To The Members
Your Directors have pleasure in presenting their 21stAnnual Report on thebusiness and operations of the Company together with the Audited Statement of Accounts forthe year ended 31st March 2019.
The summarised financial performance of the Company is as under:
| || ||(Rs. in Lacs) |
|Particulars ||Current Yr. ||Previous Yr. |
|Turnover (Including Exports Incentives) ||9215.35 ||9020.23 |
|Other Income ||12.62 ||30.59 |
|Profit/(loss) before Depreciation and Taxation ||302.09 ||275.58 |
|Provision for Depreciation ||157.91 ||135.43 |
|Profit/(Loss) before taxation ||144.18 ||140.15 |
|Less: Provision for Taxation ||34.80 ||75.94 |
|Profit/(Loss) after tax ||109.38 ||64.21 |
|Balance carried to Balance Sheet ||109.38 ||64.21 |
STATE OF COMPANYS AFFAIRS
During the year under review the Company has achieved turnover of INR 9215.35 Lakhs ascompared to INR 9020.23 Lakhs for the previous year. The Company has however incurredprofits of INR 109.38 Lakhs as compared to profit of INR 64.21 Lakhs for the previousyear.
The Company has not declared any dividend during the year.
AMOUNTS TRANSFERRED TO RESERVES
The Company has transferred INR109.38 Lakhs to Reserves.
CHANGES IN SHARE CAPITAL
Thereis no change in Share Capital of the Company during the year.
The Board of Directors comprises six (6) Directors consisting of three (3) IndependentDirectors two (2) Whole-time Directors one (1) Managing Director.
Appointment/Reappointment/Resignation from Board of Directors/Key Managerial Personnel
Pursuant to the provisions of Section 152 (6) of Companies Act 2013 Mrs. Gita Lakra(DIN - 01067233)Whole Time Director will be retiring by rotation at the ensuring AnnualGeneral Meeting and being eligible has offered herself for re-appointment.
Ms. Shruti Gupta Company Secretary and Compliance Officer has resigned from currentpost with effect from 31st July 2019 and Mrs. Samridhi Seth was appointed asCompany Secretary and Compliance Officer with effect from 01st August 2019pursuant to provisions of Companies Act 2013 read with rule and regulations madethereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration of Independence from Mr. Vipin Kumar Sehgal Mr.Amit Gupta Mr. Baljit Kumar Trikha that the Independent Directors meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 and thrRegulation 16(1)(b) of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015.
During the year under review Board of Directors met nine (9) times and there was onemeeting of independent directors of the Company the details of which are mentioned givenin Corporate Governance Report. The provisions of Companies Act 2013 and ListingAgreement were adhered to while considering the time gap between two meetings.
COMMITTEES OF THE BOARD
The Board has constituted the following Committees pursuant to the requirements of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act2013
The Audit Committee was constituted accordance with the Section 177 of Companies Act2013 and Regulation 18 of SEBI (Listing Obligation and Disclosure Requirements)Regulation 2015. The Audit Committee provides reassurance to the Board on the Existenceof an effective internal control environment that ensures the efficiency and effectivenessof the operations of the Company and safeguarding of assets and adequacy of the provisionsfor all liabilities. The details of the meetings are included in the Corporate GovernanceReport.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee was constituted accordance with the Section178 of Companies Act 2013 and Regulation 19 of SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015. The Committee determines overall Companys policy onremuneration package and other terms and conditions of the appointment of ExecutiveDirectors and other senior management of the company as well as sitting fees toNon-Executive Directors of the Company. It also approves payment of remuneration ofManaging Director and Whole-Time Directors as decided by the members of the Company andrecommends to the Board of Directors for their consideration and approval. The details ofthe meetings are included in the Corporate Governance Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee was constituted accordance with the Section178 of Companies Act 2013 and Regulation 20 of SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015. The Company look after the grievances of the Stakeholdersand Redressal of Investors complaints related to transfer of Shares non-receipt ofBalance Sheet etc. The details of the meetings are included in the Corporate GovernanceReport.
Pursuant to the Section 134(3) of Companies Act 2013 andRegulations 17(10) of SEBI(Listing Obligation and Disclosure Requirements) Regulation 2015 the Board has carriedout annual performance evaluation of its own performance the directors individually aswell the evaluation of the working of its Audit Nomination & Remuneration andStakeholder committee. The manner in which the evaluation has been carried out has beenexplained in Corporate Governance Report.
The Performance of Board as whole and even Directors individually was found to besatisfactory.
As per applicable Regulations of SEBI (Listing Obligation and Disclosure Requirements)Regulation 2015 with the Stock Exchanges a separate section on Corporate Governancepractices followed by the Company together with a certificate from the CompanysStatutory Auditor confirming compliance forms an integral part of this Report.
Declaration by Managing Director that the Board Members and KMPs have complied with theCode of Conduct is also attached.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) That in the preparation of the annual financial statements for the year ended 31stMarch2019; the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31stMarch 2019.
c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) That the annual financial statements have been prepared on a going concern basis;
e) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
M/s. Mehta Sharma & Associates Chartered Accountants (Firm RegistrationNo.(018946N) Chartered Accountants had been appointed as Statutory Auditors of theCompany at the 17th Annual General Meeting held on 30.09.2015 to hold officefrom the conclusion of this Annual General Meeting till conclusion of 20thAnnual General Meeting of the Company for the year 2018-2019.
The Board of Directors in its meeting held on 24th August 2019 on therecommendation of Audit Committee has re-appointed M/s Mehta Sharma & AssociatesChartered Accountants (FRN: 018946N) as Statutory Auditor of the Company for a term oftwo years from the conclusion of 21st Annual General Meeting of the Company tothe conclusion of 23rd Annual General Meeting of the Company to conductStatutory Audit from the Financial Year 2019-20 till 2020-21.
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 hadappointed Narang G and Associates (CP No.: 16383 ACS: 43779)Company Secretaries for thefinancial year 2018-2019 to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report for the financial year ended 31stMarch 2019 isannexed.
M/s. Budh Kumar & Associates Chartered Accountant has been re-appointed asInternal Auditor in the Board meeting held on 30th May 2019 for the year2019-2020.
In terms of Section 148 of the Companies Act 2013 and rules made there under CostAudit is not applicable to the Company and its products/business.
EXPLANATION ON STATUTORY AUDITORS REPORT/SECRETARIAL AUDITORS REPORT
Neither the Statutory Auditor nor Secretarial Auditor of the Company in theirrespective reports have made any qualification reservation adverse marks or disclaimers.Accordingly no Explanations thereon are required to be furnished.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of Energy Technology Absorption Foreign Exchange Earnings and Outgostipulated under section 134(3)(m) of the Companies act 2013 read with rule 8 of theCompanies (Accounts) Rules 2014 is annexed.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as follows:
The Company has one Managing Director and the remuneration paid to him is Rs. 1.25 Lacper month only.
The Remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the Company.
The Board has on the recommendation of the Nomination & Remuneration committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
REMUNERATION TO DIRECTORS/EMPLOYEES AND RELATED ANALYSIS
During the year under review no employee of the Company received salary in excess ofthe limits as prescribed under the Act. Accordingly no particulars of employees are beinggiven pursuant to Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The detailspertaining to the ratio of the remuneration of each director to the median employeesremuneration and other prescribed details as required under section 197(12) of theCompanies Act 2013 read with rule 5(1) of the Companies (Appointment And Remuneration ofManagerial Personnel) Rules 2014 are annexed herewith and forms part of this report.
RELATED PARTY TRANSACTIONS
There were no contracts or arrangements entered into by the company in accordance withprovisions of section 188 of the Companies Act 2013.
However there were certain related party transactions in terms of regulation 23 of theSEBI (listing obligations and disclosure requirements) regulations 2015 which wereentered into on an arms length basis and were in the ordinary course of business.
There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large.
DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATES
The Company has no Subsidiary Joint Ventures or Associates.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed which forms an integral part of this Report and isalso available on the Companys website viz. www.superfineknitters.com.
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186
The Company has not given any loan or given guarantee for loans taken by others frombanks or financial institutions during the year. The Company has invested INR 53.90 lakhsin Mutual Funds during the year.
Further during the year a sum of INR 1.57 crore has been taken as unsecured loan fromMr. Ajit Kumar Lakra Managing Director Mr. Vivek Lakra Whole time Director and Mrs.Gita Lakra Whole time Director of the Company making a total of INR 2.51 Crores anddeclarations pursuant to Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules2014 have been received for the same.
The Company has not accepted any deposits during the year and no deposits remainedunpaid or unclaimed as at the end of the year under review and there has been no defaultin the repayments of deposits.
CORPORATE SOCIAL RESPONSIBILITY
Though the provisions of Companies Act 2013 regarding Corporate Social Responsibilityare not attracted to the Company yet the Company has been over the years pursuing aspart of its corporate philosophy an unwritten CSR policy voluntarily which goes muchbeyond mere philanthropic gestures and integrates interest welfare and aspirations of thecommunity with those of the Company itself in an environment of partnership for inclusivedevelopment.
CHANGE IN NATURE OF BUSINESS
During the year under review there was no change in the nature of business.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under review No Order has been passed by Regulators or Court orTribunals.
The well discipline workforce which has served the Company for three decades lies atthe very foundation of the Companys major achievements and shall well continue forthe years to come. The management has always carried out systematic appraisal ofperformance and imparted training at periodic intervals. The Company has always recognizedtalent and has judiciously followed the principle of rewarding performance.
RISK MANAGEMENT POLICY
Although the Company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion. Therefore in accordanceapplicable provisions of SEBI (Listing Regulation and Disclosure Requirements) Regulations2015 the Board members were informed about risk assessment and minimization proceduresafter which the Board formally adopted steps for framing implementing and monitoring therisk management plan for the Company. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving risks associated with the business. In order toachieve the key objective the policy establishes a structured and disciplined approach toRisk Management in order to guide decisions on risk related issues. In todayschallenging and competitive environment strategies for mitigating inherent risks inaccomplishing the growth plans of the Company are imperative. The common risks inter aliaare: Regulations competition Business risk Technology obsolescence Investmentsretention of talent and expansion of facilities. Business risk inter-alia furtherincludes financial risk political risk fidelity risk legal risk. As a matter of policythese risks are assessed and steps as appropriate are taken to mitigate the same.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The Internal Auditor of the Company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the Company.Even through this non-production period the Company continues to ensure proper andadequate systems and procedures commensurate with its size and nature of its business.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior the company has adopted a vigil mechanism policy.This policy is explained in Corporate Governance Report and also posted on the website ofcompany.
SEXUAL HARASSMENT PREVENTION
Super Fine Knitters Limited has implemented the sexual Harassment of women at workplace(Prevention prohibition and Redressal Act 2013. Internal Complaints Committees as perthe provisions of the act has been constituted. During the year Committee has not receivedany complaints of harassment.
The Composition of the Committee is as under:
1. Mrs. Gita Lakra Whole Time Director (also Presiding Officer)
2. Mr. Ajit Lakra Managing Director
3. Mrs. Kavita
4. Mr. Davinder Singh Chief FinancialOfficer
FINANCIAL VIABILITY OF COMPANY
The Company has not defaulted in repayment of dues to financial institutions banks andnot given any guarantee for loans taken by others from banks or financial institutionsduring the year
Directors state that no disclosure or reporting is required in respect of the followingitems as there were no transactions on these items during the year under review:
1. Issue of Equity Shares with differential rights as to dividend right issue.
2. Issue of Sweat Equity Shares to Employees of the Company.
3. Issue of Employee Stock Options to Employees of the Company.
4. Purchase of its own shares either directly or indirectly.
The Company has been very well supported from all quarters and therefore your directorswish to place on record their sincere appreciation for the support and co-operationreceived from Employees Dealers Suppliers Central and State Governments Bankers andothers associated with the Company. Your Directors wish to thank the banks financialinstitutions shareholders and business associates for their continued support andcooperation. We look forward to receiving the continued patronage from all quarters in theyears to come.
| || ||For and on behalf of the Board |
| || ||Super Fine Knitters Limited |
|Place: Ludhiana ||Ajit Kumar Lakra ||Vivek Lakra |
|Date: 24th August 2019 ||Managing Director ||Whole Time Director |
| ||DIN: 01067195 ||DIN: 01067219 |
| ||269 Industrial Area-A ||269 Industrial Area-A |
| ||Ludhiana 141003 ||Ludhiana 141003 |