To the members
The directors submit annual report of S.S. Organics Limited along with the auditedfinancial statement for the year ended March 31 2016.
1. Financial Results:
|Particulars ||Stand alone |
| ||As at 2015-16 ||As at 2014-15 |
|Gross Income ||124267069 ||62544382 |
|Less: Expenditure ||165923049 ||103674173 |
|Less: Interest & Finance Charges ||5115458 ||2066333 |
|Less: Depreciation ||8240551 ||25345211 |
|Profit before tax/ Loss ||(55011989) ||(68541335) |
|Less: Current Tax ||- ||- |
|Less: Deferred Tax ||15836 ||7391533 |
|Profit available for appropriations/Loss ||(54996153) ||(61149802) |
|Profit ht forward/Loss ||(262710299) ||(194796438) |
|Balance carried forward/Loss ||(317706452) ||(262710299) |
2. Review of Operations:
It was already brought to your notice that the present management of the Company hasinfused Rs. 600 lacs during 2013 to 2014 as per the Rehabilitation Scheme of HonbleBoard for Industrial and Financial Reconstruction (BIFR) for revival of the Company. Inthe year 2014-15 had infused more than Rs. 347 lacs for operational activities of theCompany. The aggregate amount of Rs. 947 lacs spent towards Revival of the Company. Inaddition to above infusions the present management has infused more than 2.69 Crores toits revival and smooth running of the Company in the Financial Year 2015-16.
It already brought to the notice of the shareholders in the last Annual General Meetingthat the Company has entered into contract manufacturing work with M/s. Aurobindo PharmaLimited for manufacturing of ciprofloxacin and started its production in ABlock in the month of August 2013 and started its own production of Gabapatine in themonth of August 2014 and Company is planning to take few more Job Work contract withother entities and also planning to take further expansion of its Own Production in thenext coming years.
3. Fire Accident at Block A :
It already brought to the notice of shareholders in the last year AGM there was a fireaccident on January 7th 2015 at 11.40 A.M at "A" Block. There was no human lossor injuries but there is a huge property loss to the Company.
After due procedure the Company has received total Insurance Claim of Rs. 37963964/-(Three Crores Seventy Nine Lacs Sixty Three Thousand Nine Hundred and Sixty Four).
The management revived its production process in the month of July 2015 and adoptedfew more additional safe guard measures in addition to existing measures to prevent andmitigate the risk.
4. Status with BIFR:
The Honble BIFR has circulated the MDRS on 27.01.2014 and the scheme envisagesinfusion of fresh funds reduction of Paid-up Share Capital and Issue of Fresh Capitaletc. The Proceedings are pending with BIFR.
Your Directors did not recommend any dividend for the year 2015-16.
6. Transfer To Reserves:
Your Company has not transferred any amount to the general reserve.
V. Gowtham Reddy retiring director at the ensuing 23rd AGM and being eligible offerhimself for reappointment.
The Board after considered the recommendations for appointments and remunerations ofmembers of Nomination and Remuneration Committee re-appointed Sri V.N. Sunanda Reddy asManaging Director of the Company for a period of 3 years w.e.f 01.04.2016 and Dr. SaiSudhakar Vankinei as Whole Time Director of the Company for a period of 3 years w.e.f01.08.2016 these appointments are subject to the approval of shareholders in the ensuingAGM and explanations are included at Item No. 4 and 5 of the Notice convening the ensuingAGM.
None of the independent directors will retire at the ensuing AGM of the Company.
8. Directors Responses on the Qualifications made by the Company Secretary in Practicein Secretarial Audit Report:
Secretarial Auditors Qualifications:
1. "The Company has appointed Whole Time Company Secretary pursuant to theprovisions of Section 203 of the Companies Act 2013 with delay of 29 days."
Explanation: "Since the company is a Sick Company registered with BIFR as CaseNo. 91/97 Company no Company Secretary has come forward to act as Company Secretary andafter taking lot of struggles Company has appointed J. Vijay Kumar as Company Secretaryw.e.f. 14.11.2015. Therefore 29 days delay in the appointment and comply to the provisionsof section 203 of the Companies Act 2013."
Secretarial Auditors Observations:
1. "BSE has imposed a Fine of Rs. 142000 on its letter dated 06.10.2015 for nonappointment of Women Director in the Board "
Explanation: "Since the company is a Sick Company registered with BIFR as CaseNo. 91/97 Company no woman has come forward to act as Woman Director. And we had alsowrote a several letters to SEBI BSE and MCA for suggesting any lady for acting as WomanDirector but there is no suggestions from aforesaid departments. After a lot of strugglescompany had appointed Smt. Sudi Vijaya Lakshmi as Woman Director to the Board and Companyalso wrote a request letter to BSE SEBI and MCA for withdrawing of the fine of Rs.142000 as Company is a Sick Company and not in a position to pay the fine."
2. "Chairman of the Audit Committee has not attended the Last Annual GeneralMeeting"
Explanation: "Chairman of the Audit Committee has not attended the last AGMdue to his pre-occupation with some other. Chairman of the Company authorized Sri. N.Gangi Reddy member of Audit Committee and having a status of Non-Executive andIndependent Director of the Company to clarify any doubts on the Audited Accounts. Sri N.Gangi Reddy is having Financial and Accounting Knowledge."
9. Deposits from the Public:
The Company has not accepted any deposits which cover under the Section 73 of theCompanies Act 2013.
10. Particulars of Loans Guarantees or investments:
Loans guarantees and investments covered under section 186 of the Companies Act 2013from part of the notes to the financial statements provided in this Annual Report.
11. Particulars of Contracts or arrangement made with related parties:
No contracts or arrangement made with related parties during the year as per theSection 188(1) of the Companies Act 2013.
12. Material changes and commitment affecting financial position between the end of thefinancial year and date of report:
There is no material changes and commitment affecting financial position between theend of the financial year 2015-16.
13. Directors Responsibility Statement:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their Knowledge and ability confirm that:
i. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period.
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.
iv. They have taken prepared the annual accounts on a going concern;
v. They have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Companys internal financial controls were adequate and effective during thefinancial year 2015-16.
14. Number of meetings of the Board:
Five (5) meetings of the board were held during the year. For details of the meetingsof the board please refer to the corporate governance report which forms part of thisreport.
15. Declaration by independent directors:
The Company has received necessary declaration from each independent director undersection 149(7) of the Companies Act 2013. That he meets the criteria of independence laiddown in Section 149(6) of the Companies Act 2013.
16. Board Evaluation:
As required under the provisions of Schedule IV of the Companies Act 2013 theperformance evaluation of independent directors has been done by the entire Board ofDirectors excluding the director being evaluated. The evaluation of all the directors andthe Board as a whole was conducted based on the criteria and framework adopted by theBoard. The Board approved the evaluation results as collated by the nomination andremuneration committee.
None of the independent directors are due for re-appointment
17. Policy on directors appointment and remuneration and other details.
The Companys policy on directors appointment and remuneration and othermatters provided in Section 178(3) of the Act has been disclosed in the corporategovernance report which forms part of the directors report.
18. Internal financial control systems and their adequacy.
The Internal Financial Control systems is explained in Management Discussion Analysis
19. Audit Committee:
Your company has constituted the Audit Committee within the provisions laid down inSection 177(2) of Companies Act 2013 and read with the regulation 18 of SEBI (LODR)2015.
20. Extract of Annual Return:
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format in appended as Annexure I.
i. The Statutory Auditors of the Company M/s. VDNR & Associates CharteredAccountants who were appointed as the Statutory Auditors of the Company till theconclusion of 24th Annual General Meeting.
ii. N. Vanitha of M/s. P.S. Rao & Associates Practicing Company Secretaries wasappointed to conduct the secretarial audit of the Company for the Financial Year 2015-16as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report for FY 2015-16 forms part of the Annual Report as Annexure II tothe Boards Report.
22. Particulars of Employees:
The information required under section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the Financial Year:
|Directors ||Ration to median remuneration |
|V.N. Sunanda Reddy ||17.2 Times |
|Sai Sudhakar Vankineni ||15.4 Times |
"The Company has not paid any remuneration to the non-executive directors of theCompany for the Financial Year 2015-16."
b. The percentage increase in remuneration of each director Chief Executive OfficerChief Financial Officer Company Secretary in the Financial Year:
"During the Financial Year 2015-16 there is no increase in the remuneration ofeach director chief executive officer chief financial officer company secretary of theCompany."
c. The Percentage increase in the median remuneration of employees in the FinancialYear: 16.4%
d. The number of permanent employees on the rolls of Company: 109
e. The explanation on the relationship between average increase in remuneration andCompany Performance:
On an average employees at factory received an annual increase of 16.4% in India. Theindividual increments varied from 9% to 25% based on individual performance.
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Aggregate remuneration of Key managerial personnel (KMP) in FY 2015-16 ||Rs. 4682892 |
|Total Revenue ||Rs. 124267069 |
|Remuneration of KMPs (as % of Revenue) ||3.77 % |
|Profit Before Tax (PBT) ||Rs. (55011989) |
|Remuneration of KMP (as % of PBT) ||(8.51) % |
g. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
|Particulars ||Mr. V.N. Sunanda Reddy ||Dr. Sai Sudhakar Vankineni ||Sri J. Vijay Kuamar |
| ||Managing Director ||Executive Director ||Company Secretary |
|Remuneration in FY 2016. ||2400000 ||2160000 ||122892 |
|Revenue (Rs.) || ||124267069 || |
|Remuneration as % of revenue ||1.93 ||1.74 ||0.10 |
|Profit Before Tax (PBT) || ||(55011989) || |
|Remuneration (as % of PBT) ||(4.3) ||(3.9) ||(0.22) |
* Sri J. Vijay Kumar was appointed as Company Secretary and Compliance Officer w.e.f.14.11.2015
h. The Ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: None.
i. Affirmation that the remuneration is as per the remuneration policy of theCompany:
The Company affirms remuneration is as per the remuneration policy of the Company.
23. Conservation of energy research and development technology absorptionforeign exchange earnings and outgo. The particulars as prescribed under Sub-Section(3)(m) of Section 134 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 are enclosed as Annexure III to the Boards Report.
Your Directors wish to express their gratitude to the central and state governmentinvestors analysts financial institutions banks business associates and customers themedical profession distributors and suppliers for their wholehearted support. Yourdirectors commend all the employees of your company for their continued dedicationsignificant contributions hard work and commitment.
| ||For S.S. Organics Limited |
| ||Sd/- |
| ||V.N. Sunanda Reddy |
| ||Chairman and Managing Director |
|Place: Hyderabad. || |
|Date: 12.08.2016 || |