Super Spinning Mills Ltd Management Discussions

The US and European crisis, did not have much of an impact on the Indian financial sectors. The Indian economy continues to show strong resilience to external shocks like geo political tensions, Volatile Oil Prices, etc. Leasing sector, in India in recent years, has witnessed significant growth, due to increasing awareness about the benefits of leasing reflecting heightened activity and confidence among occupiers and investors.

According to several reports, large office space deals across key cities, particularly by multinational corporations, were a significant driver of this robust leasing activity. The strong year-on-year growth in fresh demand at a pan-India level indicates that occupiers are moving decisively with planned leases, underscoring the overall strength of the office market. In recent years, the flex-office segment has greatly benefited from a robust demand from IT/ITES for managed offices from both domestic and multinational businesses. The market in the South has been growing both in Commercial & Residential sectors over the years.

Review of Operations & Outlook for current year

The FY 2023-24 was a challenging year for the company. Your Company has taken major decisions such as the closure of textile business operations on during August 2023. Yarn Production of the Company was significantly affected from the mid of May 2023 owing to a major breakdown of machinery at the unit. After taking into consideration the factors necessary for the benefit of the Company and to preserve the value of the plant assets (being in shut down condition), the Board after evaluating various options, decided to sell the assets of the companys Manufacturing Division ie., plant and machineries in relation to the unit and obtained Shareholders approval for the same through Postal Ballot Notice dated 26.07.2023. Following the approval of the shareholders the Company entered into the necessary definitive agreements for the sale of the plant and machineries and executed the same in parts during the financial year 2023-24. Further, the Company has given specific properties on operating lease arrangements. Your Companys liabilities have significantly reduced and focus of the Company is shifting towards lease rental services. It is anticipated that the Company will experience a rapid recovery in the foreseeable future.

Opportunities & Threats

The changing nature of the real estate sector means there are several opportunities for Companies with commercial property. The demand for Commercial and Industrial spaces are increasing and your Company diligently safeguarded the assets in Hindupur and Coimbatore waiting for the right opportunity to invest, construct commercial properties, expand and optimize the returns to the stake holders. Also Leasing out commercial property can provide a steady stream of income for the company. However economic conditions, saturation of the commercial real estate market and other related expenses could pose a threat to the Company at large. Your company is hoping for a better future performance considering these factors.

Risks and concerns

The Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. In India, a real estate companys business is dependent on the easy availability of finance. An economic slowdown can result in fund shortages as lenders may want to act safe. The Companys strategy on focusing real estate activity for various geographical segments is exposed to economic and fluctuating market conditions. The Company continues to implement robust risk management policies that set-out the tolerance for risk management and the requisite mitigation plans.

Health, safety and Security Environment

Your Company has always been adopting all possible safety measures concerning the health and safety of the Workers and staffs at all levels. Your company is committed to providing all its employees with a healthy and safe work environment.

Human Resources/Industrial Relations

Industrial relations remained cordial during the period under review. Necessary measures are being adopted to improve the life, work culture, productivity, efficiency and effectiveness of the workers and staff at all levels. The Company has 5 employees on roll as on 31st March 2024.

Internal control systems and their adequacy

The internal financial control policies and procedures followed and adopted by the Company for ensuring orderly and efficient conduct of the business are adequate and operating effectively. The adequacy and effectiveness of the internal control systems is also being periodically reviewed by the Audit Committee of the company.

The Company has internal control policies and procedures commensurate with its size and the nature of its business. 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.

Discussion on financial performance with respect to operational performance

Directors Report contains details pertaining to the financial and operational performance of the company for the financial year 2023-24. Further, the audited financial statements, which has been prepared in accordance with the requirement of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, discloses a true and fair view of the performance of the company during the said period.

Segment-wise or product-wise performance

At present, the Company is engaged only in the business of real estate activities and there is no other separate reportable segment.

Details of Key Financial ratios

S. No	Description	Unit of Measurement	31.03.2024	31.03.2023	Variation in %	Reason
1.	Debtors Turnover	In Days	102	19	436.84%	The variation in the Debtor Turnover Ratio is on account of the textile operations being discontinued in the current year
2.	Inventory Turnover	In Days	123	60	105.00%	The variation is on account of the textile operations being discontinued in the current year.
3.	Interest Coverage Ratio	In Multiple	(0.44)	(0.26)	66.77%	The variation is on account of the excessive loss in the current Year compared to the losses in the previous Year
4.	Current ratio	In Multiple	0.71	0.82	-13.41%	-
5.	Debt Equity ratio	In Multiple	0.39	0.49	-13.41%	-
6.	Operating Profit Margin %	In %	(13.05%)	(11.60%)	12.50%	-
7.	Net Profit Margin (%)	In %	(126.18%)	(22.87%)	451.73%	The variation is on account of the excessive loss in the current Year compared to the losses in the previous Year.
8.	Return on Networth	In %	(25.53%)	(21.92%)	16.46%	-