TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Report and the Audited FinancialStatements of your Company for the year ended 31st March 2016.
Your Company has achieved a turnover of Rs. 139780.63 lakhs for the year ended 31stMarch 2016 as against the turnover of Rs. 211440.84 lakhs for the previous year ended31st March 2015 the highlights of the financial results are as follows:
|Particulars ||Financial Year ended 31st March 2016 ||Financial Year ended 31st March 2015 |
|Profit before Depreciation and Interest ||23572.30 ||25924.59 |
|Interest ||25795.56 ||22680.27 |
|Depreciation ||7830.51 ||2741.00 |
|Profit before tax ||(10053.77) ||503.32 |
|Provision for || || |
|- Current tax ||- ||100.70 |
|- Deferred tax ||4501.99 ||19.89 |
|Profit after tax ||(14555.76) ||382.73 |
|Dividend on CRPS ||- ||2.53 |
|Profit carried to Balance Sheet ||(14555.76) ||380.20 |
Review of Operations:
In order to complete in the changing market conditions STL started adapting differentstrategic initiatives in its existing businesses. A focussed approach and unique strategywas adopted for each business division with the objective of achieving higher growth andprofitability. Various strategic initiatives are also in pipeline to lead the divisionstowards profitability and stability. However these initiatives are yet to be yield anyresults. Your company is also in talks with the lender for restructuring of its debtobligations in view of the sluggish cash flows.
Your Company has the following Wholly Owned Subsidiaries:
A) Digitech Business Systems Ltd:
The operations of M/s. Digitech Business Systems Limited have commenced in a small way.We have stepped up the marketing activities under the aegis of this Company and we hope toclock good turnover during the next year. Company has started looking for a strategicinvestor either to sell off or to join as a partner.
B) Telesuprecon Limited:
M/s Telesuprecon Limited has branches in three countries viz. Malawi Zambia andKenya providing telecom infrastructure services to Telecom operators. The TelecomBusiness in Africa was slowdown and many contracts were kept pending due to Globalrecession. We hope for the improvement of the situation during the next year. As per thelaw prevailing in Mauritius financial statements of M/s Telesuprecon Limited are notrequired to be audited.
C) STL Africa Limited:
As of date the concentration is more on CAD/ CAM contracts and Company is planning toenter into Execution Contracts across Eastern Africa and has already started working inthis direction.
Consolidated Financial Statements:
As required under the Listing Agreements entered into with the Stock Exchanges aconsolidated financial statement of the Company and all its subsidiaries is attached. Theconsolidated financial statement has been prepared in accordance with the relevantaccounting standards as prescribed under Section 133 of the Companies Act 2013. Theconsolidated financial statement discloses the assets liabilities income expenses andother details of the Company and its subsidiaries.
As per the provisions of Companies Act 2013 annual accounts of the subsidiarycompanies and the related detailed information will be made available to the holding andsubsidiary companies' investors seeking such information at any point of time. The annualaccounts of the subsidiary companies will also be kept for inspection by any investor atits Head Office in Hyderabad and that of the subsidiary companies concerned. A gist of thefinancial performance of the subsidiaries in the prescribed Form AOC-1 is enclosed to thisannual report.
Particulars of Loans Guarantees or Investments:
Particulars of Loans Guarantees and Investments as required under the provisions ofSection 186 of the Companies Act 2013 are provided in the notes to the FinancialStatements.
The Company has not accepted any deposits covered under chapter V of the Companies Act2013 and as such no amount of principal or interest was outstanding as on 31st March2016.
Your directors are happy to report that during the year there were very cordial andextremely good industrial relations at all levels.
During the year under review 6 (Six) board meetings were held on 6th May 2015 20thMay 2015 12th August 2015 14th November 2015 28th December 2015 and 12th February2016. The maximum time-gap between any two consecutive meetings was within the periodprescribed under the Companies Act 2013.
During the year under review the members of the Company at their Annual GeneralMeeting held on September 30th 2015 appointed Smt B.Sandhyasri as Independent Directorsunder Section 149 of the Act to hold office for 5 (Five) consecutive years w.e.f March 302015 and appointed Shri G. Srinivasa Raju as the Managing Director of the Company for aperiod a 5(Five) years w.e.f. May 28th 2015. During the year Smt B.Sandhyasri anIndependent and Non Executive Director of the Company resigned from the Board of Directorswith effect from May 30th 2016. The Board placed on record its sincere appreciation andthanks to Smt B. Sandhyasri for her support and guidance provided from time to time duringher tenure as Director of the Company.
The Board has appointed Smt A.Syamala Reddy as Additional Director (IndependentDirector) w.e.f August 27th 2016 and now it is recommended her appointment to beregularized and be appointed for a period of 5(Five) years i.e from September 30th 2016to September 30th 2021. Her appointment on the Board shall also fulfill the requirementof a Woman Director on the Board of the Company as required under the Companies Act 2013and Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. Pursuant to the provisions of Section 152 of the Companies Act 2013 and inaccordance with the Articles of Association of the Company Shri. L.V. Rao Director ofthe Company will retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
The Resolutions proposing their reappointment/ appointments as Directors will be placedbefore the Shareholders for their approval at the ensuing Annual General Meeting of theCompany.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they continue to meet with the criteria of independence as prescribedunder sub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. None of theDirectors of your Company is disqualified under Section 162 (2) of the Companies Act2013. As required by law this position is also reflected in the Auditors' Report.
The following persons are Key Managerial Personnel of the Company:
1. Shri G. Srinivasa Raju Managing Director
2. Shri S. Kalyani Vice-President (Finance)
3. Shri P. Apser Hussen Company Secretary During the year there is no change in therole of the aforesaid KMP.
For Directors seeking appointment/re-appointment in the forthcoming Annual GeneralMeeting of the Company; the particulars as required to be disclosed in accordance withRegulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of this Report.
Related Party Transactions:
The Board of Directors on recommendation of the Audit Committee framed a policy forRelated Party Transaction which includes matters covered u/s 178(3) of the Companies Act2013. The details of the same are provided in the Corporate Governance Report. The Policyis also posted in the Investors section of the Company's website.
All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with
Promoters Directors Key Managerial Personnel or other designated persons which mayhave a potential conflict with the interest of the Company at large. The requisite detailsof the related party transactions entered into during the financial year are provided inAnnexure (I) included in this to this report.
Suitable disclosure as required by the Accounting Standards (AS18) has been made in thenotes to the Financial Statements. All Related Party Transactions are placed before theAudit Committee as also the Board for approval where ever required. Prior omnibusapproval of the Audit Committee is obtained for the transactions which are of aforeseeable and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval so granted are placed beforethe Audit Committee on a quarterly basis.
None of the Directors other than to the extent of their shareholding receipt ofremuneration / commission has any pecuniary relationships or transactions vis-a-vis theCompany.
Your Company has constituted an Audit Committee as per the requirements of Section 177of the Companies Act 2013. The details of the composition of the Audit Committee asrequired under the provisions of Section 177(8) of the Companies Act 2013 is given inthe Corporate Governance Report furnished as part of the Annual Report. During the yearunder review the Board has accepted all the recommendations of the Audit Committee.
Sexual Harassment Policy:
The Company as required under the provisions of "The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013" has framed a Policy onProhibition Prevention and Redressal of Sexual Harassment of Women at Workplace andmatters connected therewith or incidental thereto.
In the year under review the Company has not received any complaint under the saidPolicy.
Corporate Social Responsibility:
The Board of Directors on recommendation of the Corporate Social ResponsibilityCommittee framed a Corporate Social Responsibility Policy in consonance with Section 135of the Companies Act 2013 read with the rules framed there under duly indicating theactivities to be undertaken by the Company as specified in the Schedule VII of theCompanies Act 2013. The Corporate Social Responsibility Policy is posted in the Investorssection of the Company's website.
The Annual Report on CSR activities is annexed herewith as Annexure (II) and forms partof this report.
The Risk Management programme at the Company is focused on ensuring that risks areknown and addressed. The Board of Directors on recommendation of the Audit Committeeestablished a robust Risk Management framework by framing a Risk Management Policy to dealwith all risks including possible instances of fraud and mismanagement if any. The RiskManagement Policy details the Company's objectives and principles of Risk Management alongwith an overview of the Risk Management process procedures and related roles andresponsibilities. The Board is of the opinion that there are no elements of risks that maythreaten the existence of the Company. The board periodically tracks the progress ofimplementation of the Risk Management policy.
Directors' Responsibility Statement:
Directors' Responsibility Statement as required under the provisions of Section134(3)(c) of the Companies Act 2013 is given in the Annexure (III) attached hereto andforms part of this Report.
The Statutory Auditors of the Company M/s. Venugopal & Chenoy CharteredAccountants (Firm Regn. No. 004671S) were re-appointed by the members at the 7th AnnualGeneral Meeting held on 30th September 2014 for a term of 3(Three) years till theconclusion of 10th Annual General Meeting to be held in 2017. Members are requested toratify the same at the ensuing Annual General Meeting of the company in accordance withsection 139 of the Companies Act 2013.
The Audit Report issued by the Statutory Auditors for the financial year ended 31stMarch 2016 forms part of this Report. There are no qualifications reservations oradverse remarks made by the Statutory Auditors which requires explanation or comments fromthe Board.
M/s. Nageswara Rao Co. Cost Accountants (Member Ship No Firm No.000332) Hyderabadwere re-appointed as Cost Auditors of the Company for the Year 2016-17 as per theprovisions of the Companies Act 2013 and the rules made there under.
The Cost Auditor has submitted the report along with their observations andsuggestions and Annexure to the Central Government/stipulated authority within stipulatedtime period.
Members are requested to ratify the remuneration payable to the Cost Auditors at theensuing Annual General Meeting of the company in accordance with section 148 of theCompanies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules framedthere under the Board of Directors on recommendation of the Audit Committee appointedShri Y Ravi Prasada Reddy Practicing Company Secretary (CP. No 5360) to undertake theSecretarial Audit of the Company. The Secretarial Audit Report issued by Shri Y RaviPrasada Reddy Practicing Company Secretaries for the financial year ending 31st March2016 is given in the Annexure (IV) attached hereto and forms part of this Report. Thereare no qualifications reservations or adverse remarks made by the secretarial auditor andthe observation made is self explanatory and requires no further explanation from theBoard.
Extract of Annual Return:
Pursuant to the provisions of Section 92 of the Companies Act 2013 and rules framedthere under the extract of the Annual Return in form MGT-9 is annexed herewith asAnnexure (V) and forms part of this Report.
Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Particulars with respect to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 are given in the Annexure (VI) attached heretoand forms part of this Report.
Environment and Social Obligation:
The Company's plants comply with all norms set up for clean and better environment bythe competent authorities. The Company undertakes regular checks / inspections includingcertification for the maintenance of the environment. The Company values environmentalprotection and safety as the major considerations in its functioning.
Particulars of Employees:
The information required pursuant to the provision of Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company are set out in Annexure-(VII) of this Report.
The Board of Directors on recommendation of the Audit Committee established a vigilmechanism by framing a Whistle Blower Policy to deal with instance of fraud andmismanagement if any. The Vigil Mechanism framework ensures that strict confidentialityis maintained whilst dealing with concerns and also that no discrimination shall be metedout to any person for a genuinely raised concern. The designated officer/ Audit CommitteeChairman can be directly contacted to report any suspected or confirmed incident of fraud/misconduct.
The Board of Directors on recommendation of the Nomination and Remuneration Committeeframed a Nomination and Remuneration policy for selection appointment and remuneration ofDirectors KMP and Senior Management and matters covered u/s 178(3) of the Companies Act2013. The details of the same are provided in the Corporate Governance Report.
The Policy is also posted in the Investors section of the Company's websitewww.sujana.com.
The Board of Directors evaluated the annual performance of the Board as a whole itscommittee's and the directors individually in accordance with the provisions of theCompanies Act 2013 and Clause 49 of the Listing Agreement in the following manner: >Structured evaluation forms after taking into consideration inputs received from theDirectors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance for evaluation of the performance of the
Board its Committee's and each director were circulated to all the members of theBoard along with the Agenda Papers.
> The members of the Board were requested to evaluate by filling the evaluationforms and the duly filled in evaluation forms were required to be sent to the CompanySecretary in a sealed envelope or personally submitted to the Chairman at the concernedmeeting.
> The Board also provided an individual feedback to the concerned director on areasof improvement if any.
A separate meeting of Independent Directors was held on 30th March 2016 to evaluatethe performance of the Chairman the Non Independent Directors the Board and flow ofinformation from management.
Human Resource Management:
Human Capital has gained prime importance in last few years. Our Company believes thatthe human capital is of utmost importance to sustain the market leadership in all productsegments and also to capture new markets. We have changed the Organisation Structure tooptimise best resources & to leverage the market potential. We have identified thehigh Performers and rewarded them appropriately which has helped to achieve betteremployee engagement.
As per the terms of issue of Cumulative Redeemable Preference Shares (CRPS) yourCompany is required to pay the dividend of Rs. 124203/- (Previous year Rs. 148513/-)which represents 1% on 124203 Cumulative Redeemable Preference Shares(CRPS) of Rs.100/-each to the holders of Cumulative Redeemable Preference Shares for the year under review.However the Company has not provided a provision for dividend due to losses. With anunprecedented raise costs and interrupted supplies and power cuts operations are severelyhit. The Company's operations also hampered during the year. As a result the profit of theCompany was declined and your director's are not proposing any equity dividend during theyear.
Your Company accord to high priority to quality safety training development healthand environment. The Company endeavors to ensure continuous compliance and improvements inthis regard.
Material Changes and Commitments:
There is no material change and commitments has occurred affecting the financialposition of the Company between the end of the financial year of the company i.e. 31stMarch 2016 and the date of this report.
Details of significant and material Orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and the Company's operationsin future:
There are no significant and material orders passed during the year.
Internal Control Systems and their adequacy:
Your Company has an effective Internal Control System to prevent fraud and misuse ofCompany's resources and protect shareholders' interest. Your Company has an independentInternal Audit Department to monitor and review and focus on the compliances of variousbusiness processes. The internal audit report alongwith audit findings and tracking ofprocess improvements & compliances is presented for review to the Audit Committee ofBoard of Directors.
Your Company has complied the applicable regulations of SEBI (Listing Oblications andDiscloures Requirements) Regulations 2015 regarding Corporate Governance. ManagementDiscussion and Analysis a report on the Corporate Governance practices the practicingCompany Secretary' Certificate on compliance of mandatory requirements thereof and aregiven as Annexures (VIII) & (IX) to this report.
The Board of Directors places on record their appreciation for the co-operation andsupport extended by all stakeholders in the Company including the Shareholders BankersSuppliers and other Business Associates.
The Directors also wish to place on record their appreciation for all the employees fortheir commitment and contribution towards achieving the goals of the Company.
The Directors also thank the Governments of various Countries Government of IndiaState Governments in India and concerned Government Departments/Agencies for theirco-operation.
BY ORDER OF THE BOARD
|G.Srinivasa Raju ||S.Hanumantha Rao |
|Managing Director ||Director |
|Place: Hyderabad || |
|Date: 27th August 2016 || |