The Shareholders Superhouse Limited Kanpur.
The Board of Directors are pleased to present the Company's Thirty-Ninth Annual Reportand the Company's audited financial statements (standalone and consolidated) for thefinancial year ended March 31 2019.
The Company's financial performance for the year ended March 31 2019 is summarisedbelow:-
| || ||STANDALONE || ||CONSOLIDATED |
|PARTICULERS ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
| ||Lakhs ||Lakhs ||Lakhs ||Lakhs |
|Revenue from Operations ||59410.96 ||56369.90 ||69440.01 ||64971.92 |
|Other Income ||620.01 ||1251.67 ||745.75 ||1571.33 |
|Profit/loss before Depreciation Finance CostsExceptional items and Tax Expense ||6081.40 ||5223.62 ||6643.62 ||6054.04 |
|Less: Depreciation/ Amortisation/ Impairment ||1410.57 ||1469.57 ||1538.06 ||1556.24 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense ||4670.83 ||3754.05 ||5105.56 ||4497.80 |
|Less: Finance Costs ||1760.32 ||1800.11 ||1935.55 ||2011.88 |
|Profit /loss before Exceptional items and Tax Expense ||2910.51 ||1953.94 ||3170.01 ||2485.92 |
|Add/(less): Exceptional items ||- ||- ||- ||- |
|Profit /loss before Tax Expense ||2910.51 ||1953.94 ||3170.01 ||2485.92 |
|Less: Tax Expense (Current & Deferred) ||996.67 ||664.49 ||1079.75 ||722.77 |
|Profit /loss for the year (1) ||1913.84 ||1289.45 ||2090.26 ||1763.15 |
|Total Comprehensive Income/loss (2) ||-3.48 ||8.89 ||-3.48 ||8.89 |
|Total (1+2) ||1910.36 ||1298.34 ||2086.78 ||1772.04 |
|Balance of profit /loss for earlier years ||13794.04 ||12628.39 ||16366.67 ||14792.54 |
|Less: Transfer to Reserves ||200.00 ||- ||200.00 ||- |
|Less: Dividend paid on Equity Shares ||110.25 ||110.25 ||110.25 ||158.23 |
|Less: Dividend Distribution Tax ||22.66 ||22.44 ||22.66 ||22.44 |
|Add: Share of profit (after tax) of Associates || || ||285.70 ||190.35 |
|Adjustement/related to investment properties || || ||7.81 ||-207.59 |
|Balance carried forward ||15371.49 ||13794.04 ||18414.05 ||16366.67 |
Dividend and Reserves:-
Your Directors are pleased to recommend a final dividend of Rs. 1/- per equity share(previous year Rs. 1.00 per equity share) on the equity share capital of the company forthe financial year ended 31 March 2019. The cash outflow on account of dividend on equitycapital will be Rs. 132.91 lacs (previous year Rs. 132.69 lacs) including dividenddistribution tax of Rs. 22.66 lacs (previous year Rs. 22.44 lacs).During the year underreview your company transferred a sum of Rs. 200 lacs to General Reserve (Previous yearRs. Nil).
The company has achieved the sales and other Income of Rs 600.30 crores against Rs.576.21crores reported last year. The Profit before tax was Rs. 29.11 crores and profitafter tax was Rs. 19.14 crores during the year under review as compared to Rs. 19.54crores and Rs. 12.89 cores respectively during previous year. Earnings per shareincreased from Rs. 11.70 per share during the previous year to Rs. 17.36 per share duringthe year under review. Further the company achieved the consolidated sales and otherIncome of Rs. 701.86 crores against Rs. 665.43 crores reported last year. The Profitbefore tax was Rs. 31.70 crores and profit after tax was Rs. 20.90 crores during the yearunder review as compared to Rs. 24.86 crores and Rs.17.63 cores respectively duringprevious year. The consolidated earning per share increased from Rs. 15.99 per shareduring previous year to Rs. 18.96 per share during the year under review.
The Company received best exporter award for overall export performance during 2017-18from Council for Leather Exporters Central Region Chennai. In addition to Export Awardin overall category the company also received the Best Exporter Award in Leather Footwearand Harness and Saddlery (Non Leather) and 2 prize for Industrial Leather Gloves. Furtherthe company also received State Export Award Uttar Pradesh 2018-19 for high exportperformance among all categories and for Leather and Leather Products.
Credit Rating :-
During the year under review the Company has sustained the Credit Rating "ICRABBB+" assigned by ICRA to its Long Term Bank facilities. Further the Rating of"ICRA2" assigned to the Short Term Bank facilities of your Company has also beenreaffirmed.
Material changes affecting the company:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this Report. There has beenno change in the nature of business of the Company.
Subsidiary Companies Joint Venture and Associate Companies:-
The Company is having seven subsidiary companies namely M/s Superhouse (UK) LimitedM/s Superhouse (USA) International Inc M/s Superhouse Middle East FZC M/s BriggsIndustrial Footwear Limited UK M/s Linea DeSeguridad S.L.U Spain M/s Superhouse GmbhGermany and LA Compagnie Francaise De Protection SARL and five Associates namely M/s UnnaoTanneries Pollution Control Company M/s Steven Construction Limited M/s AminInternational Limited M/s Knowldgehouse Limited and M/s Creemos International Limited.There is no joint venture of the company. During the year no company becomes or ceased tobe company's subsidiary joint venture or Associates Company.
The Company will make available the annual accounts of subsidiaries and the relatedinformation to any member of the Company who may be interested in obtaining the same. Theannual accounts of subsidiaries will also be kept for inspection by any member of theCompany at the registered office of the Company and that of the respective subsidiaries.The Financial Statements including Consolidated Financial Statement and separateFinancial Statement in respect of each of its subsidiaries have also been placed on thewebsite of the company. A statement containing salient features of the Financial Statementof subsidiaries/associates companies is forming part of the Annual Financial Statement.
The policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link:http://superhouse.in/pdf/Policy-for-determining-Material-Subsidiary.pdf.
Consolidated Financial Statement:-
In accordance with the provisions of the Companies Act 2013 ("the Act") andInd AS110-Consolidated Financial Statements read with Ind AS28-investments in Associatesthe audited consolidated financial statement are provided in the Annual Report.
Secretarial Standards :-
The Directors state that Secretarial Standards i.e. SS-1 SS-2 SS-3 and SS-4 relatingto 'Meetings of the Board of Directors''General Meetings' `Dividend' and Report of Boardof Directors respectively have been duly followed by the Company.
Directors' Responsibility Statement:-
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have 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 as at March 31 2019 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have 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 are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Management Discussion and Analysis:-
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V to the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 is presented in a separate section forming part of theAnnual Report.
During the year under review the company has taken necessary steps to comply with therequirements of the Corporate Governance Code and a Report on the Corporate Governanceforms part of this Report.
The requisite certificate from the Auditors of the Company confirming compliance withthe conditions of Corporate Governance is attached to the report on Corporate Governance.
Internal Financial Controls:-
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
Corporate Social Responsibility:-
The Corporate Social Responsibility Committee comprises Mr. Mukhtarul Amin ChairmanMr. Anil Kumar Agarwal Mr. Syed Javed Ali Hashmi and Mr. Dilip Kumar Dheer as members.The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board.
The Corporate Social Responsibility Policy may be accessed on the Company's website atthe link: http://superhouse.in/pdf/CSR-Policy.pdf.
To attain its Corporate Social Responsibility (CSR) objectives in a professional andintegrated manner the company has identified the promotion of Education Healthcare andEnvironment Sustain ability as its focus areas.
In Education the endeavors of the company are to spark the desire of learning andknowledge at every stage through quality primary education formal schools facility forpreparation of higher education and development of sports skills. The proper arrangementshave been made for free education of the financially weaker section of the society. Thecompany is also assisting in skill development by providing on the job and vocationaltraining.
In Healthcare the endeavors of the company are to eradicate hunger poverty andmalnutrition and promoting healthcare including preventive health care.
In Environmental Sustainability the endeavors of the company are:- 1. To ensureenvironmental sustainability by adopting best ecological practices and encouragingconservation/judicious use of water and other natural re-sources. 2. To use environmentfriendly and safe process in production. 3. To create a positive fast print within thesociety by creating inclusive and enabling infrastructure/environment for livablecommunities. 4. To run primary and secondary treatment plants for the disposal of effluentwaste.
During the year the Company spent Rs. 107.40 lacs (around 3.89% of the average netprofit of last three financial years) including Rs. 51.65 lacs unspent amount of previousyear on CSR activities. The Annual Report on CSR activities is annexed herewith markedas Annexure-I.
Directors and Key Managerial Personnel:-
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Zafarul Amin and Mr. Mohammad Shadab Directors of the Company retire byrotation at the ensuing Annual General Meeting and being eligible they offered themselvesfor re-appointment. No key managerial personnel was appointed or resigned duringthe year except Mrs Shahina Mukhtar resigned from the office of Wholetime Director of theCompany with effect from 15 June 2019 however she will continue as non-executivedirector of the company. The Terms of Appointment of Mr Mukhtarul Amin Chairman andManaging Direct ( DIN: 00012108) Mr Zafarul Amin Joint Managing Director (DIN:00015533) Mr Mohd Shadab Depuy Managing Director (DIN: 00098221) Mr Vinay SananExcutive Director (DIN: 00014536) and Mr Anil Kumar Agarwal Director Finance (DIN:00014645) will expire during current year. Your Board on the recommendation of theNomination and Remuneration Committee recommends the re-appointment of all of them inaccordance with the terms and conditions mentioned in the notice of forthcoming AnnualGeneral Meeting of the company read with explanatory statement annexed to the notice.
Mr. Syed Javed Ali Hashmi (DIN: 00014726) Mr. Dilip Kumar Dheer (DIN: 03341879) Mr.Anil Soni (DIN: 00023188) Mr. Nemi Chand Jain (DIN: 00031283) Dr. Krishan Kumar Agarwal(DIN: 00022719) and Mr. Kamal Agarwal (DIN: 00022904) were appointed as IndependentDirectors of the Company to hold office for 5(five) consecutive years up to 22 September2019. Pursuant to regulation 17(1A) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015
Mr. Nemi Chand Jain (Date of Birth 16 May 1939) ceased from the office of theIndependent and non-executive director with effect from 31 March 2019 as he has attainedthe age of 75 years. Mr. Nemi Chand Jain was further appointed as an additional director(Non-Executive and Independent) by the board of directors of the company with effect from1 April 2019 subject to the approval of shreholders by special resolution at theensuing annual general meeting.
The Board based on the performance evaluation and as per the recommendation of theNomination and Remuneration Committee considers that given their background andexperience and contributions made by them during their tenure the continued associationof all of them including Mr Nemi Chand Jain who has attained the age of 75 years wouldbe beneficial to the Company and it is desirable to continue to avail their services as anIndependent Directors. Your Board recommends to re-appoint Mr. Syed Javed Ali Hashmi (DIN:00014726) Mr. Dilip Kumar Dheer (DIN: 03341879) Mr. Anil Soni (DIN: 00023188) Mr. NemiChand Jain (DIN: 00031283) Dr. Krishan Kumar Agarwal (DIN: 00022719) and Mr. KamalAgarwal (DIN: 00022904) as an Independent Directors of the Company not liable to retireby rotation for a second term of 5 (five) consecutive years on the Board of the Company.The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Listing Regulations.
The details of programs for familiarization of Independent Directors with the Companytheir roles rights responsibilities with the Company the nature of the industry inwhich the Company operates the business model of the Company and related matters are alsoput up on the website of the Company at the link:http://superhouse.in/pdf/Familiarisation-Programme.pdf.
The Company has devised the following Policies/Criteria viz: a) Policy for selection ofDirectors and determining Directors' independence; b) Remuneration Policy for DirectorsKey Managerial Personnel and other employees and c) Criteria of making payments toNon-Executive Directors.The aforesaid policies/criteria are put up on the Company'swebsite and can be accessed athttp://superhouse.in/pdf/Policy-for-Selection-of-Directors.pdfhttp://superhouse.in/pdf/Remuneration-Policy-for-Directors.pdf andhttp://superhouse.in/pdf/Criteria-of-making-payments-to-Non-Executive- Directors.pdf.
The Policy for selection of Directors and determining Directors' independence sets outthe guiding principles for the NR Committee for identifying persons who are qualified tobecome Directors and to determine the independence of Directors in case of theirappointment as Independent Directors of the Company. The Policy also provides for thefactors in evaluating the suitability of individual Board members with diverse backgroundand experience that are relevant for the Company's operations. The Remuneration Policy forDirectors Key Managerial Personnel and other employees sets out the guiding principlesfor the NR Committee for recommending to the Board the remuneration of the Directors KeyManagerial Personnel and other employees of the Company. Criteria of making payment toNon-Executive Directors set out the guiding principles for the payment to Non-ExecutiveDirectors.
Meetings of the Board:-
Seven meetings of the Board of Directors were held during the year. The details of themeeting are given in the Corporate Governance Report.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the non-executive directors and executive directors. The Board has carriedout the annual performance evaluation of its own performance the Directors individuallyas well as the evaluation of the working of its Board Committees. A structuredquestionnaire was prepared after circulating the draft forms covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance. The performance evaluation of the Chairman and Managing Director and theNon-Independent Directors was carried out by the Independent Directors. The evaluation ofindependent directors was done by the entire board of directors which include performanceof the directors fulfillment of the independence criteria and their independence from themanagement. The Directors express their satisfaction with the evaluation process.
Contracts and Arrangements with Related Parties:-
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://superhouse.in/pdf/Policy-on-Materiality.pdf
There were no materially significant related party transactions which could havepotential conflict with interest of the Company at large.
Your Directors draw attention of the members to Note 47 to the financial statementwhich sets out related party disclosures. Further notice of annual general meeting readwith explanatory statement provid the details of contract or arrangement entered/to beentered into with related party along with the justification for entering into suchcontract or arrangement.
Investor Education and Protection Fund (IEPF)
In compliance with the provisions of Sections 124 and 125 of the Companies Act 2013read with the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 ('IEPF Rules') as amended from time to time the Companyhas deposited a sum of Rs. 1845666.00/- into the specified bank account of the IEPFGovernment of India towards unclaimed / unpaid dividend amount for the financial yearended 31 March 2011.
As per the said Rules the corresponding equity shares in respect of which Dividendremains unclaimed / unpaid for seven consecutive years or more are required to betransferred to the Demat Account of the IEPF Authority. During the year under review theCompany has transferred 100947 underlying Equity Shares to the Demat Account of the IEPFAuthority in compliance with the aforesaid Rules.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review there were no significant material orders passed by theRegulators / Courts and no litigation was outstanding as on March 31 2019 which wouldimpact the going concern status and future operations of your Company. The details oflitigation on tax matters are disclosed in the Auditor's Report and Financial Statementswhich forms part of this Annual Report.
The details about the development and implementation of risk management policy of thecompany including elements of risk are given in the Corporate Governance Report.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulations includes an Ethics & Compliance Task Forcecomprising senior executives of the Company. Protected disclosures can be made by awhistle blower through an e-mail or dedicated telephone line or a letter to the TaskForce or to the Chairman of the Audit Committee. The vigil mechanism and whistle blowerpolicy may be accessed on the Company's website at the link:http://superhouse.in/pdf/Vigil-Mechanis-and-Whistle-Blower-Policy.pdf
Particulars of Loans given Investments made Guarantees given and Securitiesprovided:-
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Standalone Financial Statement.
Annual Return: -
Extract of Annual Return of the Company is annexed herewith as Annexure II to thisReport. Further as required under section 134(3)(c) of the Companies Act 2013 theAnnual Return is put up on the Company's website and can be accessed athttp://superhouse.in/pdf/annualreturn.pdf.
Particulars of Employees and Related Disclosures:-
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees as required in the saidrules are provided in the Annual Report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report.
Conservation of Energy:-
Your Company is engaged in the manufacture of Finished Leathers Leather Goods andTextile Garments and consumption of energy in these industries is not significant ascompared to that of in other industries. However the Company is making continuous effortsto conserve energy wherever possible by economizing on the use of power and fuel infactories and offices. The company is using electricity and generators as sources ofenergy. The company has not made specific capital investment for the reduction ofconsumption of energy.
The company is carrying on the research and development understanding the customerneeds and preferences for design quality and comfort on a regular way. Improvement ofoverall product performance by implementing the planned strategies bringing in newdevelopments and product improvements based on consumer research have helped your Companyto achieve excellent working results and improve the competitive strength of the company.The use of modern technology and newest materials not only guarantee world class qualityproducts at reasonable price but also caters to the fashion needs of the customers whilemeeting the ever changing market requirements.
The company has incurred expenditure of Rs. 45.66 lacs which are 0.07% of totalturnover for the Research and Development Activities during the year as compared to Rs.42.02 lacs which were 0.07% of total turnover incurred during the previous year.
The company is not using imported technology. However Imported Plants and Machineriesare also being used by the company.
Foreign Exchange Earnings & Outgo:-
Your company continues to enjoy the status of a Government of India Recognized TradingHouse. Continuous efforts are being made to identify the new markets. The company earnedForeign Exchange of Rs. 45398.44 lacs during the year in comparison to previous year ofRs. 43535.43 lacs. During the year the total Foreign Exchange outgo was Rs. 7903.59 lacsas compared to Rs. 6147.01 lacs during the preceding financial year.
M/s. Rajeev Prem and Associates Chartered Accountants were appointed as Auditors ofthe Company for a term of 5 (five) consecutive years at the Annual General Meeting heldon September 29 2017. They have confirmed that they are not disqualified from continuingas Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
The Board has appointed Mr. Gautam Kumar Banthia Practicing Company Secretary toconduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report forthe financial year ended March 31 2019 is annexed herewith marked as Annexure III tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section148(1) of the Companies Act 2013 and Rules framed thereunder with respect to theCompany's nature of business.
The Audit Committee Comprises Independent Directors namely Mr. Dilip Kumar DheerChairman Mr. Anil Kumar Agarwal Mr. Syed Javed Ali Hashmi and Mr. Kamal Agarwal asmembers. All the recommendations made by the Audit Committee were accepted by the Board.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter Vof the Act.
2. Issue of equity shares with differential rights as to dividend voting orotherwise.
3. Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme. There is no change in the Capital Structure of the Company during theYear.
4. The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.
5. Neither the Managing Director nor the Whole-time Directors of the Companyreceived any remuneration or commission from any of its subsidiaries except Mr. MukhtarulAmin Chairman and Managing Director of the company received remuneration/commission ofRs. 6.88 lacs from M/s Briggs Industrial Footwear Limited U. K. subsidiary of thecompany during the year (previous year 10.22 lacs).
6. The company has no information about any Corporate Insolvency ResolutionProcess initiated against the Company under the Insolvency and Bankruptcy Code 2016.
7. No fraud was reported by the auditors under sub-section (12) of Section 143.
Prevention of Sexual Harassment at the Workplace
The company has in place a Policy for prevention of Sexual Harassment at the Workplacein line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. Internal Complaints Committee (ICC)has been set up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. During theyear under review there was no complaint filed pursuant to the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany's executives staff and workers.
| ||For and on behalf of the Board |
|Place : KANPUR ||MUKHTARUL AMIN |
|Date : 06 July 2019 ||Chairman |