SUPER SALES INDIA LIMITED

Transcription

1 C O I M B AT O R E 2 9 T H A N N U A L R E P O R T

2 Regiered Office : 34A, Kamaraj Road, Coimbatore BOARD OF DIRECTORS Sri. R. Venkatrangappan (Chairman) Sri. C.B. Kariappa Sri. Ravi Sam Sri. Sanjay Jayavaranavelu Sri. R. Satagopan Sri. J. Raghupay AUDITORS M/s. S. Krishnamoory & Co., Chartered Accountants BANKERS Indian Overseas Bank Indian Bank IDBI Bank Limited REGISTRARS & SHARE TRANSFER AGENTS COMPANY SECRETARY Sri. S.K. Radhakrishnan S.K.D.C Consultants Limited rd "Kanapay Towers", 3 Floor, 1391/A1,Say Road, Ganapay, Coimbatore CONTENTS Page No. SUPER SALES INDIA LIMITED Notice Directors' Report Management Discussion & Analysis Report Corporate Governance Report Auditors' Report Balance Sheet Profit and Loss Account Schedules Accounting Policies Notes to e Accounts Cash Flow Statement

3 NOTICE TO SHAREHOLDERS NOTICE is hereby given at e 29 Annual General Meeting of e shareholders of Super Sales India Limited, Coimbatore will be held at 3.00 P.M on Thursday, e 11 Augu, 2011 at 'Nani Kalai Arangam', Mani Higher Secondary School, Pappanaickenpalayam, Coimbatore to transact e following business: ORDINARY BUSINESS: 1. To consider e Profit and Loss Account for e financial year ended 31 March, 2011, e Balance Sheet as at at date, e Report of e Board of Directors and e Report of e Auditors. 2. To declare a dividend. 3. To appoint a Director in e place of Sri. R. Satagopan, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in e place of Sri. R. Venkatrangappan, who retires by rotation and being eligible, offers himself for reappointment. 5. To appoint Auditors to hold office upto e conclusion of e next Annual General Meeting and to fix eir remuneration. SPECIAL BUSINESS: 6. To consider and if ought fit to pass e following resolution wi or wiout modification as a Special Resolution : RESOLVED at pursuant to e provisions of Section 31 and oer applicable provisions, if any, of e Companies Act, 1956 including any amendments, modifications and reenactments ereof e Articles of association of e Company be and is hereby amended/altered in e manner and to e extent set out herein below: a. The following Article 44 be added after e Article 43: Subject to e provisions of e Sections 77A, 77AA and 77B of e Companies Act, 1956 including any amendments, modifications and reenactments ereof, e Company be and is hereby empowered to buyback its own shares from time to time to e extent and in e manner permitted under e Company law and such oer regulations as may be applicable. b. The following Article 45 be added after e amended Article 44: Subject to e provisions of e Sections 78 and 100 to 104 of e Companies Act, 1956 including any amendments, modifications and reenactments ereof e Company may, from time to time, by Special Resolution reduce its capital or share premium account in any manner whatsoever including by paying off or canceling capital or share premium account which has been lo or is unrepresented by available assets or is superfluous or by reducing e liability on e shares or oerwise as may deem expedient and capital may be paid off up on e footing at it may be called up again or oerwise. The Board of Directors subject to e provisions of e Companies Act, 1956 are empowered to accept e surrender of shares. 7. To consider and if ought fit to pass e following resolution wi or wiout modification as a Special Resolution : RESOLVED at in supersession of e Special Resolution passed at e Annual General Meeting held on relating to e deliing of e equity shares of e Company from Madras Stock Exchange 2

4 Limited(MSE), consent of e Company be and is hereby accorded for e widrawal of e deliing application pending wi MSE in view of e benefits of continued liing in MSE. RESOLVED FURTHER at Board of Directors of e Company be and are hereby auorized to take necessary eps for e widrawal of e deliing application submitted to MSE. By Order of e Board Coimbatore 20 May, 2011 S. K. Radhakrishnan Company Secretary Notes: 1. A MEMBER WHO IS ENTITLED TO ATTEND AND VOTE AT THE ABOVE MEETING IS ENTITLED TO APPOINT A PROXY AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. 2. THE INSTRUMENT APPOINTING THE PROXY SHOULD BE LODGED WITH THE COMPANY NOT LESS THAN FORTY EIGHT HOURS BEFORE THE SCHEDULED COMMENCEMENT OF THE MEETING. 3. The Regier of Members and Share Transfer Books of e Company will remain closed from Tuesday, nd e 2 Augu, 2011 to Thursday, e 11 Augu, 2011 (bo days inclusive). The dividend as recommended by e Board, if sanctioned at e general meeting, will be paid to e shareholders whose names appear in e Regier of Members as on Thursday, e 11 Augu, 2011 in respect of shares held in physical form and in respect of shares held in dematerialized form, e dividend shall be paid on e basis of beneficial ownership as per e details furnished by e Depositories for is purpose at e end of business hours on Monday, e 1 Augu, Members are requeed to communicate eir change of address, if any, quoting eir folio numbers to our Regirars and Share Transfer Agents, M/s. SKDC Consultants Limited, "Kanapay Towers", rd 3 Floor, 1391/A1,Say Road, Ganapay, Coimbatore Similarly members holding shares in Demat form, shall intimate eir change of address, if any, to eir respective Depository Participants. 5. Pursuant to Section 205C of e Companies Act, 1956, all unclaimed dividends shall be transferred to e "Inveor Education and Protection Fund" of e Central Government after a period of 7 years from e date of declaration. Shareholders, who have not encashed eir dividend warrants for e years , , , , , and are requeed to write to our rd Regirars and Share Transfer Agents, M/s. SKDC Consultants Limited, "Kanapay Towers", 3 Floor, 1391/A1,Say Road, Ganapay, Coimbatore for claiming e dividend. Once e unclaimed dividend is transferred to e Inveor Education and Protection Fund, no claim can be made to e Company by e Shareholders ereafter. 6. Shareholders holding shares in e physical form and wish to avail Electronic Clearing Services (ECS) facility (subject to availability of e facility) may auorize e Company wi ECS mandate in e prescribed form (enclosed) and e same should be lodged wi e Regirars and Share Transfer Agents, M/s. SKDC Consultants Limited on or before 1 Augu, 2011 for payment of dividend for e year rough ECS. 7. Members who require any clarification on accounts or operations of e Company are requeed to write eir queries to e Company Secretary so as to reach him at lea one week before e meeting. The queries will be answered accordingly. 8. The Miniry of Corporate Affairs ("MCA"),Government of India, has taken a "Green Initiative in e Corporate Governance" by allowing paperless compliances by serving e documents viz. Notices for general meetings, Financial Statements, Annual Reports etc. rough electronic mode, for which e Company has to obtain addresses of its members. To take part in e above Green Initiative, we propose to send e above documents in electronic form to e addresses of e members. 3

5 In order to serve e documents in electronic mode, Members holding shares in physical form are requeed to communicate eir address quoting eir folio numbers to our Regirars and Share Transfer Agents. Similarly members holding shares in Demat form, shall intimate eir address to eir respective Depository Participants at e earlie. Kindly note at if shareholders ill wish to get hard copy of e above documents, e Company will send e same, at free of co, upon receipt of a reque from shareholders. Disclosures: Brief resume and e details of shareholding as required to be given under clause 49 of e Liing Agreement in connection wi e appointment, retirement and reappointment of NonExecutive Directors and Directors interse relationships are provided under Report on Corporate Governance. Explanatory atement in terms of Section 173 (2) of e Companies Act, 1956 Item No. 6 Companies are permitted to buy back eir own shares rough e Companies (Amendment) Act However ere is caveat at e Articles of Association of e Company should contain a suitable article enabling e Company to buy back. Present Articles of Association of e Company are not having e enabling provisions to buy back its shares. The Companies Act, 1956 permits reduction of share capital if ere is a provision in e Articles of Association. As ere is no provision in e Articles for reduction of share capital, a new Article 45 is proposed to be inserted to empower e Company to reduce e share capital. In order to insert e above enabling resolutions for buy back and for reduction of share capital of e Company an alteration to e articles of association is required. Board of Directors of e Company recommends e above resolution for e approval by e shareholders. Any alternation to e Articles of Association of e Company can be done in terms of e Section 31 of e Companies Act, 1956 only by means of a special resolution. Hence e resolution is proposed as a special resolution. Intere of Directors: None of e Directors of e Company is intereed or concerned in e resolution. Item No. 7 The Company had decided to deli e shares from Madras Stock Exchange Limited (MSE) at its Annual General Meeting held on as ere was no trading in e ock exchange. Based on e resolution deliing application was submitted to e Stock Exchange in October, 2009 which is ill pending wi em. MSE has approached e Company and informed at ey are taking eps for rearting e trading facilities and ey have also informed at MSE has entered into a Strategic arrangement wi e National Stock Exchange of India in terms of which e members of e MSE are allowed to trade in e National Stock Exchange platform. The continuous liing in MSE will add liquidity to our shares which is beneficial to our shareholders. The Board of Directors recommends adoption of e resolution. Intere of Directors: None of e Directors of e Company is intereed or concerned in e resolution. By Order of e Board Coimbatore 20 May, S. K. Radhakrishnan Company Secretary

6 DIRECTORS' REPORT SUPER SALES INDIA LIMITED Your Directors have pleasure in presenting e 29 Annual Report of e Company togeer wi audited accounts of e Company for e financial year ended 31 March, FINANCIAL RESULTS Financial results for e year under review are summarized below: ( in Millions) ( in Millions) Turnover Commission Receipts Oer Operating Income Oer Income Profit before Intere and Depreciation Less: Intere Profit before Depreciation Less: Depreciation Profit before Tax Less: Provision for Current Taxes Less: Provision for Deferred Taxes Profit after Tax Add: Balance in Profit & Loss Account Add: Prior year income Less: Prior year expenses Add: Excess provision for Tax Reversed/ Refund 0.12 Add / (Less): Prior year taxes 0.23 (1.84) Balance Available for Appropriation Appropriation: Proposed Dividend Tax on Dividend Transferred to General Reserve Surplus in Profit & Loss Account Carried over to Balance Sheet DIVIDEND Your Directors recommend payment of dividend of 10 / per equity share of 10/ each for e financial year ended 31 March, 2011, which if approved at e forcoming Annual General Meeting will be paid to ose equity shareholders whose names appear in e Regier of Members as on 11 Augu, 2011 in respect of shares held in physical form and in respect of shares held in dematerialized form, e dividend shall be paid on e basis of beneficial ownership as per e details furnished by e Depositories for is purpose at e end of business hours on 1 Augu, PERFORMANCE Agency Division The uptrend arted in e financial year has continued roughout e financial year The yarn price realisation was better in e year which helped e spinning mills to continue eir expansion and modernization programmes. This in turn improved e sales of e Textile Machineries of our principals. This division has arted a training center at Guntur, Andhra Pradesh to provide training to e technical personnel of e mills for effective utilization of e machines. This division earned a PBT of Millions, an increase of 62.92% over e previous year. 5

7 TEXTILE DIVISION SUPER SALES INDIA LIMITED The good demand for e yarn has helped is division to po impressive results in spite of e unprecedented high cotton co during e year under review. Bo turn over and profits have gone up to record levels. The textile division of e Company earned a PBT of Millions during e year under review compared to Millions in e previous year. WIND MILL DIVISION Your Company has replaced 12 numbers of old Wind Energy Generators (WEG) wi new machines for better generation and to reduce e maintenance co at our wind farms at Kammalapatti and Vadavedampatti villages at an invement of Millions during e year under review. The present total inalled capacity of is division is MW. The wind energy division has performed well in e financial year under review due to better wind and better grid availability and is division has earned a PBT of Millions during e year under review compared to Millions in e previous year.. ENGINEERING DIVISION The Gears unit has arted its operations from July, 2010 onwards and operations were abilized in e la quarter of e year under review. Some more machines will be imported for is unit during e current year to increase e production. During e year under review e unit has incurred a loss of Millions. EXPORTS The Company's exports include e supplies to merchant exporters to e tune of Millions (Previous year Millions). PROSPECTS Better Yarn price realisation, in spite of increase in e cotton prices, helped e entire textile indury to earn good profits during e year under review. Sudden fall in e cotton prices reflected in e yarn price realisation also. There is a glut in e yarn market and e movement of yarn is very poor. Higher co of power, employees co and e lower yarn prices are expected to reverse e trend and e prospects for e current year are not promising. This may affect e performance of e textile division as well as e agency division subantially in e coming mons. To meet e increase in e requirement of power by e induries, Government is taking all measures to utilize e full generation of wind power by eablishing e infraructure for better grid availability. The wind energy division is expected to continue its better performance. Gears unit is expected to improve its performance during e current year. DIRECTORS Sri. R. Satagopan and Sri. R. Venkatrangappan, Directors, retire by rotation at e ensuing Annual General Meeting, being eligible, offer emselves for reappointment. FIXED DEPOSITS There is no deposit remaining unclaimed at e end of e financial year The Company has complied wi all e provisions of Section 58A of e Companies Act, 1956 and Rules made ere under wi regard to acceptance of Deposits. 6

8 INDUSTRIAL RELATIONS SUPER SALES INDIA LIMITED Indurial relations are cordial in all e units and your Directors appreciate e cooperation extended by e employees. LISTING Your Company's shares are lied in Bombay Stock Exchange Limited and e liing fee has been duly paid. Madras Stock Exchange Ltd (MSE) has approached e Company and informed at ey are taking eps for rearting e trading facilities and ey have also informed at MSE has entered into a Strategic arrangement wi e National Stock Exchange of India in terms of which e members of e MSE are allowed to trade in e National Stock Exchange platform. The continuous liing in MSE will add liquidity to our shares which is beneficial to our shareholders. Therefore we wish to continue e liing wi Madras Stock Exchange Limited in order to extend e facility to e shareholders. It is proposed to seek approval of e shareholders in is regard in e ensuing Annual General Meeting. AUDITORS M/s. S. Krishnamoory & Co., Chartered Accountants, e retiring auditors have given e certificate pursuant to Section 224(1B) of e Companies Act, 1956 and are eligible for reappointment. COST AUDITORS Pursuant to e directives of e Central Government under e provisions of Section 233B of e Companies Act, 1956, Sri. R. Krishnan, Co Auditor has been appointed to conduct Co Audit relating to e Textile Division for e financial year INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 In terms of subsection (2A) of Section 217 of e Companies Act, 1956, e Company has no employee drawing salary exceeding Lakhs per annum or 5.00 Lakhs per mon during e year under review. Energy consumption particulars as required by Rule 2 of e Companies (Disclosure of Particulars in e Report of e Board of Directors) Rules, 1988 are given in e Annexure I attached. Technology absorption particulars as required under e Companies (Disclosure of Particulars in e Report of e Board of Directors) Rules, 1988 are given in e Annexure II attached. FOREIGN EXCHANGE EARNINGS AND OUT GO The Foreign Exchange earnings and outgo during e year under review were as follows: Foreign Exchange Earned : 5.83 Millions Foreign Exchange Outgo : Millions Foreign currency Term loan Repayment : Millions Capital goods imports (including advances) : Millions Foreign currency Term loan intere payment : 2.70 Millions Raw Material imports : Millions Stores and Spares imports (including advances) : 5.45 Millions Oers : 0.07 Millions 7

9 ADDITIONAL DISCLOSURES: SUPER SALES INDIA LIMITED In line wi e requirement of Liing Agreement wi e Stock Exchanges, Management Discussion and Analysis Report, Corporate Governance Report, a certificate from e Auditors of e Company regarding compliance of Corporate Governance and Related Party disclosures are made part of e Annual Report. A certificate from CEO/CFO, interalia, confirming e correctness of e financial atements is also made part of e Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT In compliance of Section 217(2AA) of e Companies Act, 1956, e Directors of your Company confirm at: all applicable Accounting Standards have been followed in e preparation of annual accounts and at ere is no material departure; such accounting policies have been selected and applied consiently and such judgements and eimates made are reasonable and prudent so as to give a true and fair view of e ate of affairs of e Company as at March 31, 2011 and of e profit of e Company for e year ended on at date; proper and sufficient care has been taken for e maintenance of adequate accounting records in accordance wi e provisions of e Act for safeguarding e assets of e Company and for preventing and detecting fraud and oer irregularities; e annual accounts have been prepared on a going concern basis. GENERAL The Directors place on record eir sincere anks to e Principals M/s. Lakshmi Machine Works Limited for e whole hearted cooperation and to e bankers of e Company for eir financial assiance. Directors also wish to ank e cuomers for eir support and confidence reposed in e Company and to e employees at all levels for eir cooperation and dedication. By Order of e Board Coimbatore 20 May, 2011 (Sd.) R. VENKATRANGAPPAN Chairman 8

10 ANNEXURE I FORM A (See Rule 2) Statement appended to e Directors' Report pursuant to Rule 2(A) of e Companies (Disclosure of Particulars in e Report of Board of Directors) Rules, 1988 and forming part of e Directors' Report for e year ended 31 March, A. POWER AND FUEL CONSUMPTION Electricity a. Purchased : Units 8,728,485 6,263,968 Total Amount 38,601,553 29,998,618 Rate / Unit b. Through own Generation: i. rough Diesel Generators 5,142,125 5,739,398 Units per litre of diesel oil Co / Unit ii. rough Wind Energy Generators 21,995,558 22,349,321 Co / Unit Coal (Specify quality and where used) 3. Furnace Oil 4. Oer / Internal generation (Please give details) B. CONSUMPTION PER UNIT OF PRODUCTION Product name Grey Yarn (Kg) 5,219,448 4,990,830 Consumption per kg Electricity (units) : Furnace Oil Coal Oers (Specify) Processed Yarn (Kg) 62,087 Consumption per kg Electricity (units) : 3.87 Furnace Oil Coal Oers (Specify) 9

11 ANNEXURE II FORM B (See Rule 2) Form for disclosure of particulars wi respect to absorption. Research and development (R & D) 1. Specific areas in which R & D carried out by e Company. : 2. Benefits derived as a result of e above R&D : 3. Future plan of action : 4. Expenditure on R & D : : (a) Capital (b) Recurring (c) Total (d) Total R & D expenditure as a percentage of total turnover Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards technology absorption, adaptation and innovation. : 2. Benefits derived as a result of e above efforts, e.g., product improvement, co reduction, product development, import subitution, etc., : 3. In case of imported technology (imported during e la 5 years reckoned from e beginning of e financial year) following information may be furnished : (a) Technology imported. (b) Year of import. (c) Has technology been fully absorbed? (d) If not fully absorbed, areas where is has not taken place, reasons ere for and future plans of action. 10

12 MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMY OVER VIEW: SUPER SALES INDIA LIMITED The Advanced Economies have regiered a grow of 3 % in IMF has projected a GDP grow of 2.4 % for for e advanced economies. The IMF opined in its report at activities in e advanced economies has moderated less an expected. Unemployment is ill high and renewed resses in e euro area periphery are contributing to downside risks. Emerging economies regiered a grow of 7.3 % in and projected grow rate for is 6.5 %. Asia regiered a grow of 8.3% in , IMF projected an average GDP grow for Asia at 7% for Economic grow in Asia was expected to remain robu, fueled by bo exports and domeic demand, but new risks have emerged. CPI inflation has accelerated since October, 2010 and while is initially reflected higher commodity prices, now e pressures have spilled over into core inflation. The Government forecas at Indian economy to grow at e rate of 8% in The overall Index of Indurial out put during is 7.8% as again 10.5% of e previous year. The manufacturing sector has regiered grow of 8.1% in as again 11.0 % during Cotton textile sector has grown by 10.1 % during OPPORTUNITIES AND THREATS: Opportunities: 1. The announcement of new TUF scheme wi an allocation of 1,960 Crores towards subsidy for is expected to help us to increase e textile machinery sales. 2. Normal monsoon is predicted by e Meteorological department and hence e cotton production is expected to be good. Threats: 1. Allowing e export of raw cotton during e beginning of e season will affect e domeic supply which in turn results in higher cotton price. 2. Pollution problems, power cut and shortage of workforce in down ream induries may affect e demand for yarn. 3. Raising inflation in India may affect e consumption pattern. SEGMENT WISE PERFORMANCE: PERFORMANCE Agency Division The uptrend arted in e financial year has continued roughout e financial year The yarn price realisation was better in e year which helped e spinning mills to continue eir expansion and modernization programmes. This in turn improved e sales of e Textile Machineries of our principals. This division has arted a training center at Guntur, Andhra Pradesh to provide training to e technical personnel of e mills for effective utilization of e machines. This division earned a PBT of Millions, an increase of 62.92% over e previous year. 11

13 Textile Division The good demand for e yarn has helped is division to po impressive results in spite of e unprecedented high cotton co during e year under review. Bo turn over and profits have gone up to record levels. The textile division of e Company earned a PBT of Millions during e year under review compared to Millions in e previous year. Wind Mill Division Your Company has replaced 12 numbers of old Wind Energy Generators (WEG) wi new machines for better generation and to reduce e maintenance co at our wind farms at Kammalapatti and Vadavedampatti villages at an invement of Millions during e year under review. The present total inalled capacity of is division is MW. The wind energy division has performed well in e financial year under review due to better wind and better grid availability and is division has earned a PBT of Millions during e year under review compared to Millions in e previous year. Engineering Division The Gears unit has arted its operations from July, 2010 onwards and operations were abilized in e la quarter of e year under review. Some more machines will be imported for is unit during e current year to increase e production. During e year under review e unit has incurred a loss of Millions. PROSPECTS : Better Yarn price realisation, in spite of increase in e cotton prices, helped e entire textile indury to earn good profits during e year under review. Sudden fall in e cotton prices reflected in e yarn price realisation also. There is a glut in e yarn market and e movement of yarn is very poor. Higher co of power, employees co and e lower yarn prices are expected to reverse e trend and e prospects for e current year are not promising. This may affect e performance of e textile division as well as e agency division subantially in e coming mons. To meet e increase in e requirement of power by e induries, Government is taking all measures to utilize e full generation of wind power by eablishing e infraructure for better grid availability. The wind energy division is expected to continue its better performance. Gears unit is expected to improve its performance during e current year. CONCERN: The areas of concern are: 1. High Volatility in Cotton Price: Mills are not able to foreca e future price movement and unable to take a decision about oring of cotton for e lean season. 2. Labour shortage: Shortage in e labour availability leads to under utilisation of spindleage. 3. Labour Co: Increase in e labour co due to labour shortage and high inflation affects e profitability of e mills. 4. Power problem : The power shortage results in lower utilization of capacity and use of generator based power increases e production co. 5. Competition : Competition from e International companies in e textile machinery indury is an area of concern for our Agency Division. 12

14 INTERNAL CONTROL SYSTEM AND ADEQUACY: The Company has an adequate internal control syem commensurate wi its size and nature of its business. Management has overall responsibility for e Company's internal control syem to safeguard e assets and to ensure reliability of financial records. The Company has a detailed budgetary control syem and e actual performance is reviewed periodically and decision taken accordingly. Internal audit programme covers all areas of activities and periodical reports are submitted to e Management. Audit Committee reviews all financial atements and ensures adequacy of internal control syems. The Company has a welldefined organization ructure, auority levels and internal rules and guidelines for conducting business transactions. FINANCIAL PERFORMANCE AND ANALYSIS: ( in Millions) Particulars Change Percentage Turnover Commission Receipts Oer Operating Income Oer Income Profit before Intere & Depreciation Less : Intere Profit before Depreciation Less : Depreciation Profit before Tax Profit after Tax HUMAN RESOURCES: The Company's HR objectives aim to develop and train each individual to perform to his fulle capacity, achieving individual excellence and company's Goals. The shortage of man power has become a severe problem and efforts have already been initiated to recruit employees to meet our requirements. CAUTION: Statements in e management discussion and analysis describing e Company's objectives, projections, eimates and expectations may be considered as "forward looking atements" wiin e meaning of applicable securities laws and regulations. These atements are based on certain assumptions and expectations of future events. Actual results could differ materially from ose expressed or implied. The factors at might influence e operations of e Company are demandsupply conditions, finished goods prices, raw material cos & availability, change in e government regulations, WTO and natural calamities over which e Company has no control. The Company assumes no responsibility in respect of e forward looking atements herein which may undergo changes in future on e basis of subsequent developments, information or events. For and on behalf of e Board Coimbatore (Sd.) R. VENKATRANGAPPAN 20 May, 2011 Chairman 13

15 CORPORATE GOVERNANCE REPORT 1. PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE SUPER SALES INDIA LIMITED The Company is committed to ensure a good practice of Corporate functioning, maximizing e cuomer satisfaction by offering quality services & products (in lea possible time) at reasonable co and ensure compliance wi all regulations as applicable wi adequate transparency and accountability. 2. BOARD OF DIRECTORS In order to enable e Board to discharge its responsibilities effectively all atutory, significant and material informations are placed before e Board on quarterly basis. (A) Board Composition The composition of e Board of Directors is: Name Category Number of Oer Directorships No of committees in which he is Member/ Chairman Sri. R. Venkatrangappan Sri. C. B. Kariappa Sri. Ravi Sam Sri. Sanjay Jayavaranavelu Sri. R. Satagopan Sri. J. Raghupay NonExecutive, Chairman, Promoter NonExecutive, Independent NonExecutive, Promoter NonExecutive, Promoter NonExecutive, Independent NonExecutive, Independent /5 1/2 5/0 5/0 4/1 1/0 Number of Membership/Chairmanship in committees of all Directors is wiin e Limits specified in Clause 49 I (C) (ii) read wi explanation 2 of e Liing Agreement. (B) Board Meeting and Attendance Four Board Meetings were held during e period from 1 April, 2010 to 31 March, 2011, on , , and Details of attendance of each Director at e Board meeting and La AGM during e financial year ended 31 March, 2011 are given below : Name\Date of meetings Sri. R. Venkatrangappan Sri. C. B. Kariappa Sri. Ravi Sam Sri. Sanjay Jayavaranavelu Sri. R. Satagopan Sri. J. Raghupay AGM (C) Retirement of Directors by rotation and being eligible, offer for re appointment 1. Sri. R. Satagopan Sri. R. Satagopan, a Chartered Accountant served in LIC meritoriously and retired as Executive Director. Experience: More an five decades of experience in e fields of Finance, Accounts, Invements, Adminiration etc., 14

16 Oer Directorship: Lakshmi Machine Works Limited Membership of Committees of Companies Audit Committees Super Sales India Limited Lakshmi Machine Works Limited Remuneration Committees Super Sales India Limited Lakshmi Machine Works Limited Shareholders and Inveors Grievance Committee Super Sales India Limited Share holding : 2. Sri. R. Venkatrangappan Sri. R. Venkatrangappan, a graduate in Commerce and Science, served in various capacities in The Oriental Insurance Company Limited in India and Abroad. He is a pa Chairman of Textile Machinery Manufacturer's Association (India). He is a member of Executive Committee of Federation of Indian Textile Engineering Indury and a member of e Steering Committee of India International Textile Machinery Exhibition Society. Experience: More an five decades in e areas of Financial Management, International Trade and Adminiration. Oer Directorships : 1) Annur Satya Textile Limited 2) Harshini Textiles Limited 3) Lakshmi Machine Works Limited 4) Lakshmi Ring Travellers (Coimbatore) Limited 5) Lakshmi Electrical Control Syems Limited 6) Lakshmi Precision Tools Limited 7) Lakshmi Technology & Engineering Induries Limited 8) RieterLMW Machinery Limited 9) Jaitri Consultant (P) Limited. Membership of Committees of Companies: Audit Committees Harshini Textiles Limited Lakshmi Electrical Control Syems Limited RieterLMW Machinery Limited Remuneration Committees Lakshmi Electrical Control Syems Limited Lakshmi Ring Travellers (Coimbatore) Limited RieterLMW Machinery Limited Share Transfer Committees Super Sales India Limited Annur Satya Textile Limited Lakshmi Machine Works Limited Lakshmi Precision Tools Limited Lakshmi Ring Travellers (Coimbatore) Limited Shareholders and Inveors Grievance Committee Lakshmi Electrical Control Syems Limited Share holding : equity shares of 10/ each conituting 0.404% of e paid up capital. 15

17 3. REMUNERATION OF DIRECTORS Remuneration and sitting fee paid to e Directors during e financial year ended 31 March, 2011 (Amount in Rupees) Name Sri. R. Venkatrangappan Sri. C.B. Kariappa Sri. Ravi Sam Sri. Sanjay Jayavaranavelu Sri. R. Satagopan Sri. J. Raghupay Sitting fee 1,05,000 65,000 30,000 75,000 75,000 60,000 Sitting fee has been revised from 5,000 to 10,000 per meeting wi effect from Remuneration to e NonExecutive Directors is decided by e Board of Directors. At present, e Company pays only sitting fees to all e NonExecutive Directors. No benefits oer an e above are given by e Company to e Directors. No Salary, Benefit, Bonus, Stock Option, Performance linked incentives, Severance fee and Pension are given to Directors. Non Executive Directors' share holding: Sri. R. Venkatrangappan : 12,400 shares Sri. C. B. Kariappa : 1,800 shares Sri. Ravi Sam : 1,000 shares Sri. Sanjay Jayavaranavelu : 2,16,288 shares Sri. J. Raghupay : 1,500 shares Sri. R. Satagopan : There is no pecuniary relationship or transactions of e Non Executive Directors wi e Company. 4. COMMITTEES OF DIRECTORS The Board has conituted four committees of Directors to deal wi e matters referred to it for timely decision. (i) Audit Committee Audit Committee has been conituted on The broad terms of reference to e Committee are compliance of adequate internal control syem, financial disclosures and oer issues confirming to e requirements specified in e Liing Agreement. At present, e Committee consis of e following Directors as its Members: 1. Sri. R. Satagopan Chairman 2. Sri. C. B. Kariappa Member 3. Sri. Ravi Sam Member 4. Sri. J. Raghupay Member The Committee has met 4 times during e financial year ended 31 March, Sri. S.K. Radhakrishnan, Company Secretary is e Secretary of e Committee. 16

18 Name\Date of Audit Committee meetings Sri. R. Satagopan Sri. C. B. Kariappa Sri. Ravi Sam Sri. J. Raghupay (ii) Remuneration Committee The Committee has been formed to determine e Company's policy on remuneration package to e Executive Directors and any compensation payments. The Committee consis of e following Directors as its Members. 1. Sri. C. B. Kariappa Chairman 2. Sri. Ravi Sam Member 3. Sri. R. Satagopan Member There is no remuneration committee meeting held for e financial year ended 31 March,2011. (iii) Shareholders / Inveors Grievance Committee The Committee has been formed to specifically look into Shareholders / Inveors complaints, if any, on transfer of shares, nonreceipt of balance sheet etc., and also e action taken by e Company on e above matters. The Committee consis of e following Directors as its Members 1. Sri. C. B. Kariappa Chairman 2. Sri. Ravi Sam Member 3. Sri. R. Satagopan Member Sri. S. K. Radhakrishnan, Company Secretary is e Compliance Officer. During e financial year under review 2 complaints were received from e inveors, which were resolved to eir satisfaction. The outanding complaint as on 31 March, 2011 was. The Committee has met 2 times during e financial year ended 31 March, Particulars of Shareholders/Inveors Grievance Committee Meeting and attendance of e members present at e meetings are given below : Name\Date of meetings Sri. C. B. Kariappa Sri. Sanjay Jayavaranavelu Sri. R. Satagopan (iv) Share Transfer Committee The Share Transfer Committee has been formed wi 8 members, 5 members representing e Company and 3 members representing e Share Transfer Agents. The Committee reviews and approves transfers and transmission of equity shares. Fifteen Share Transfer Committee Meetings were held during e period from 1 April, 2010 to 31 March, Sri. R. Venkatrangappan, Chairman has attended 11 meetings, Sri. Sanjay Jayavaranavelu, Director has attended 4 meetings and Sri. Ravi Sam, Director has taken leave of absence for all e meetings of e Share Transfer Committee. 17

19 5. GENERAL BODY MEETINGS Information regarding la 3 years' General Body meetings are given below: Location AGM / EGM Day Date Time Nani Kalai Arangam, Mani Higher Sec. School, Coimbatore do do do AGM AGM EGM AGM Wednesday Monday Friday Wednesday AM 11:30 AM 10:00 AM 11:30 AM 1. No special resolution was passed during e years and During two special resolutions were passed: a. At e 27 AGM held on a special resolution was passed to deli e equity shares from Madras Stock Exchange Limited. b. At e EGM held on a special resolution was passed to commence e objects specified under sub clause III (c) 6 of oer objects clause of e Memorandum of Association of e Company. 6. DISCLOSURES There is no materially significant related party transaction at would have been a potential conflict wi e interes of e Company at large. Also no penalty or rictures have been imposed on e Company by any Regulatory Auority for noncompliance of any law. Company has not adopted while blower policy and no person has been denied access to Audit Committee. Certificate from e Statutory Auditors confirming e compliance wi all e conditions of Corporate Governance as ipulated in Clause 49 of e Liing Agreement of e Stock exchanges in India forms part of is report. Interse relationship between e directors: Sri. Ravi Sam, Director is e sier's husband of Sri. Sanjay Jayavaranavelu, Director. No oer director is related to each oer. The Company has complied e following nonmandatory requirement: Remuneration Committee of e Board of Directors of e Company has been conituted and e particulars of e Committee are elsewhere given in is Report. The Company has not complied wi any oer nonmandatory requirements given in e Liing agreement. In e preparation of financial atements, no differential treatment from e prescribed accounting andards is followed. In terms of e liing agreement entered wi e Stock Exchanges intimations have been sent to e shareholders to claim e unclaimed shares. If e unclaimed shares are not been claimed ey will be transferred to unclaimed suspense account. So such shareholders are requeed to contact e Regirar and Share Transfer Agent for claiming e shares. 18

20 In compliance of Clause 49 (I)(B) of e Liing Agreement, it is disclosed at e Company does not have any pecuniary relationship or transactions wi its Non Executive Directors during e financial year ended 31 March, MEANS OF COMMUNICATION The quarterly results were published in leading Newspapers viz., Financial Express [English] and Dinamalar [Tamil]. The corporate information, shareholding pattern, financial atements are poed in e Company's website 8. SHAREHOLDERS INFORMATION (i) Annual General Meeting Day & Date : Thursday, e 11 Augu, 2011 Time : 3.00 PM Venue : 'Nani Kalai Arangam' Mani Higher Secondary School, Pappanaickenpalayam, Coimbatore (ii) Financial Calendar (201112) Results for e financial year : 20 May, 2011 Poing of Annual Report : On or before 15 July, 2011 La date of receipt of proxy forms : 9 Augu, 2011 Announcement of Quarterly Results : Augu, 2011, October, 2011, January, 2012 & May, 2012 nd (iii) Date of Book Closure : 2 Augu, 2011 to 11 Augu, 2011 (bo days inclusive) (iv) Dividend Payment Date : On or before 28 Augu, 2011 (v) Liing on Stock Exchanges and Market Price The shares of e Company are lied in Madras Stock Exchange Limited and Bombay Stock Exchange Limited. The market price data of High and Low during each mon in e la financial year at Bombay Stock Exchange, Mumbai is given below: (vi) Scrip Code at Bombay Stock Exchange : International security identification number (ISIN) : INE091C

21 (vii) Market Price data: Monly Low and High Prices: (BSE) Mon April, 2010 May, 2010 June, 2010 July, 2010 Augu, 2010 September, 2010 October, 2010 November, 2010 December, 2010 January, 2011 February, 2011 March, 2011 Low Share Price () High (viii) Super Sales share prices Vs BSE Sensex Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Share Price Sensex (ix) Regirar & Share Transfer Agents Company's share transfer work and dematerialization are done by M/s. SKDC Consultants Limited, rd "Kanapay Towers", 3 Floor, 1391/A1,Say Road, Ganapay, Coimbatore (Phone: , Fax : and info@skdcconsultants.com) The shareholders can contact em for all matters related to eir shareholdings. (x) Share Transfer Syem The share transfers are regiered and returned wiin a period of 20 days from e date of receipt, if e documents are in order. The share transfers are approved by e Shares Transfer Committee. 20

22 (xi) Diribution of Shareholding as on No. of equity shares held No. of shareholders No. of shares held % held Upto to to to to to to and above 6, ,14,363 2,07,261 1,78,375 1,08,496 70,533 75,212 1,66,367 15,50, Total 6,558 30,71, S No Category No. of shares held % held Indian Promoters Financial Initutions and Mutual Funds Bodies Corporate Indian Public NRI 5,47, ,89,913 19,14,277 18, Total 30,71, (xii) Dematerialization of Shares As on , 23,80,874 shares conituting 77.52% of e total paid up capital of e Company have been dematerialized wi CDSL and NSDL. In view of e numerous advantages offered by e depository syem, members are requeed to avail e facility of dematerialization of e Company's shares. (xiii) Outanding GDR/ADR The Company has not issued any GDR/ADR. (xiv) Plant Locations The Company is having Four Divisions viz., Agency Division, Textile Division, Wind Energy Division and Engineering Division. The Agency Division is functioning at e Regiered Office of e Company, 34A, Kamaraj Road, Coimbatore and e Textile Division consis of ree units at e following locations: Jay Textiles Unit I Jay Textiles Unit II Jay Textiles Unit IV Wind Energy Division Ayyampalayam Pollachi Oakkalmandapam Coimbatore Periyanaicken Palayam Coimbatore Keanur, Vavi Palayam and Elavani villages in PalladamTaluk, Tirupur (Dt), Vadavedampatti, Vadambachery and Kammalapatti Villages in Sulur Taluk, Coimbatore (Dt), Thungavi village, Udumalpet Taluk, Tirupur (Dt) and Poomalaikundu and Thappukundu Villages in Theni Taluk, Theni (Dt). 21

23 Engineering Division Thekkampatti Mettupalayam (xv) Address for Correspondence Company Secretary Super Sales India Limited Regiered Office : 34A, Kamaraj Road Coimbatore Inveor grievances : inveorscell@vaamaa.com (xvi) Chairman's Certificate on Code of conduct The Board has adopted a Code of conduct for e Board members and Senior Management Personnel of e Company and e same has also been poed in e website of e Company. The requisite certificate affirming e compliance wi e Code of conduct has also been obtained from e Board members and Senior Management personnel to whom is code of conduct is applicable. For and on behalf of e Board Coimbatore 20 May, 2011 (Sd.) R. VENKATRANGAPPAN Chairman 22

24 CERTIFICATE To The Board of Directors Super Sales India Limited (a) I hereby certify at I have reviewed e financial atements and e cash flow atement for e year ended 31 March, 2011 and at to e be of my knowledge and belief : (i) ese atements do not contain any materially untrue atement or omit any material fact or contain atements at might be misleading; (ii) ese atements togeer present a true and fair view of e company's affairs and are in compliance wi exiing accounting andards, applicable laws and regulations. (b) ere are, to e be of my knowledge and belief, no transactions entered into by e Company during e financial year , which are fraudulent, illegal or violate any of e Company's code of conduct. (c) I accept e responsibility for eablishing and maintaining internal controls and at e same have been evaluated for e effectiveness of e internal control syem of e Company. I am of e opinion at e design or operations of internal controls are in order. There is no deficiency in e design or operation of internal controls of which I am aware. (d) I have indicated to e auditors and e Audit committee at ere is no significant (i) changes in internal control during e year; (ii) changes in accounting policies during e year; and (iii) fraud of which I am aware of and ere is no involvement of e management or an employee having a significant role in e company's internal control syem. Coimbatore 20 May, 2011 (Sd.) S. RAVINDRAN DGM Finance 23

25 To The Members of Super Sales India Limited CERTIFICATE We have examined e compliance of conditions of Corporate Governance by Super Sales India Limited, for e year ended on , as ipulated in clause 49 of e Liing Agreement of e said Company, wi e ock exchanges. The compliance of conditions of Corporate Governance is e responsibility of e Management. Our examination has been limited to a review of e procedures and implementations ereof, adopted by e Company for ensuring compliance wi e conditions of Corporate Governance as ipulated in e said clause. It is neier an audit nor an expression of opinion on e financial atements of e Company. In our opinion and to e be of our information and according to e explanations given to us and based on e representations made by e Directors and e Management, we certify at e Company has complied wi e conditions of Corporate Governance as ipulated in clause 49 of e above mentioned Liing Agreement. As required by e guidance note issued by e Initute of Chartered accountants of India, we have to ate at based on e representation given by e Regirars of e company to e Inveors' Grievance Committee as on March 31, 2011, ere were no inveors' grievance matters again e Company remaining pending for more an 30 days. We furer ate at such compliance is neier an assurance as to e future viability of e Company nor e efficiency or e effectiveness, wi which, e management has conducted e affairs of e Company. Coimbatore 20 May,2011 For S. KRISHNAMOORTHY & CO., Chartered Accountants (Reg. No S) K.N. SREEDHARAN Partner, Auditor Membership No

26 To AUDITORS' REPORT SUPER SALES INDIA LIMITED The Members of Super Sales India Limited 1. We have audited e attached Balance Sheet of SUPER SALES INDIA LIMITED, as at 31 March, 2011 and also e Profit and Loss Account and e Cash Flow Statement for e year ended on at date annexed ereto. These financial atements are e responsibility of e Company's Management. Our responsibility is to express an opinion on ese financial atements based on our audit. 2. We conducted our audit in accordance wi auditing andards generally accepted in India. Those Standards require at we plan and perform e audit to obtain reasonable assurance about wheer e financial atements are free of material misatement. An audit includes examining, on a te basis, evidence supporting e amounts and disclosures in e financial atements. An audit also includes assessing e accounting principles used and significant eimates made by Management, as well as evaluating e overall financial atement presentation. We believe at our audit provides a reasonable basis for our opinion. We report at 3. As required by e Companies (Auditor's Report) Order, 2003, as amended, issued by e Government of India in terms of Section 227(4A) of e Companies Act, 1956 we enclose in e annexure, a atement on e matters specified in paragraphs 4 and 5 of e said order to e extent applicable. 4. Furer to our comments in e annexure referred to in paragraph 3 above ; a. We have obtained all e information and explanations which to e be of our knowledge and belief were necessary for e purposes of our audit. b. In our opinion, proper books of account as required by law have been kept by e Company so far as appears from our examination of ose books. c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in is report are in agreement wi e books of account. d. In our opinion, e Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt wi by e report are in compliance wi e Accounting Standards referred to in Section 211(3C) of e Companies Act, e. On e basis of e written representations received from Directors as on March 31, 2011 and taken on record by e Board of Directors, we report at no director of e Company is disqualified as on March 31, 2011, for appointment as a Director under clause (g) of sub section (1) of Section 274 of e Companies Act, 1956; and f. In our opinion and to e be of our information and according to e explanations given to us, e said accounts read togeer wi e notes, give e information required by e Companies Act, 1956 in e manner so required and give a true and fair view in conformity wi e accounting principles generally accepted in India: i. In e case of Balance Sheet, of e ate of Company's affairs as on 31 March, 2011, ii. iii. In e case of Profit and Loss Account, of e Profit for e year ended on at date, and In e case of cash flow atement, of e cash flow for e year ended on at date. For S. KRISHNAMOORTHY & CO., Chartered Accountants (Reg. No S) Place: Coimbatore (Sd.) K.N. SREEDHARAN Date : 20 May, 2011 Partner, Auditors Membership No