To the Members
The Directors hereby present the 59th Annual Report of the Super Spinning MillsLimited on the business and operations of your company along with audited financialstatements for the year ended 31st March 2021.
The summary of the financial performance of the Company for the year ended 31st March2021 is as follows.
|Particulars ||31.03.2021 ||31.03.2020 |
|Revenue from operation ||4888.42 ||14560.63 |
|Other Income ||542.34 ||443.40 |
|Total Revenue ||5430.76 ||15004.03 |
|Earnings before Finance ||628.95 ||(564.20) |
|Cost Depreciation & Tax || || |
|Less: Finance Cost ||575.73 ||880.50 |
|Earnings before ||53.22 ||(1444.70) |
|Depreciation & Tax || || |
|Less: Depreciation and amortization ||307.68 ||389.56 |
|Profit/ (Loss) before ||(254.46) ||(1834.26) |
|Exceptional Items & Tax || || |
|Add: Exceptional Items ||532.06 ||704.00 |
|Add: Profit from ||(546.85) ||- |
|Discontinued operations || || |
|Profit / (Loss) before Tax ||(269.25) ||(1130.26) |
|Less: Current and deferred Tax ||- ||- |
|Less: Income tax pertaining to earlier years ||519.91 ||- |
|Add : Other ||(173.47) ||(98.60) |
|Comprehensive Income || || |
|Profit / (Loss) after Tax ||(962.63) ||(1228.86) |
Review of business operations & Outlook for the current year
During the year under review your Company continued to operate below its normal ratedcapacity resulting in a lower turnover during the year. On account of severe workingcapital constraints the Company could not operate Super A and B units at its normal fullcapacity. SUPER A UNIT manufacturing facility had became uncompetitive and hence yourcompany took the decision of selling the Unit. Through Postal Ballot held on 5th August2020 the shareholders approval was obtained by the Company to sell its Manufacturing unitalong with 36.26 Acres of land situated at Company's SUPER A UNIT - Kirikera HindupurAndhra Pradesh ("Undertaking") together with all specified tangible andintangible assets in relation to the Undertaking (excluding its brand name and thespecific liabilities) to any prospective buyer.
Against the backdrop of the turbulence period your Company's total turnover has comedown drastically with only one unit running actively. There was a marginal profitof Rs. 53.22 lakhs for Earnings before depreciation and tax as against a loss ofRs. 1444.70 lakhs in the previous year. The overall after tax loss stood at Rs 962.63lakhs as against the loss of Rs 1228.86 in the previous year. Your Company is hoping for aimproved performance the coming year.
Change in the nature of business
There was no change in the nature of principal business of the Company during thefinancial year ended 31st March 2021.
Transfer to Reserves
During the year under review no amount has been transferred to general reserves.However the current year loss of Rs 789.16 Lakhs has been adjusted against the retainedearnings under the head "other equity".
Due to losses incurred by the Company during the year under review the Directors havenot recommended any Dividend for the year ended 31st March 2021.
The issued subscribed and paid-up share capital of the Company as on 31st March 2021stood at Rs.55000000/- divided into 55000000 equity shares of Re.1/- each. Duringthe year under review the Company has not made any fresh issue of shares.
Transfer of Unclaimed Dividend/ Shares 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 Annual Return of the Company for the Financial Year 2020-21 in the Prescribed FormMGT-7 as required under Section 92(3) of the Companies Act 2013 is available on thewebsite of the Company and can be accessed on the Company's website at the link https://www.superspinning.com/wp-content/uploads/2021/08/ AnnualReturn2021.pdf
Board and Committee meetings
During the year under review Six meetings of the Board were held. For details ofmeetings of the Board please refer to the Corporate Governance Report which is a part ofthis report.
The details pertaining to the composition and meetings of the Audit Committee areincluded in the Corporate Governance Report which is a part of this report.
Statement of Compliance with Secretarial Standards
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable secretarial standards and such systems are adequate and operatingeffectively. The Company has duly complied with Secretarial Standards issued by Instituteof Company Secretaries of India on meeting of the Board of Directors (SS-1) and GeneralMeetings (SS-2).
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 stipulated in Section 149(6) ofthe Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Further they have also declared that they arenot aware of any circumstance or situation which exist or may be reasonably anticipatedthat could impair or impact their ability to discharge their duties with an objectiveindependent judgment and without any external influence. Based on the declarationsreceived from the Independent Directors the Board of Directors has confirmed that theymeet the criteria of independence as mentioned under Regulation 16(1)(b) of the SEBIListing Regulations and Rule 6 of Companies (Appointment and Qualification of Directors)Rules 2014 and that they are independent of the management.
Statement regarding opinion of the board with regard to integrity expertise andexperience (including the proficiency) of the independent directors appointed during theyear
Board of Directors have evaluated the Independent Directors appointed/ re-appointed andopined that the integrity expertise and experience (including proficiency) of theIndependent Directors is satisfactory.
Company's Policy Relating to Directors Appointment Payment of Remuneration and othermatters
The Company pursuant to the provisions of Section 178 of the Companies Act 2013 and interms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy onNomination and Remuneration for its Directors Key Managerial Personnel and SeniorManagement. The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure1 and can also be accessed on the Company's website at the link http://www.superspinning.com/wp-content/uploads/2019/03/ NominationAndRemunerationPolicy.pdf
Comments on Auditors' Report
There were no qualifications reservations adverse remarks or disclaimers made byM/s.Sethia Prabhad & Hedge Statutory Auditors and Mr.M.D.Selvaraj of MDS &Associates Secretarial Auditor in their report.
The Auditors report includes an emphasis of matter relating to COVID-19 Pandemic'simpact on company's financial performance which is given in the Note no: 52 to thefinancial statements.
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 the transactions entered into by the Company with related parties as defined underthe Companies Act 2013 and Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 during the financial year 2020-21 were in the ordinarycourse of business and on arms' length basis.
The particulars of contract and arrangement entered into by the Company with relatedparties referred to Section 188(1) of the Companies Act 2013 including certain arm'slength transactions under third proviso thereto are disclosed in Annexure 2 (FormNo. AOC-2) and forms part of this Report.
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 athttps://www.superspinning.com/wp-content/ uploads/2020/06/RPTpolicy_20200610.pdf
Material changes and commitments affecting the financial position of the company
Due to outbreak of COVID 19 pandemic and based on the directives of the Government ofIndia the operations of the Company was carried on in a phased manner with minimalworkforce by following requisite precautions/ guidelines. This has impacted the turnoverand profitability of the Company. Since March 2021 major parts of the Country wereaffected by the second wave of Covid-19.
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 recognizes that risk is an integral part of business and it is committed tomanaging the risks in a proactive and efficient manner. Keeping the same in mind theBoard of Directors of the Company has formulated the Risk Management Policy. The Companydoes not face any risk other than those prevalent in the industry and it has taken allpossible steps to overcome such risks. However some of the risks which may posechallenges are set out in the Management Discussion and Analysis Report which forms partof this report.
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 a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015to enable the directors and employees to report concerns about unethical behaviour actualor suspected fraud or violation of the company's code of conduct or ethics policy. TheWhistle Blower policy is available on the company's website and may be accessed throughthe link at http://www.superspinning.com/wp-content/uploads/2016/08/WhistleBlowerPolicy.pdf.
Corporate Social Responsibility initiatives
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview are set out in Annexure 4 of this report.
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 isresponsible for the implementation and effective monitoring of the CSR activities of theCompany.
Annual evaluation of the Board on its own performance and of the individual Directors
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act. Theperformance of the Board was evaluated by the Board after seeking inputs from all thedirectors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
In a separate meeting of independent directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and non-executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors. At the board meeting that followed the meeting of the independentdirectors and meeting of Nomination and Remuneration Committee the performance of theBoard its Committees and individual directors was also discussed. Performance evaluationof Independent Directors was done by the entire Board excluding the independent directorbeing evaluated.
Directors and Key Managerial Personnel
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. SanjayKrishna Ramamurthi (DIN: 08730627) Director of the Company retires by rotationand being eligible offers himself for reappointment. A resolution seeking shareholders'approval for his re-appointment forms part of the Notice. At the Board of Directorsmeeting held on 27th June 2020 Mr. Sanjay Krishna Ramamurthi (DIN: 08730627) wasappointed as the Additional Director of the Company. Subsequently in the Postal Ballotheld on 5th August 2020 the same was approved by the shareholders of the company.
Key Managerial Personnel of the Company required under Sec 2(51) and Section 203 of theCompanies Act 2013 are Mr. Sumanth Ramamurthi Chairman and Managing Director; Mr.Sathyanarayan Reddy Chief Financial Officer and Mrs. Narmatha G K Company Secretary.
Subsidiaries Joint Ventures and Associate Companies
The Company does not have any subsidiaries Joint Ventures or Associate Companies.
Since the Company has not accepted any fixed deposit covered under Chapter V of theCompanies Act 2013 there are no deposits remaining unclaimed or unpaid as on 31st March2021 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 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 and evaluated the Internal Financial Controls which providea reasonable assurance. During the year the Internal Auditor of the Company were assignedthe responsibility for ensuring and reviewing the adequacy of legal compliance systems inthe Company as required under the Companies Act 2013. The audit Committee of the Boardconstantly reviews the observations of the internal auditor with respect to the internalcontrol systems and their adequacy significant risk areas control mechanism and theoperations of the Company. It also discusses and implements the recommendations made forcorrective action through the internal audit reports. The Directors and Management confirmthat the Internal Financial Controls are adequate with respect to the operations of theCompany. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act 2013certifying the adequacy of Internal Financial Controls is annexed with the AuditorsReport.
Auditors a) Statutory Auditors
M/s.Sethia Prabhad Hegde & Co. Chartered Accountants (FRN 013367S) Bengaluruwere appointed as the statutory auditors of the company for a period of five years at the55th Annual General Meeting of the company held on 1st December 2017. Pursuant to theamendment of Section 139 of the Companies Act 2013 the company is no longer required toseek the ratification of the appointment of the auditor at every annual general meeting.
The company has received a certificate from M/s.Sethia Prabhad Hegde & Co.Chartered Accountants confirming that they are not disqualified from continuing asstatutory auditors of the company. b) Secretarial Auditors
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 year2020-21 is annexed herewith as Annexure 5 to this report.
Further the Secretarial Compliance Report for the year ended 31st March 2021 issuedby the Practicing Company Secretary pursuant to Regulation 24A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 has been filed with BSELimited and the National Stock Exchange of India Limited. A copy of the same is availableon the Company's website: www.superspinning.com c) Cost Auditors
Based on the recommendation of the Audit Committee the Board of Directors has appointedMr.R.Krishnan Cost Accountant (Membership No. 7799) as the Cost Auditor of the companyfor the financial year 2021-22. Pursuant to Section 148 of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 the remuneration payable to the CostAuditors is subject to the ratification of the members in a general meeting. The Boardrecommends the ratification of his remuneration. The Cost Audit Report for the financialyear 2021-2022 will be filed within the required period under Companies Act 2013.
Maintenance of cost records under sub-section (1) of Section 148 of the Companies Act2013
Pursuant to the provisions of Section 148(1) of the Companies Act 2013 read withCompanies (Cost
Records and Audit) Rules 2014 the Company was required to maintain cost records.Accordingly the company has duly made and maintained the cost records as mandated by theCentral Government.
Details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 during the year
No applications have been made and no proceedings are pending against the Company underthe Insolvency and Bankruptcy Code 2016.
Details of difference between amount of the valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof.
The disclosure under this clause is not applicable as the Company has not undertakenany one-time settlement with the banks or financial institutions.
Particulars of Employees
The details pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed herewith as Annexure 6 to this report.
A detailed review of the operations performance and future outlook of the Company andits businesses is given in the Management's Discussion and Analysis Report (Regulation 34of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015) whichforms part of this Report.
The Corporate Governance Report 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. A report of theStatutory Auditors of the Company confirming the compliance of conditions of CorporateGovernance as required by SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed to this report and forms part of this 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.
Internal Complaint Committee has been setup to redress complaints received regularly.There was no compliant received from any employee during the financial year 2020-21 andhence no complaint is outstanding as on 31st March 2021 for redressal.
The Company continues to enjoy the cordial relationship with its employees at alllevels.
Your Directors wish to place on record their appreciation of the confidence reposed bythe shareholders in the Company at all times. The Directors thank the Company's BankersFinancial Institutions Customers Vendors Investors Suppliers and Business Associatesfor their unstinted support. The Board of Directors also wishes to place on record theirappreciation for the contributions made by the employees towards the growth of theCompany.
| ||By Order of the Board |
| ||For Super Spinning Mills Limited |
| ||Sumanth Ramamurthi |
|Coimbatore ||Chairman & Managing Director |
|24th June 2021 ||DIN: 00002773 |