The Shareholders Superhouse Limited Kanpur.
The Board of Directors are pleased to present the Company's Fortieth Annual Report andthe Company's audited financial statements (standalone and consolidated) for the financialyear ended March 31 2020
The Company's financial performance for the year ended March 31 2020 is summarizedbelow:-
|PARTICULERS || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
| ||Rs. in Lakhs ||Rs. in Lakhs ||Rs. In Lakhs ||Rs. in Lakhs |
|Revenue from Operations ||52036.33 ||59410.96 ||60867.22 ||69440.01 |
|Other Income ||1204.33 ||620.01 ||1297.97 ||745.75 |
|Profit/loss before Depreciation Finance Costs Exceptional items and Tax Expense ||5317.77 ||6081.40 ||5848.60 ||6643.62 |
|Less: Depreciation/ Amortization/ Impairment ||1372.58 ||1410.57 ||1477.56 ||1538.06 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense || || || || |
|Less: Finance Costs ||1510.16 ||1760.32 ||1693.39 ||1935.55 |
|Profit /loss before Exceptional items and Tax Expense ||2435.03 ||2910.51 ||2677.65 ||3170.01 |
|Add/(less): Exceptional items ||- ||- ||- ||- |
|Profit /loss before Tax Expense ||2435.03 ||2910.51 ||2677.65 ||3170.01 |
|Less: Tax Expense (Current & Deferred) ||4.80 ||996.67 ||53.23 ||1079.75 |
|Profit /loss for the year (1) ||2430.23 ||1913.84 ||2624.42 ||2090.26 |
|Total Comprehensive Income/loss (2) ||-39.73 ||-3.48 ||-39.73 ||-3.48 |
|Total (1+2) ||2390.50 ||1910.36 ||2584.69 ||2086.78 |
|Balance of profit /loss for earlier years ||15371.19 ||13794.04 ||18414.05 ||16366.67 |
|Less: Transfer to Reserves ||100.00 ||200.00 ||100.00 ||200.00 |
|Less: Dividend paid on Equity Shares ||110.25 ||110.25 ||110.25 ||110.25 |
|Less: Dividend Distribution Tax ||22.66 ||22.66 ||22.66 ||22.66 |
|Add: Share of profit (after tax) of Associates || || ||565.28 ||285.70 |
|Adjustment/related to investment properties || || ||-1.95 ||7.81 |
|Balance carried forward ||17529.08 ||15371.49 ||21329.16 ||18414.05 |
Dividend and Reserves: -
Your Directors are pleased to recommend a final dividend of Rs. 0.80/- per equity share(previous year Rs.1.00 per equity share) on the equity share capital of the company forthe financial year ended 31st March 2020. Dividend is subject to approval of members atthe ensuing annual general meeting and shall be subject to deduction of Income Tax atsource.
The company achieved the sales and other Income of Rs 532.40 crores against Rs. 600.30crores reported last year. The Profit before tax was Rs 24.35 crores and profit after taxwas Rs. 24.30 crores during the year under review as compared to Rs. 29.11 crores and Rs19.14 crores respectively during previous year. Earnings per share increased from Rs17.36 per share during the previous year to Rs. 22.04 per share during the year underreview. Further the company achieved a consolidated the sales and other Income of Rs621.65 crores against Rs. 701.86 crores reported last year. The Profit before tax was Rs26.78 crores and profit after tax was Rs 26.24 crores during the year under review ascompared to Rs. 31.70 crores and Rs. 20.90 crores respectively during previous year. Theconsolidated earning per share increased from Rs.18.96 per share during previous year toRs. 23.80 per share during the year under review.
The Company received best exporter award for overall export performance during 2018-19from Council for Leather Exporters Central Region Chennai. In addition to Export Awardin overall category the company also received the Best Exporter Award in LeatherFootwear Harness and Saddlery (Non Leather) and 2nd prize for Leather Goods and FinishedLeather.
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"ICR A2" assigned to the Short Term Bank facilities of your Company has alsobeen reaffirmed.
Material changes affecting the company:
Except COVID-19 impact on normal business by way of interruption in production salesand other operational activities due to lockdown instructions issued by the Central andState Government there has been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and date of thisReport. There has been no 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 De Seguridad 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 makeavailable the annual accounts of subsidiaries and the related information to any member ofthe Company who may be interested in obtaining the same. The annual accounts ofsubsidiaries will also be kept for inspection by any member of the Company at theregistered office of the Company and that of the respective subsidiaries. The FinancialStatements including Consolidated Financial Statement and separate Financial Statement inrespect of each of its subsidiaries have also been placed on the website of the company. Astatement containing salient features of the Financial Statement ofsubsidiaries/associates companies is farming 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 AS 110 - Consolidated Financial Statements read with Ind AS 28 -investments inAssociates the audited consolidated financial statement are provided in the AnnualReport.
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' andReport of Board of 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 2020 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 2020 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 (CSRCommittee) has formulated and recommended to the Board a Corporate Social ResponsibilityPolicy (CSR Policy) indicating the activities to be undertaken by the Company which hasbeen 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 SocialResponsibility (CSR) objectives in a professional and integrated manner the company hasidentified the promotion of Education Healthcare and Environment Sustainability as itsfocus areas. In Education the endeavors of the company are to spark the desire oflearning and knowledge at every stage through quality primary education formal schoolsfacility for preparation of higher education and development of sports skills. The properarrangements have been made for free education of the financially weaker section of thesociety. The company is also assisting in skill development by providing on the job andvocational training. In Healthcare the endeavors of the company are to eradicate hungerpoverty and malnutrition and promoting Healthcare including preventive health care. InEnvironmental Sustainability the endeavors of the company are:-
1. To ensure environmental sustainability by adopting best ecological practices andencouraging conservation/judicious use of water and other natural resources.
2. To use environment friendly and safe process in production.
3. To create a positive fast print within the society by creating inclusive andenabling infrastructure/environment for livable communities.
4. To run primary and secondary treatment plants for the disposal of effluent waste.During the year the Company has made the provision of Rs. 46.85 lacs (around 2% of theaverage net profit of last three financial years) for CSR expenditure. However the actualexpenditure of Rs. 25.33 lacs incurred during the year under review. Reason for notspending 2% of the average net profit of the last three financial year are given inAnnexure-I to this report.
Directors and Key Managerial Personnel:-
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Anil Kumar Agarwal and Mr. Yusuf Amin 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 Mr. Vinay Sanan resigned from the office of wholtime director of thecompany with effect from 01st October 2019 however he will continue as non-executivedirector of the company.
Mr. Ajai Kumar Sengar (DIN: 07238070) was appointed as Independent Directors of theCompany to hold office for 5(five) consecutive years up to 22nd September 2020.
The Board based on the performance evaluation and as per the recommendation of theNomination and Remuneration Committee considers that given his background and experienceand contributions made by him during his tenure the continued association of Mr. AjaiKumar Sengar (DIN: 07238070) would be beneficial to the company and it is desirable tocontinue to avail his services as an Independent Director.Your Board recommends tore-appoint Mr. Ajai Kumar Sengar (DIN: 07238070) as an Independent Director of theCompany not liable to retire by rotation for a second term of 5 (five) consecutive yearson the Board of the Company. The Company has received declaration from the IndependentDirector of the Company confirming that he meet the criteria of independence as prescribedboth under the Act and Listing Regulations.
The details of programmes for familiarization of Independent Directors with theCompany their roles rights responsibilities with the Company the nature of theindustry in which the Company operates the business model of the Company and relatedmatters are also put 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.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:-
Five 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 the linkhttp://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.
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 theCompany has deposited a sum of Rs. 1926401.00 into the specified bank account of theIEPF Government of India towards unclaimed / unpaid dividend amount for the financialyear ended 31st March 2012.
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 the Company has transferred 168 underlying Equity Sharesto the Demat Account of the IEPF Authority 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 2020 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.
Risk Management: -
The details about the development and implementation of risk management policy of thecompany including elements of risk are given in the Corporate Governance Report.
Vigil Mechanism: -
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 Securities provided:-
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. 69.53 lacs which are 0.13% of totalturnover for the Research and Development Activities during the year as compared to Rs.45.66 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 38762.04 lacs during the year in comparison to previous year of Rs.45398.44 lacs. During the year the total Foreign Exchange outgo was Rs 6777.38 lacs ascompared to Rs. 7903.59 lacs during the preceding financial year.
Statutory Auditors: -
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 2019-20. The Secretarial Audit Report forthe financial year ended March 31 2020 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 as othermembers. 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 V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme. There is no change in the Capital Structure of the Company during the Year.
4. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
5. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries except Mr. Mukhtarul AminChairman and Managing Director of the company received remuneration/commission of Rs. 9.02lacs from M/s Briggs Industrial Footwear Limited U. K. subsidiary of the company duringthe year (previous year Rs. 6.88 lacs).
6. The company has no information about any Corporate Insolvency Resolution Processinitiated 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 :14th August 2020 ||Chairman |