Dear Shareholders,
rd
The Board of Directors of your Company is pleased to present the 43 Annual Report on
the business of the Company along with summary of financial statements for the year ended
31st March, 2023. The report is prepared in accordance with the provisions of the
Companies Act, 2013.
Financial Highlights
During the year under review, performance of your company is as under:
Particulars |
31.03.23 (Rs.in Lakhs) |
31.03.22 (Rs.in Lakhs) |
Profit before Finance Costs and Depreciation |
16.64 |
1441.07 |
Finance costs |
406.91 |
474.74 |
Depreciation |
141.88 |
177.20 |
(Loss) / Profit before taxation |
(532.15) |
789.13 |
Less:Current tax (MAT) |
- |
(122.26) |
MAT Credit Entitlement |
- |
- |
Excess Income Tax Provision Reversed |
5.61 |
- |
Deferred Tax |
193.92 |
(77.94) |
(Loss) / Profit after tax |
(332.62) |
588.93 |
Add:Other comprehensive income |
|
|
Remeasurement of post-employment benefit obligations |
(4.18) |
(46.86) |
Gain on fair value of investments |
0.46 |
0.24 |
Income tax relating to these items |
1.04 |
13.01 |
Total other comprehensive income for the year |
(2.68) |
(33.61) |
Total comprehensive (Loss) / income for the year |
(335.30) |
555.32 |
Earnings per share basic / diluted |
(7.76) |
13.74 |
Dividend
The Company is unable to declare any Dividend due to inadequacy of profits.
Review of Operations
During the year, the company has made a turnover of Rs.11721.04 (in lakhs) as against
Rs. 20447.86 (in lakhs) in the
previous year. The Companys Loss is Rs.335.30 Lakhs during the current year as
compared to profit of Rs.555.32
Lakhs last year. Due to the lack of market demand the business operations at the
manufacturing unit situated at
Veeranam(taken under lease) was closed from 11th January, 2023.
Managements Discussion and Analysis
As per the Regulation 34(1) (e) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 the
report on "Management Discussion and Analysis" forms an integral part of
Annual Report as Annexure-I
Deposits
Company has not accepted any deposits from public.
Directors and Key Managerial Personnel
I. Pursuant to the provisions of Section 152 of the Companies Act, 2013 Sri.A.Annamalai
(DIN: 00625832) retire by rotation and being eligible offers himself for reappointment and
the resolution is placed before the shareholders for approval. A brief resume, expertise,
shareholding in the company and details of other entities in which the director is
interested as stipulated under Regulation 36(3)(a) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and as per Secretarial Standard is provided in
the notice attached.
II. All the Directors of the Company have confirmed that they are not disqualified from
being appointed as directors in terms of Section 184(1) and Rule 9(1) of the Companies
Act, 2013.
III. Pursuant to Regulation 34(3) and Schedule V para Clause (10)(i) of SEBI( Listing
Obligation and Disclosure Requirements) Regulations, 2015 Certificate of Non
Disqualification of Directors is received from the Practicing Company Secretary CS M.R.L
Narasimha is attached as Annexure-VI
IV. Pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and any
other applicable provisions, if any, of the Companies Act, 2013 and the Companies
(Appointment and Qualification of Directors) Rules, 2014 and the applicable provisions of
Listing Regulations (including any statutory modification(s) or re-enactment thereof for
the time being in force), the approval of the Members of the Company be and is hereby
accorded for re-appointment of Smt. Sujatha Sivakumar (DIN No. 08536232) who has
submitted a declaration confirming the criteria of Independence under Section 149(6) of
the Companies Act, 2013 read with the Listing Regulations, as amended from time to time,
whose term shall not be subject to retirement by rotation, to hold office for 5 (five)
consecutive years on the Board of the Company for a term w.e.f. 25th September
2024 to 24th September 2029
Declaration by Independent Directors
The Company has received necessary declaration from each independent director under
Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence
laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI LODR.
During the year, the independent Directors were present in meeting of Independent
Directors. The Independent Directors assessed the quality, quantity and timeliness of flow
of information between the management and the Board and expressed that the Current flow of
information and contents were adequate for the Board to effectively perform its duties.
Familiarization Programmes
The Company had conducted various sessions during the financial year to familiarize all
the Directors including the Independent Directors with the updates of Company, their
rules, responsibilities in the Company, and the technology and the risk management systems
of the Company. Further, the Directors are encouraged to attend the training programmes
being organized by various regulators/ bodies/institutions on above matters.
Number of Board Meetings and Committee Meetings
• The Board meets four (4) times during the financial year on 27thMay
2022, 08th August 2022, 10th November 2022, 11th February
2023.
• The Audit Committee meets four (4) times during the financial year on 27thMay
2022, 08th August 2022, 10th November 2022, 11th February
2023.
• The Stakeholders Relationship Committee meets four (4) times during the
financial year on 27thMay 2022, 08th August 2022, 10th
November 2022, 11th February 2023.
• The Share Transfer Committee meets six (6) times during the financial year on 07th
April 2022, 27thJuly 2022 and 09thSeptember 2022, 03rd
November 2022, 15th December 2022, 24th February 2023.
• The Nomination and Remuneration Committee met one (1) time during the financial
year on 27th May 2022.
• The Independent Directors Meeting met one (1) time during the financial year on 11th
February 2023.
Statutory Auditors
The Companys Auditors, M/s. Gopalaiyer and Subramanian., Chartered Accountants,
Coimbatore, hold office for a term of five years (5) commencing from the financial year
2022-2027 till the conclusion of the 47th Annual General Meeting.
The Auditors Report for the year 2022-2023 does not contain any qualification,
reservation or adverse remark. The auditors report is enclosed with the financial
statements in the Annual Report.
Secretarial Auditor
As required under Section 204 of the Act, and Rules made there under CS M.R.L.
Narasimha, Practising Company Secretary was appointed to conduct the Secretarial Audit of
the Company for the financial year 2022-2023. The Secretarial Audit Report for the
financial year 2022-2023 forms part of the Annual Report as Annexure-VII to the
Boards Report.
Cost Auditor
Section 148 of the Companies Act, 2013 pertaining to audit of Cost Records is
applicable to the Company. Based on the recommendation of the Audit Committee, CMA
B.Venkateswar, Cost Accountant was appointed as Cost Auditor of the Company for the
financial year 2023-2024 and the remuneration payable to Cost Auditor is placed before the
Shareholders for ratification.
Internal Auditor
The Company has re-appointed CA H. Venugopal as the Internal Auditor of the Company for
a further period of one year for the financial year 2023-2024. The scope of work includes
review of process for safeguarding the assets of the Company, review of operational
efficiency, effectiveness of system and processes and assessing the strength and
weaknesses of internal control. Internal Auditor reports are placed before the Audit
Committee on a regular basis for taking suitable action for improvement, wherever
required.
Subsidiaries, Joint Ventures and Associates
The Company does not have any Subsidiary, Joint venture or Associate Company.
Corporate Social Responsibility
Separately give as ANNEXURE - IX Material Changes and Commitments
There have been no material changes and commitments between the end of financial year
(March 31, 2023) and the date of the report affecting the financial position of the
Company.
Adequacy of Internal Financial Controls and Internal Control System
The Company has in place adequacy internal financial controls with reference to
financial statements. During the year under review, such controls were tested and no
reportable material weakness in the design or operation was observed.
Company has established adequate Internal Control procedures, commensurate with the
nature of its business and size of its operations and for ensuring the orderly and
efficient conduct of its business for safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information. No fraud was reported during
the financial year.
The Company has appointed Internal Auditor to observe the Internal controls, whether
the work flow of organization is being done through the approved policies of the Company.
In every quarter during the approval of financial statements, Internal Auditors will
present the Internal Audit Report and Management Comments on the Internal Audit
observation.
Particulars of Loan, Guarantees and Investments under Section 186 - Details of Loan
Sl.
No |
Period of making Loan |
Details of Lender |
Amount in Rs. |
Purpose for which the loan is to be utilized by the recipient |
Time period for which it is given |
Date of BR |
Rate of interest |
1. |
01.04.2022 to 31.03.2023 |
Supreme Yarn Spinners Pvt Ltd Door No.181, VASANTHAM,
4th Cross Street, New Fairlands, Salem 636 016 |
15,00,61,000 |
Inter Corporate Loan |
Repayable on Demand |
27.05.2022 08.08.2022 10.11.2022 11.02.2023 |
6.35% |
2. |
01.04.2022 to 31.03.2023 |
Raja Yarn Private Ltd Door No.181, VASANTHAM, 4th Cross
Street, New Fairlands, Salem 636 016 |
12,20,64,500 |
Inter Corporate Loan |
Repayable on Demand |
03.06.2022 05.09.2022
10.11.2022 11.02.2023 |
3.20% |
Investment made under Section 186 of the Companies Act, 2013
Investment made by the Company is within the limits specified under Section 186 of the
Companies Act, 2013.
Significant & Material orders
No Significant and Materials orders have been passed by any Regulator or Court or
Tribunal which can have an impact on the going concern status and the Companys operations
in future.
Disclosure as required under Section 22 of Sexual Harassment of Workmen at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
As per the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints
Committee. During the Financial Year 2022-2023 no compliant was received before the
committee.
Conservation of Energy, Technology Absorption, Exports and Foreign Exchange earnings
and outgo.
The information on Conservation of Energy, Technology Absorption and Foreign Exchange
earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure - II
Corporate Governance
As per the new Regulation 27(2) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a Corporate Governance Report, together with the
Certificate from the Companys Auditors confirming the compliance of conditions on
Corporate Governance is given in Annexure-III
Copy of Annual Return
As per the requirements of Section 92(3) and Rule 12(1) of the Companies (Management
and Administration) Rules, 2014 (as amended), the copy of the Annual Return in the
prescribed Form MGT-7 for the financial year ended March 31, 2023 is placed on the
companys website www.sncmindia.com.
Contracts or Arrangements with Related Parties
Transactions entered with related parties have been explained in Form AOC - 2 -Annexure
- IV annexed with this report and forms part of this Report. Further, policy on
dealing with Related Party transactions has been uploaded on the Companys website
http.www.sncmindia.com.
Vigil Mechanism/Whistle Blower Policy
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013,
a Vigil Mechanism for Directors and employees to report genuine concerns has been
established.
The Vigil Mechanism Policy has been uploaded on the website of the Company at
http.www.sncmindia.com. The main objective of this policy is to ensure sustainable
business growth with stability and to promote a pro-active approach in reporting,
evaluating and resolving risks associated with the business. In order to achieve the key
objective, the policy establishes a structure and disciplined approach to risk management,
in order to guide decisions on risk related issues.
Audit Committee
Audit Committee is in existence in accordance with the provisions of Section 177 of the
Companies Act, 2013. The details relating to the composition, meetings, and functions of
the Committee are given in Corporate Governance Report. The Board has accepted
recommendations of Audit Committee, hence no disclosure required under Section 177(8) of
the Companies Act, 2013.
Risk Management Policy
As per the Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 the Board members were informed about risk assessment and minimization
procedures after which the Board formally adopted steps for framing, implementing and
monitoring the risk management plan for the company. All the results and evaluation has
been communicated.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance,
board committees and individual directors pursuant to the provisions of the Companies Act,
2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The performance of the board was evaluated by the board after seeking inputs from all
the directors on the basis of criteria such as the board composition and structure,
effectiveness of board processes, information and functioning, etc. as provided by the
guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on
January 5,2017
The performance of the committees was evaluated by the board after seeking inputs from
the committee members on the basis of criteria such as the Composition of committees,
effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of
individual directors on the basis of criteria such as contribution of the individual
director to the board and committee meetings like preparation on the issues to be
discussed, meaningful and constructive contribution and inputs in meetings, etc.
Nomination and Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee
framed the policy on directors appointment and remuneration, including criteria for
determining qualifications, positive attributes, independence of a director and other
matters as required under sub-section (3) of Section 178 of the Companies Act, 2013 which
have been outlined in Nomination & Remuneration policy forming part of this Report.
The details of Remuneration to Directors are given in Annexure-V
Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your
directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards has
been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of
the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets 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) have laid down internal financial controls to be followed by the Company and that
such internal financial controls are adequate and were operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
Particulars of Employees
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees
who are in receipt of remuneration in aggregate of more than Rs.1,02,00,000/- if employed
throughout the year or Rs.8,50,000/- per month if employed for part of the year.
Details of top 10 employees based on their salary are disclosed in Annexure-VIII.
Listing
The Equity Shares of the Company are listed in BSE Limited and the Company has duly
paid the Annual listing fees for the year 2022-2023
M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing
depository services through National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode
(De-mat) of our Shareholders and also is the Registrar for Share Transfer Services for
physical segment.
Compliance with Secretarial Standards
The Company has complied with applicable Secretarial Standards issued by the Institute
of Company Secretaries of India.
Acknowledgements
Your Directors wish to place on record their deep sense of appreciation for the
tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, and all
our suppliers and customers. The Board also wishes to place on record their appreciation
for the contribution made by the employees at all levels.
For and on behalf of the Board of Directors,
SD/-
P.Umayal,
Salem, Chairman cum Managing Director
22nd May 202
3 Din . 00110260
c-c- iviay L/111 . uuiiu^uu
+91-9892691696
