Your Directors are pleased to present the 56th Annual Report of the Company along withaudited financial statements for the year ended 31st March 2018.
Financial Highlights :
The summary of the financial performance of the Company for the year ended 31stMarch 2018 is as follows.
(Rs. in Lakhs)
|Particulars ||31.03.2018 ||31.03.2017 |
|Revenue from operation ||26087.92 ||29417.96 |
|Other Income ||273.83 ||1273.10 |
|Total Revenue ||26361.75 ||30691.06 |
|Earnings before Finance Cost Depreciation & Tax ||(222.49) ||1454.61 |
|Less: Finance Cost ||1381.73 ||1711.23 |
|Earnings before Depreciation & Tax ||(1604.22) ||(256.62) |
|Less: Depreciation and amortization ||554.82 ||796.58 |
|Profit/(Loss) before Tax ||(2159.04) ||(1053.20) |
|Less: Current and deferred Tax ||- ||(243.93) |
|Profit/(Loss) after Tax ||(2159.04) ||(1297.13) |
Review of business operations
During the year under review your Company has achieved a total turnover of Rs.26087.92Lakhs and incurred loss of Rs. 2159.04 Lakhs as against the previous year turnover ofRs.29417.96 Lakhs and the loss of Rs.1297.13 Lakhs. Your Directors are confident thatthe performance would be improved during the current financial 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 2018.
Transfer to Reserves
During the year under review no amount has been transferred to general reserves.However the current year loss of Rs. 2159.04 Lakhs has been adjusted against theretained earnings 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 2018.
The issued subscribed and paid-up share capital of the Company as on 31stMarch 2018 stood at Rs.55000000/- divided into 55000000 equity shares of Re.1/-each. During the year under review the Company has not made any fresh issue of shares.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
Since the Company has not declared any dividend since 2008-09 there was no amount tobe transferred during the year to the Investor Education and Protection Fund establishedby 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 6 meetings of the Board of Directors 6 meetings of AuditCommittee 3 meetings of Nomination and Remuneration Committee and 5 meetings ofStakeholders Relationship Committee were held. Further details of the same have beenenumerated in the Corporate Governance Report annexed herewith.
Statement on compliance with Secretarial Standards
The directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.
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 Companyfor the financial year 2017-18 confirming that they meet the criteria of independence asprescribed both under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and the Companies Act 2013.
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 on theCompany'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.Sethia Prabhad & Hegde 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 2017-18 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/PolicyOnRelatedPartyTransactions.pdf.
Material changes and commitments affecting the financial position of the company
There were no material changes and commitments affecting the financial position of theCompany which has occurred between the financial year ended 31st March 2018 andthe 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 asAnnexure 3 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 mechanismand also 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 athttp://www.superspinning.com/wp-content/uploads/2016/08/WhistleBlowerPolicy.pdf.
Corporate Social Responsibility initiatives
The Corporate Social Responsibility Committee comprises of Mr. C S K Prabhu Mr.Sumanth Ramamurthi and Mr. A R Balasundharam.
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 Company was not required to spend on the Corporate Social Responsibility activitiesas the average net profits of the immediately preceding three financial years of theCompany was in the negative.
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.
Board of Directors
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.
Mr. A.S.Thirumoorthy resigned from the services as Managing Director and Director witheffect from 31st May 2018. The Board of Directors wish to place on record theirsincere appreciation for the valuable contributions made by Mr. A.S.Thirumoorthy duringhis decade of association with the Company.
Mr.A.R.Balasundharam was appointed as an Independent Director of the Company witheffect from 1st June 2017. In his tenure as an Independent DirectorMr.A.R.Balasundharam has provided insights into the textile industry which have proved tobe invaluable to the Company. Mr.A.R.Balasundharam has given a declaration dated 2ndMay 2018 to the effect that he does not meet the criteria of independence as provided inSection 149(6) of the Companies Act 2013 upon receipt of the consultancy fees.
The Nomination and Remuneration Committee and the Board of Directors at their meetingsheld on 19th May 2018 have appointed Mr. A.R.Balasundharam as an AdditionalDirector of the Company in the capacity of Non-Independent Non-Executive director witheffect from 20th May 2018 and he shall hold office upto the date of this AnnualGeneral Meeting. Accordingly necessary resolution proposing the appointment of Mr. A RBalasundharam as a Non-Independent & Non-Executive Director of the Company has beenincluded in the Agenda of the Notice convening the Annual General Meeting for the approvalof the members.
The Board of Directors at their meeting held on 19th May 2018 on therecommendation of the Nomination and Remuneration Committee has redesignated Mr. SumanthRamamurthi as Chairman and Managing Director with effect from 1st June 2018.
Key Managerial Personnel
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.
Mr.A S Thirumoorthy Managing Director and Mr.C Shankar Chief Financial Officer of theCompany had resigned from the services of the Company from May 31 2018 and June 2 2018respectively.
Subsidiaries Joint Ventures and Associate Companies
The Company does not have any subsidiaries 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 2018.
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) isadequate with respect to the operations of the Company. A report of Auditors pursuant toSection 143(3) (i) of the Companies Act 2013 certifying the adequacy of InternalFinancial Controls is annexed with the Auditors Report.
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 year2017-18 is annexed herewith as Annexure 5 to this report.
M/s Sethia Prabhad Hegde & Co Chartered Accountants Bangalore has been appointedas the Statutory Auditors of the Company for a period of five years from the conclusion of55th Annual General Meeting till the conclusion of 60th AnnualGeneral Meeting of the Company.
Vide notification dated May 7 2018 issued by Ministry of Corporate Affairs therequirement of seeking ratification of appointment of statutory auditors by members ateach AGM has been done away with.
Accordingly no resolution is being proposed for ratification of appointment ofStatutory Auditors at the 56th Annual General Meeting.
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 2018-19.
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 a 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 its 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.
| ||For and on behalf of the Board |
| ||Sumanth Ramamurthi |
|Coimbatore ||Executive Chairman |
|19th May 2018 ||DIN: 00002773 |