The Corporate Social Responsibility Committee comprises of Mr. C S K Prabhu Mr.Sumanth Ramamurthi and Mr. A S Thirumoorthy.
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 4 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 Committees IndependentDirectors Non-Independent Directors Chairman and Managing Director. Based on thatperformance evaluation has been undertaken. A separate meeting of Independent Directors ofthe Company was held for this purpose.
Directors & Key Managerial Personnel
As per the provisions of Section 152 of the Companies Act 2013 Mr. SumanthRamamurthi Executive Chairman of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.
The second tenure of office of Mr. Vijay Venkataswamy as an Independent Director of theCompany ended on 31st May 2017 and hence Mr. Vijay Venkataswamy retired from the Boardwith effect from 31st May 2017.
As per the retirement policy of the Company Mr. Sarath Chandran on the attainment ofsuperannuation retired from the Board with effect from 31st May 2017.
The Board of Directors placed on record their sincere appreciation for the valuablecontributions made by them in the upliftment and the growth of the Company during theirlong decades of association with the Company.
The Nomination and Remuneration Committee and the Board of Directors at their meetingsheld on
30th May 2017 have appointed Mr. B Lakshmi Narayana and Mr. A R Balasundharam asAdditional Directors of the Company with effect from 1 st June 2017 and they shall holdoffice upto the date of this Annual General Meeting. Accordingly necessary resolutionsproposing the appointment of Mr. B Lakshmi Narayana & Mr. A R Balasundharam asIndependent Directors of the Company has been included in the Agenda of the Noticeconvening the Annual General Meeting for the approval of the members.
The Board of Directors at their meeting held on 31st January 2017 and on therecommendation of the Nomination and Remuneration Committee reappointed Mr. SumanthRamamurthi as an Executive Chairman and Mr. A S Thirumoorthy as Managing Director of theCompany for a period of three years with effect from 1st April 2017.
Necessary resolutions in this regard have been included in the Agenda of the Noticeconvening the Annual General Meeting for the approval of the members.
Mr. N Hemanand Chief Financial Officer had resigned from the services of the Companyfrom 14th June 2016 and Mr. C Shankar an Associate Member of the Institute of CharteredAccountants of India was appointed as Chief Financial Officer of the Company with effectfrom 15th June 2016.
Key Managerial Personnel of the Company as required under Section 2(51) and 203 of theCompanies Act 2013 are Mr. Sumanth Ramamurthi Executive Chairman Mr. A S ThirumoorthyManaging Director Mr. C Shankar Chief Financial Officer and Ms. Ramaa KrishnakumarCompany Secretary.
Subsidiaries Joint Ventures and Associate Companies
During the year under review M/s. Sara Elgi Arteriors Limited - a wholly ownedsubsidiary Company and M/s. Elgi Building Products Limited - step down subsidiary Companyhas been amalgamated with the Company as per the order of National Company Law Tribunaldated 4th September 2017 and 19th September 2017 with effect from the appointed datei.e. 1st April 2016.
Consequent to the amalgamation the Company does not have any subsidiaries.
The Company also does not have any Joint Ventures or Associate Companies.
The Company has not accepted or renewed any fixed deposits during the year under reviewand hence there were no unpaid deposits as on 31st March 2017.
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 are 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 implemented adequate internal control systems to monitor internalbusiness process financial reporting and compliance with applicable regulations. Thesystems are periodically reviewed for identification of control deficiencies andformulation of time bound action plans to improve efficiency at all the levels. The auditCommittee of the Board constantly reviews internal control systems and their adequacysignificant risk areas observations made by the internal auditors on control mechanismand the operations of the Company and recommendations made for corrective action throughthe internal audit reports. The committee reviews the statutory auditors' report keyissues significant process and accounting policies.
The Directors and the Management confirms that the Internal Financial Controls (IFC)are adequate with respect to the operations of the Company. A report of Auditors pursuantto Section 143(3)(i) of the Companies Act 2013 certifying the adequacy of InternalFinancial Controls is annexed with the Auditors Report.
The tenure of office of M/s.Reddy Goud & Janardhan Chartered AccountantsBengaluru expires at the ensuing Annual General Meeting of the Company. The AuditCommittee and the Board of Directors have recommended the appointment of M/s. SethiaPrabhad Hegde & Co. Chartered Accountants Bengaluru as the Statutory Auditors ofthe Company in the place of the retiring auditors M/s. Reddy Goud & Janardhan for aperiod of five years from the conclusion of the 55th Annual General Meeting till theconclusion of the 60th Annual General Meeting of the Company subject to ratification ofthe appointment by the members at every Annual General Meeting if so required under theAct. Further the Company has received a certificate from M/s. Sethia Prabhad Hegde &Co. to the effect that their appointment if made would be in accordance with theprovisions of Section 141 of the Companies Act 2013.
The Board recommends the resolution for the appointment of Statutory Auditors for theapproval of the members.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding rules framed thereunder the Company has appointed Mr. M D Selvaraj MDS& Associates Company Secretaries in Practice to undertake the Secretarial Audit ofthe Company. The report of the Secretarial Audit in Form No. MR-3 for the financial year2016-17 is annexed herewith as Annexure 5 to this report.
On the recommendation of the Audit Committee the Board of Directors have appointedM/s. S Mahadevan & Co. Cost Accountants (Firm Reg. No. 000007) as the Cost Auditorsof the Company for the financial year 2017-18.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the remuneration payable to the Cost Auditors is subject to theratification of the members in general meeting. The Board recommends the ratification oftheir remuneration.
Particulars of Employees
The details pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed herewith as Annexure 6 to this report.
A report on Corporate Governance is annexed to and forms part of this report. TheCompany has complied with the conditions relating to Corporate Governance as stipulated inSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
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 redress the complaintsregarding sexual harassment. All employees are covered under this policy. The company hasreceived few complaints and all the complaints are properly settled after conductingenquiry.
The Company continues to enjoy the cordial relationship with it's employees at alllevels.
Th Directors thank the Company's Bankers Financial Institutions Customers VendorsInvestors Suppliers and Business Associates for their unstinted support.
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 place on record their appreciation for thecontributions made by the employees towards the growth of the Company.
| ||By Order of the Board |
| ||Sumanth Ramamurthi |
|Coimbatore ||Executive Chairman |
|23rd October 2017 ||DIN: 00002773 |
Conservation of Energy Technology Absorption and Foreign Exchange Earning and Outgo
[Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014]
(A) Conservation of energy
(i) the steps taken or impact on conservation of energy;
Various measures have been initiated to conserve energy at all the units. Power Auditis also being done to measure monitor the Process-wise consumption of Power and necessarycorrections are also taken wherever necessary to control the power costs. The followingmeasures are also implemented
i. Replacing the T5 tube lights with LED tubes
ii. Optimizing the Ring frame motor KW
iii. CDS system for compact Ring frames
iv. Pnumasave fans and suction tubes for Ring frames
(ii) the steps taken by the company for utilizing alternate sources of energy;
Solar energy is being used (24.7% of total energy) and steps are taken to improve itsusage.
(iii) the capital investment on energy conservation equipments;
The Company has incurred Rs.16 Lakhs during the year under review towards Energyconservation equipments.
(B) Technology absorption
i) the efforts made towards technology absorption - NIL
ii) the benefits derived like product improvement cost reduction product developmentor import substitution; - NIL
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-
(a) the details of technology imported; NIL
(b) the year of import; N.A.
(c) whether the technology been fully absorbed; N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; - N.A.
(iv) the expenditure incurred on Research and Development - NIL
(C) Foreign Exchange earnings and outgo
The foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows:
| || ||in Lakhs |
|Particulars ||2016-17 ||2015-16 |
|Total Foreign Exchange earnings ||4628 ||7322 |
|Total Foreign Exchange outflow ||1754 ||1092 |
| ||By Order of the Board |
| ||Sumanth Ramamurthi |
|Coimbatore ||Executive Chairman |
|23rd October 2017 ||DIN: 00002773 |