Your Directors have pleasure in presenting the 38th Annual Report of theCompany together with audited accounts of the Company for the financial year ended 31stMarch 2020.
Financial results for the year under review are summarized below:
|Particulars ||2019-20 ||2018-19 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Income from operations ||28379.72 ||29550.55 |
|Other Income ||646.99 ||584.32 |
|Profit before Interest and Depreciation ||3432.39 ||3061.49 |
|Less: Interest ||843.11 ||711.28 |
|Profit/(Loss) before Depreciation ||2589.28 ||2350.21 |
|Less: Depreciation ||1935.85 ||1771.29 |
|Profit/(Loss) before Tax ||653.43 ||578.92 |
|Less: Exceptional item ||- ||- |
|(Add)/Less: Provision for Taxes ||9.48 ||(15.99) |
|Profit/(Loss) after Tax ||643.95 ||594.91 |
Your Directors recommend a dividend of Rs. 2.50 per equity share of Rs.10/- each forthe financial year ended 31st March 2020 subject to deduction of Tax atSource which if approved at the forthcoming Annual General Meeting will be paid to thoseequity shareholders whose names appear in the Register of Members as on 24thJuly 2020 in respect of shares held in physical form and in respect of shares held indematerialized form the dividend shall be paid on the basis of the beneficial ownershipas per the details furnished by the Depositories for this purpose at the end of businesshours on 24th July 2020.
SEGMENT WISE PERFORMANCE Agency Division
During the year under report this division has earned a revenue of Rs. 1166.62 Lakhsonly compared to Rs.1550.73 Lakhs in 2018-19 in view of the difficulties experienced bythe spinning mills and the resultant lower investment. Profit Before Tax was lower at Rs.313.78 Lakhs as against Rs. 598.79 Lakhs in the previous year.
Your company has modernized the spinning machines with new compact spinning systems atan investment of Rs. 1495.48 Lakhs. This has increased the compact spinning capacity to90% of the total spindleage.
The Revenue of the division was Rs. 25721.53 Lakhs as against Rs. 25964.36 Lakhs. TheProfit Before Tax was Rs. 655.16 Lakhs as against Rs. 359.09 Lakhs in the previous year.
The economy was on a down trend which resulted in very slow growth of capital goodsmanufacturing companies. Hence this division has earned lower revenue of Rs. 2058.24 Lakhsas against Rs. 2524.72 Lakhs. The division incurred a loss of Rs. 301.98 Lakhs as againsta loss of Rs. 373.26 Lakhs in 2018-19.
The Company has directly exported its products valued at Rs. 2045.16 Lakhs in 2019-20.Exports through merchant exports were Rs. 2174.89 Lakhs. The Company has fulfilled theentire Export obligation during the year.
The Government has imposed a nationwide lock down to control COVID-19 from March 242020 onwards. This has impacted the economic activities substantially. Only from 5thMay 2020 some relaxations have been announced. Your company has commenced operations from6th May 2020 with minimum work force. It is expected that it will take somemore time to achieve normal operations. These disruptions will certainly affect theperformance during the current year. However the second half of the year may offer someopportunities for exports. The domestic demand may also improve. Hence the performancewill improve in the later part of the year.
Sri. Ravi Sam Director (DIN : 00007465) retires by rotation at the ensuing AnnualGeneral Meeting being eligible offers himself for reappointment.
Sri. J. Raghupathy Sri. S. K. Najmul Hussain retired on 26.08.2019. Sri. J. Raghupathywas inducted into the Board of your Company on 31st January 2007. During histenure he has served as Chairman of the Audit Committee Stakeholders RelationshipCommittee and Nomination and Remuneration Committee. With his in-depth technical andmarketing expertise he has guided the Company for its better performance.
Sri. S. K. Najmul Hussain was inducted into the Board of your Company on 20thJanuary 2014. During his tenure he has served as member of the Audit CommitteeStakeholders Relationship Committee Nomination and Remuneration Committee and CorporateSocial Responsibility Committee. With his in-depth technical expertise in the field oftextile engineering he has guided the Company for better performance.
The Board records its appreciation of their distinguished and dedicated guidance andvaluable contribution for the development and growth of the Company during their tenure ofoffice.
Industrial relations are cordial and your Directors appreciate the co-operationextended by the employees.
Your Company's shares are listed in BSE Limited. The listing fee to the BSE has beenduly paid. The shares are regularly traded in BSE Limited and were not suspended at anytime during the year.
SUPER SALES INDIA LIMITED
The Statutory Auditors M/s. Subbachar & Srinivasan Chartered Accountants wereappointed as Statutory Auditors for a term of five years commencing from the financialyear 2016-17 who will retire at the conclusion of the Annual General Meeting to be held inthe year 2021 and the shareholders have authorized the Board to fix the remunerationpayable to the auditors from time to time.
The first proviso to Section 139 of the Companies Act 2013 which mandated theratification of the appointment of Statutory Auditors at every subsequent Annual GeneralMeeting has been omitted by the Companies (Amendment) Act 2017 and the same was notifiedvide notification dated 07th May 2018. Hence ratification of the appointment ofStatutory Auditors is not placed to the shareholders. The auditors M/s. Subbachar &Srinivasan Chartered Accountants have confirmed their eligibility for continuing asStatutory Auditors of the Company.
As per the provisions of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 and terms of appointment M/s. Subbachar & Srinivasan CharteredAccountants will retire at the conclusion of the Annual General Meeting to be held in theyear 2021. Board is proposed to reappoint M/s. Subbachar & Srinivasan CharteredAccountants as Statutory Auditors of the Company for a further period of five years from2021-22 to 2025-26. A suitable resolution is placed to the shareholders at the ensuingannual general meeting for their reappointment.
Pursuant to provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Board of Directors on therecommendation of the Audit Committee has appointed Sri. G. Sivagurunathan CostAccountant as the Cost Auditor of the Company for the financial year 2020-21.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas appointed Sri. M.R.L.Narasimha Practising Company Secretary to undertake theSecretarial Audit of the Company for the financial year 2020-21.
The secretarial audit report in form MR3 obtained pursuant to Companies Act 2013 forthe financial year 2019-20 is enclosed as Annexure 2
Extract of the annual return as per the provisions of the Companies Act 2013 isenclosed as Annexure 1. The same will be posted in the Company's websitewww.supersales.co.in/corporate-financial-results.html The details of the meetings of theBoard and Committees and attendance of directors are given in the Corporate GovernanceReport.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 134 of the Companies Act 2013 the Directors of your Companyconfirm that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there are no material departures;
b. the directors had selected such accounting policies and applied them consistentlyand made judgements 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 profit and 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 had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and
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.
Independent Directors have met all the criteria of Independent Directors and they havegiven a declaration to the effect that they have met all the criteria of independentdirectors as prescribed in Section 149 of the Companies Act 2013 and the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.
The Salient features of the Nomination and Remuneration Policy is enclosed to thisannual report. Directors are eligible to get only sitting fee for attending the Board orCommittee or other meetings of Directors. Outstation directors are entitled to getreimbursement of out of pocket expenses incurred by them in connection with attending ofthe Board or Committee or other meetings.
There is no qualification reservation adverse remarks or disclaimer by the StatutoryAuditors in their audit report or Practising Company Secretary in his secretarial auditreport. The auditors have not reported any fraud to the Audit Committee or to the Board orto the Central Government during the financial year 2019-20.
Company has not provided any loans guarantees security under any Section 186 of theCompanies Act 2013 during the year under review. The Company has not made any investmentduring the financial year 2019-20.
All the transactions entered by the Company during the financial year 2019-20 with therelated parties are in the ordinary course of business and at Arm's length. The details ofmaterial related party transactions are given in form AOC - 2 as Annexure 3.
Board of Directors has decided to transfer Rs. 65 Lakhs out of profits for the year2019-20 to General Reserve.
There is no material change and commitment which have occurred between the end of thefinancial year and to the date of the report which affect the financial position of theCompany.
(A) Conservation of Energy
|i. the steps taken or impact of conservation of energy ||Energy efficient motors and replacement of tube lights with LED bulbs are in progress to reduce energy consumption. |
|ii. the steps taken by the Company for utilizing alternate source of energy ||The Company has utilized 48.84% of its energy requirements through wind power. |
|iii. the Capital investment on energy conservation equipments ||Rs. 73.10 Lakhs. |
(B) Technology absorption
|i. Efforts made towards technology absorption. ||During year under report the Company has added 16 new compact spinning frames and 9 retrofit compact systems to adopt the latest technology in spinning at a cost of Rs. 1495. 48 Lakhs. |
|ii. Benefits derived like product improvement cost reduction product development import substitution etc. ||Higher strength and lesser hairiness the compact yarn is used in Air jet looms to get better cloth finish. This enhances the marketability of our yarn. |
|iii. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year) ||- |
|(a) Details of technology imported. || |
|(b) Year of import. ||- |
|(c) Whether the technology been fully absorbed? ||- |
|(d) If not fully absorbed areas where this has not taken place reasons there for and future plans of action. ||- - |
|iv. The expenditure incurred on Research & Development. ||- |
(C) Foreign exchange earnings and out go
The Foreign Exchange earnings and outgo during the year under review were as follows:
|Foreign Exchange Earned ||: ||Rs. ||1811.99 ||Lakhs |
|Foreign Exchange Outgo || || || || |
|Raw Material imports ||: ||Rs. ||977.93 ||Lakhs |
|Stores and Spares imports (including advances) ||: ||Rs. ||16.43 ||Lakhs |
|Capital Imports ||: ||Rs. ||203.41 ||Lakhs |
|Others ||: ||Rs. ||1.60 ||Lakhs |
| ||: ||Rs. ||1199.37 ||Lakhs |
The Company has established a risk management frame work to identify evaluate thebusiness risks and opportunities. The main object of the framework is to minimise theadverse impact of the risks by taking effective mitigating measures to retain the businessadvantages. The identified risks and mitigation measures are reviewed by the concernedHeads and all the risks identified and mitigation measures are placed before the Board.Board is of the opinion that there is no risk which affects the existence of the Company.
The CSR Committee consists of four directors out of which three are independentdirectors. The Board has approved the CSR Policy and the same is posted in the website ofthe Company http:// www.supersales.co.in/policies.html. As per the policy Company canspend the amount required to be spent under Corporate Social Responsibility to any of theProjects or activities covered under Schedule VII (as amended from time to time) based onthe recommendation of the CSR Committee and approved by the Board. The amount can be spentanywhere in India however preference shall be given for the geographical locations wherethe Company's operations are located. The amount required to be spent under CSR activitiesmay be spent by the Company itself or contributed to any trust which is having establishedtrack record as recommended by the CSR Committee and approved by the Board. The CSRCommittee shall periodically review and monitor the expenditure made on various projectsor activities as approved by the Board. The Company has spent the entire amount requiredto be spent during the financial year 2019-20. Annual Report on CSR activities is enclosedas Annexure 4.
DISCLOSURE UNDER RULE 8
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 the Board has carried out annualevaluation of its own performance that of its committees and individual directors for thefinancial year 2019-20. The Chairman of the Board has sent a list of criteria as approvedby the Nomination and Remuneration Committee for evaluation of the Board's performancethat of its committees and individual directors to all the Directors. Each Director hasevaluated based on the criteria and communicated the results of the evaluation to theChairman. There is no change in the nature of business. The Company has reappointed Smt.Vijayalakshmi Narendra as Independent director of the Company for a further period of fiveyears from 2nd February 2020. Sri. B. Lakshmi Narayana has been appointed asindependent Director of the Company for a period of five years with effect from 23rdOctober 2018 and Sri. G. Mani has been appointed as Managing Director of the Company fora period of three years from 24th October 2018.
There is no subsidiaries Joint ventures or Associates and there is no addition orcessation of Subsidiaries Joint ventures or Associates during the year 2019-20. TheCompany has not accepted or holds any deposit from the public or directors orshareholders. There is no significant material orders passed by the regulators or courtsor tribunals which affects the going concern status or operations in future.
The Company has implemented and evaluated the internal financial controls withreference to the financial statements which provide a reasonable assurance. The Directorsand Management confirm that the internal financial controls are adequate with respect tosize and operations of the Company. The Company has established adequate internal controlsystem which is commensurate with its nature and volume of operations. The accountingtransactions and operations are audited by the Internal Auditors viz-a-viz the internalcontrols policies and procedures and the deviations if any are reported and correctiveactions are taken appropriately.
Details of appointment reappointment of directors who retire by rotation are providedelsewhere in this report.
The Composition of the Audit committee is given in the Corporate Governance Report.Board has accepted all the recommendations made by the Audit Committee during thefinancial year 2019-20. In the preparation of financial statements no treatment differentfrom that of prescribed accounting standards has been followed. The Company has compliedwith the applicable secretarial standards. The Company has maintained all the costaccounts and records as specified by the Central Government under sub-section (1) ofsection 148 of the Companies Act 2013.
Particulars pursuant to Section 197(12) and the relevant rules are given in theAnnexure 5. The Company has transferred the equity shares and dividend in respect of whichdividend has not been claimed by the members for seven consecutive years or more to theInvestors Education and Protection Fund Authority (IEPF) as and when it is due fortransfer. The details of shares transferred have been uploaded on the website of theCompany.
The Company has established vigil mechanism and adopted whistle blower policy whichprotects persons who uses the mechanism from victimization and allows direct access to theChairman of the Audit Committee if required. The Policy is posted in the website of theCompany.
Based on the recommendation of the Nomination and Remuneration Committee the Board hasapproved the Remuneration Policy of the Company for selection and appointment ofDirectors senior management personnel their remuneration succession plans Boarddiversity. The salient features of same is enclosed as Annexure 6 to this report. Weblinkto access the policy is http://www.supersales.co.in/policies.html.
A certificate from the Statutory Auditors of the Company regarding compliance of theconditions of Corporate Governance is enclosed as Annexure 7.
Information pursuant to Rule 5 of the Companies (Appointment and Remuneration ofManagerial personnel) Rules 2014
In terms of Rule 5 of the Companies (Appointment and Remuneration of Managerialpersonnel) Rules 2014 the Company has no employee drawing salary exceeding Rs. 102 Lakhsper annum or Rs. 8.50 Lakhs per month during the year under review. No employee has drawnremuneration in excess of the remuneration drawn by the Managing Director and holds byhimself or along with his spouse and dependent children not less than two percent ofequity share capital of the Company.
List of top 10 employees based on salary drawn is enclosed as Annexure 8.
Company is not paying any commission to the directors and Whole Time Director /Managing Director.
Disclosures under the Sexual Harassment of women at work place (Prevention Prohibitionand Redressal) Act 2013
The Company has constituted Internal Complaints Committee under the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 to hear andredress the complaints if any received from women employees.
(a) number of complaints filed during the financial year - Nil
(b) number of complaints disposed of during the financial year - Nil
(c) number of complaints pending as on end of the year - Nil
In line with the requirement of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 Management Discussion and Analysis Report Corporate Governance ReportRelated Party disclosures are made part of the Annual Report.
A certificate from CEO/CFO interalia confirming the correctness of the financialstatements is also made part of the Annual Report.
The Directors place on record their sincere thanks to all the Principals for theirwhole hearted cooperation and to the bankers of the Company for their financialassistance. Directors also wish to thank the customers for their support and confidencereposed in the Company and to the employees at all levels for their cooperation anddedication.
|For and on behalf of the Board ||Coimbatore |
|(Sd.) SANJAY JAYAVARTHANAVELU ||25th May 2020 |
|Chairman || |
|DIN 00004505 || |