Super Spinning Mills Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present the 56th Annual Report of the Company along with audited financial statements for the year ended 31st March, 2018.

Financial Highlights :

The summary of the financial performance of the Company for the year ended 31st March 2018 is as follows.

(Rs. in Lakhs)

Particulars 31.03.2018 31.03.2017
Revenue from operation 26,087.92 29,417.96
Other Income 273.83 1,273.10
Total Revenue 26,361.75 30,691.06
Earnings before Finance Cost, Depreciation & Tax (222.49) 1,454.61
Less: Finance Cost 1,381.73 1,711.23
Earnings before Depreciation & Tax (1604.22) (256.62)
Less: Depreciation and amortization 554.82 796.58
Profit/(Loss) before Tax (2,159.04) (1,053.20)
Less: Current and deferred Tax - (243.93)
Profit/(Loss) after Tax (2,159.04) (1,297.13)

Review of business operations

During the year under review your Company has achieved a total turnover of Rs.26,087.92 Lakhs and incurred loss of Rs. 2,159.04 Lakhs as against the previous year turnover of Rs.29,417.96 Lakhs and the loss of Rs.1,297.13 Lakhs. Your Directors are confident that the 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 the financial 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. 2,159.04 Lakhs has been adjusted against the retained earnings under the head other equity.

Dividend

Due to losses incurred by the Company during the year under review the Directors have not recommended any Dividend for the year ended 31st March 2018.

Share Capital

The issued, subscribed and paid-up share capital of the Company as on 31st March 2018 stood at Rs.5,50,00,000/- divided into 5,50,00,000 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 to be transferred during the year to the Investor Education and Protection Fund established by 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 is furnished 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 Audit Committee, 3 meetings of Nomination and Remuneration Committee and 5 meetings of Stakeholders Relationship Committee were held. Further details of the same have been enumerated 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 of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

Directors Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from those standards;

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 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) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively and

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.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies 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 the Companies Act, 2013.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company for the financial year 2017-18, confirming that they meet the criteria of independence as prescribed both under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013.

Companys Policy Relating to Directors Appointment, Payment of Remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure 2 and can also be accessed on the Companys 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 Companies Act, 2013

During the year under review the Company has not granted any loans or given any security or made any investments pursuant to the provisions of Section 186 of the Companies Act, 2013. However, the details in respect of investments made by the Company in the 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 Act, 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the financial year 2017-18 were in the ordinary course of business and on an arms length basis. Since there are no transactions which are not on arms length basis and material in nature, the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.

The policy on related party transactions as approved by the Board of Directors of the Company has been uploaded on the companys website and may be accessed through the link at http://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 the Company which has occurred between the financial year ended 31st March 2018 and the date of the report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure 3 to this report.

Risk Management Policy of the company

The Company has a structured risk management policy. The Company does not face any risk other than those prevalent in the industry. The Company has taken all possible steps to overcome such risks. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

Audit Committee

The Company has constituted Audit Committee in accordance with Section 177 of the Companies Act, 2013. Kindly refer the Report on Corporate Governance for matters relating to the composition, meetings and functions of the committee.

The Board has accepted the Audit Committees recommendations during the year wherever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013, 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 of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to enable the directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the companys code of conduct or ethics policy. The policy also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower policy has been uploaded on the companys website and may be accessed through the link at http://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 the CSR activities to be undertaken by the Company in line with the provisions of Schedule VII of the Companies Act, 2013.

The Company was not required to spend on the Corporate Social Responsibility activities as the average net profits of the immediately preceding three financial years of the Company was in the negative.

The Annual Report on Companys CSR activities of the Company is furnished in the prescribed 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 Committee, the Board of Directors evaluated the performance of the Board, Committees, Independent Directors, Non-Independent Directors, Chairman and Managing Director. Based on that performance evaluation has been undertaken. A separate meeting of Independent Directors of the Company was held for this purpose.

Board of Directors

As per the provisions of Section 152 of the Companies Act, 2013, Mr. Sumanth Ramamurthi, Executive Chairman of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. A.S.Thirumoorthy resigned from the services as Managing Director and Director with effect from 31st May 2018. The Board of Directors wish to place on record their sincere appreciation for the valuable contributions made by Mr. A.S.Thirumoorthy during his decade of association with the Company.

Mr.A.R.Balasundharam was appointed as an Independent Director of the Company with effect from 1st June 2017. In his tenure as an Independent Director, Mr.A.R.Balasundharam has provided insights into the textile industry which have proved to be invaluable to the Company. Mr.A.R.Balasundharam has given a declaration dated 2nd May 2018 to the effect that he does not meet the criteria of independence as provided in Section 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 meetings held on 19th May 2018 have appointed Mr. A.R.Balasundharam as an Additional Director of the Company in the capacity of Non-Independent, Non-Executive director with effect from 20th May 2018 and he shall hold office upto the date of this Annual General Meeting. Accordingly, necessary resolution proposing the appointment of Mr. A R Balasundharam as a Non-Independent & Non-Executive Director of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the members.

The Board of Directors at their meeting held on 19th May 2018 on the recommendation of the Nomination and Remuneration Committee has redesignated Mr. Sumanth Ramamurthi 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 the Companies Act, 2013 are Mr. Sumanth Ramamurthi, Executive Chairman, Mr. A S Thirumoorthy, Managing Director, Mr.C Shankar, Chief Financial Officer and Ms. Ramaa Krishnakumar, Company Secretary.

Mr.A S Thirumoorthy, Managing Director and Mr.C Shankar, Chief Financial Officer of the Company had resigned from the services of the Company from May 31, 2018 and June 2, 2018 respectively.

Subsidiaries, Joint Ventures and Associate Companies

The Company does not have any subsidiaries, Joint Ventures or Associate Companies.

Fixed Deposits

The Company has not accepted or renewed any fixed deposits during the year under review and hence there were no unpaid deposits as on 31st March 2018.

Details of significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and Companys operation in future

There are no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and companys operation in future.

Adequacy of internal financial controls with reference to the financial statements

The Company has implemented adequate internal control systems to monitor internal business process, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The committee reviews the statutory auditors report, key issues, significant process and accounting policies.

The Directors and the Management confirms that the Internal Financial Controls (IFC) is adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

Auditors

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding rules framed thereunder, the Company has appointed Mr. M.D.Selvaraj, MDS & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit in Form No. MR-3 for the financial year 2017-18 is annexed herewith as Annexure 5 to this report.

Statutory Auditors

M/s Sethia, Prabhad Hegde & Co, Chartered Accountants, Bangalore has been appointed as the Statutory Auditors of the Company for a period of five years from the conclusion of 55th Annual General Meeting till the conclusion of 60th Annual General Meeting of the Company.

Vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with.

Accordingly, no resolution is being proposed for ratification of appointment of Statutory Auditors at the 56th Annual General Meeting.

Cost Auditors

On the recommendation of the Audit Committee, the Board of Directors has appointed Mr.R.Krishnan, Cost Accountant, (Membership No. 7799) as the Cost Auditor of the Company for the financial year 2018-19.

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is subject to the ratification of the members in a general meeting. The Board recommends the ratification of their remuneration.

Particulars of Employees

The details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure 6 to this report.

Corporate Governance

A report on Corporate Governance is annexed to and forms part of this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on Sexual Harassment of Women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has constituted an internal complaints committee to redress the complaints regarding sexual harassment. All employees are covered under this policy. The company has received few complaints and all the complaints are properly settled after conducting enquiry.

Personnel Relations

The Company continues to enjoy the cordial relationship with its employees at all levels.

Acknowledgements

Th Directors thank the Companys Bankers, Financial Institutions, Customers, Vendors, Investors, Suppliers and Business Associates for their unstinted support.

Your Directors wish to place on record their appreciation of the confidence reposed by the shareholders in the Company at all times.

The Board of Directors also wishes to place on record their appreciation for the contributions 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