To the Members
The Directors have pleasure in presenting before you the Eighteenth Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended 31stMarch 2016.
1. FINANCIAL RESULTS:
The performance during the period ended 31st March 2016 has been as under:
(Rs. in Lakhs)
|Particulars ||2015 16 ||2014 15 |
|Total Income ||22164.50 ||24736.65 |
|Total Expenditure ||22906.40 ||27951.86 |
|Profit before Tax ||(741.90) ||(3215.21) |
|Provision for Tax ||(240.71) ||(2045.58) |
|Profit after Tax ||(501.19) ||(1169.63) |
|Transfer to General Reserve ||- ||- |
|Profit available for appropriation ||- ||- |
|Provision for Proposed Dividend ||- ||- |
|Provision for Corporate Tax ||- ||- |
|Balance Carried to Balance Sheet ||(501.19) ||(1169.63) |
The total revenue of the Company for the financial year ended 31st March 2016 is Rs.22164.50 lakhs as compared to the previous years total revenue of Rs. 24736.65lakhs. During this financial year the Company has incurred a net loss of Rs. 501.19 lakhsas against the previous years net loss of Rs.1169.63 lakhs. The net loss incurred isdue to lack of adequate working capital in required size delay in process of sanctionsand disbursements unable to utilize available working capital due to low drawing powerand above all the major Visakhapatnam Bio diesel plant was damaged due to Hud-hud cycloneand was in non operation for 10 months of the FY 2015-16.
As per Government of Indias Initiatives to promote the use of Bio diesel fuelGovernment has made it compulsory to use 5% as bio diesel fuel of its total fuelrequirement. On account of this mandatory action the Company has good number of orders inhand both from Indian Government organisations like State Transport organisations IndianRailways OMCs IOCL HPCL etc.
The Company has an order of Rs 70 Crores approximately for Nalgonda Plant and order ofRs 150 Crores for Vizag plant. Apart from this Company has around 600 cores pluspotential orders which is more than the plant capacities.
Your Company has entered MOU certificate No: IN-DL2965436879777N and signed ratecontract with Association of State Road Transport Undertaking (ASRTU) through marketingCompany.
Your Company has tied up with suppliers in Malaysia and Indonesia for supply of PalmSludge Oil/ Palm Mill Effluent containing high FFA and is a raw material for bio dieselproduction.
The Company presently provides internet services as a Licensed ISP. The CompanyServices include the following:
- Server Co-Location
- Leased Line services (Terrestrial and RF links)
- Broad band services
- Networking solutions.
- Web hosting services
Bio Diesel Division:
The Company has two Bio diesel units one is at Samsthan Narayanpur (V&M) NalgondaDistrict Telangana State with 36TPD capacity and the other is at APIIC SEZAtchutapuram Rambilli Mandal Visakhapatnam Andhra Pradesh state with 250 TPD capacity.
The Company has been supplying Biodiesel to various well reputed customers like IndiaRailways Telangana State Road Transport Corporation Indian Oil Corporation LimitedSovino foods Pvt Ltd Jubilant Generics Ltd G.S B Forge Pvt Ltd Coronet Foods Pvt LtdBio Future Ltd Bharat Petroleum Corporation Ltd Hindustan Petroleum Corporation LimitedIndian Oil Corporation My ECO Energy Ltd and other traders etc.
Plant at Visakhapatnam:
All the external damages of Hud-hud cyclone have been restored and has startedcommercial production.
Bio diesel Plant at Tondiarpet Chennai:
The 30 TPD Biodiesel plant for Indian Railways Organization for Alternate Fuels(IROAF) Ministry of Railways is under implementation by the Company and is expected tocommence the production during this financial year.
Biodiesel plant at Raipur Chattisgarh:
Company has received Letter of Acceptance for executing the Raipur bio diesel plant atChattisgarh for IROAF.
Bio diesel orders:
The Company has received Biodiesel supply Orders from Oil manufacturing companies vizIndian Oil Corporation Hindustan Petroleum Corporation Limited and Bharat PetroleumCorporation Limited apart from State Road Transport corporations.
Company has acquired prestigious International Sustainability and Carbon Certification(ISCC EU) which is approved by European Commission Germany.
The Company has not accepted any deposits from public in terms of Section 73 of theCompanies Act 2013 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.
4. PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO:
The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in the Annexure-Iforming part of this Report.
5. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms:
(a) That the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures;
(b) That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year 31st March 2016 and of the profit and loss of the company for that period;
(c) That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) That the directors have prepared the annual accounts for the financial year 31stMarch 2016 on a going concern basis; and
(e) That the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
7. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
8. RELATED PARTY TRANSACTIONS:
All transactions entered with Related Parties for the year under review were onarms length basis and in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. 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 and the Board of Directors on a quarterly basis. The Company hasdeveloped a Policy on Related Party Transactions for the purpose of identification andmonitoring of such transactions. The policy on Related Party Transactions as approved bythe Board is uploaded on the Companys website www.sol.net.in.
The particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of theCompanies (Accounts) Rules 2014 and the same is annexed herewith as Annexure-II tothis Report.
9. EXTRACT OF ANNUAL RETURN:
The Extracts of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9are enclosed as Annexure-III to this Report.
10. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7) of section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section(6) of Section 149.
11. NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy which lays down a framework in relation to selection appointment andremuneration to Directors Key Managerial Personnel and Senior Management of the Company.The details of Nomination and Remuneration Committee and Policy are stated in theCorporate Governance Report.
Your company has the following Subsidiary as mentioned below. Further there has been nomaterial change in the nature of business of the Subsidiary: Southern Bio fe Biofuels PvtLtd (SBBF) is a wholly owned subsidiary of the Company. SBBF was incorporated on08.05.2002 with an authorized share capital of Rs.3440000/-. SBBF initially focused onthe establishment and production of biodiesel the activity of which has been taken overby Southern Online Bio Technologies Ltd. The Company has no operations in the lastfinancial year
|Sl. No. ||Name of the Company ||Percentage (%) |
|Subsidiary Companies: || || |
|1 ||Southern Biofe Biofuels Pvt Ltd (SBBF) ||99.97 |
|2 ||Marvel Bio Oil FZE Sharjah UAE ||100.00 |
In terms of proviso to sub section (3) of Section 129 of the Act 2013 read withCompanies (Accounts) Rules 2014 the salient features of the financial statement of thesubsidiaries and Associates is set out in the prescribed Form AOC-1 which forms part ofthe annual report. - Annexure IV.
13. INTERNAL AUDITORS:
M/s V. Ravi & Co. Chartered Accountants Hyderabad shall be the Internal Auditorsof the Company.
14. SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s S S Reddy & Associates Practicing Company Secretaries to conductSecretarial audit of the company for the financial year ended March 31 2016.
The Secretarial Audit Report issued by M/s. S S Reddy & Associates PracticingCompany Secretaries in Form MR-3 is enclosed as Annexure-V to this Annual Report.
The Secretarial Audit Report does not contain any qualifications reservation oradverse remarks.
15. STATUTORY AUDITORS:
The Auditors M/s P Murali & Co. Chartered Accountants Hyderabad retire at thisAnnual General Meeting and being eligible offer themselves for reappointment.
16. AUDITORS REPORT:
There are no qualifications reservations or adverse remarks made by M/s P Murali &Co. Chartered Accountants Statutory Auditors in their report for the Financial Yearended 31st March 2016.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Corporate Social Responsibility required to be disclosed under Section 135 of theCompanies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules2014 is not applicable to the company. Hence composition of committee is not required.
18. PARTICULARS OF LOANS GUARANTEES OR SECURITIES OR INVESTMENTS:
The details of Loans Guarantees Securities and Investments made during the financialyear ended 31st March 2016 are given in the notes to the Financial Statements incompliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014.
19. COST AUDITORS:
The Board of Directors subject to the approval of the Central Government re-appointedM/s Lavanya & Associates Cost Accountants as a Cost Auditor for conducting the CostAudit for the financial year 2016-17. Subject to section 148 of the Companies Act 2013read with Companies (Cost Records and Audit) Rules 2014 issued by the MCA the AuditCommittee recommended their re-appointment. The Company has also received a letter fromthe Cost Auditor stating that the appointment if made will be within the limitsprescribed pursuant to the section 141 of Companies Act 2013.
20. RATIO TO REMUNERATION TO EACH DIRECTORS AND PARTICULARS OF EMPLOYEES:
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies (Appointment & Remuneration) Rules 2014 ratio of remuneration to medianemployees for Mr N Satish Kumar is 1: 2.6 times in rupees and for Mr K Radha Krishna is 1:1.6 times in rupees.
The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
21. CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements prepared and annexed in accordance with theAccounting Standards 21 and 23 as prescribed under Section 133 of the Companies Act 2013read with Rule 7 of Companies (Accounts) Rules 2014 and Guidelines issued by Securitiesand Exchange Board of India ("SEBI") also forms part of this Annual Report.
As per the provisions of Section 136 of the Companies Act 2013 the Company has placedseparate audited accounts of its subsidiaries on its website www.sol.net.in and copy ofseparate audited financial statements of its subsidiaries will be provided to theshareholders at their request.
22. SHARE CAPITAL:
The Authorised share capital of the Company is Rs 750000000 (Rupees Seventy FiveCrores) divided into 75000000 equity shares of Rs 10/- each. The paid up capital of theCompany is Rs 589932880/- divided into 58993288 equity shares of Rs 10/- each.
23. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis forms an integral part of this Report and givesdetails of the overall industry structure developments performance and state of affairsof the Company's various businesses viz. Bio Diesel Products internal controls and theiradequacy risk management systems and other material developments during the financialyear.
Management Discussion and Analysis Report is presented in a separate section forms partof the Annual Report as
24. BOARD EVALUATION:
Evaluation of all Board members is done on an annual basis. The evaluation is done bythe Board Nomination and Remuneration Committee and Independent Directors with specificfocus on the performance and effective functioning of the Board and Individual Directors.
The criteria covered various aspects for evaluation of Independent Directors such asParticipation at the Board / Committee meetings Commitment (including guidance providedto senior management outside of Board/ Committee meetings) Effective deployment ofknowledge and expertise Integrity and maintaining of confidentiality Independence ofbehavior and judgment exercise of objective independent judgment in the best interest ofthe Company Ability to contribute to and monitor corporate governance practice andAdherence to the code of conduct for independent directors for Evaluation of the BoardImplementation of robust policies and procedures and Size structure and expertise of theBoard were considered for Evaluation of the Managing Director and Non-ExecutiveDirectors Participation at the Board / Committee meetings Effective deployment ofknowledge and expertise;
Discharge of its functions and duties as per its terms of reference Process andprocedures followed for discharging its functions Effectiveness of suggestions andrecommendations received were considered for evaluation of Chairman of the Board aspectssuch as Managing relationship with the members of the Board and management and effectivedecision making at the board were considered.
25. DIRECTORS AND KMP:
Mr BHR Balaji Executive Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.
Mr N Satish Kumar Managing Director of the company is re-appointed for a period of 3years w.e.f. 27.05.2016.
Ms G Anupama Company Secretary has resigned on 5th July 2016 and Ms D ManoranjaniCompany Secretary has been appointed on 5th July 2016.
During the financial year under review 12 (Twelve) Board Meetings 27.05.201508.06.2015 15.06.2015 25.06.2015 28.07.2015 07.08.2015 01.10.2015 14.11.201519.11.2015 10.02.2016 13.02.2016 25.03.2016 and 4 (Four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period of 120 days as prescribed underthe Companies Act 2013 and Regulation 17 of SEBI Listing Regulations 2015.
27. CORPORATE GOVERNANCE:
The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance as per the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
A separate report on corporate governance practices followed by the Company togetherwith a Certificate from the Companys Auditors confirming compliances forms anintegral part of this Report.
28. VIGIL MECHANISM:
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and provides direct access to the Chairperson of the Audit Committee inexceptional cases. It is affirmed that no personnel of the Company has been denied accessto the Audit Committee. The policy of vigil mechanism is available on the Company'swebsite. The Whistle Blower Policy aims for conducting the affairs in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior.
29. CHANGE IN NATURE OF BUSINESS:
There is no change in nature of business of the Company.
30. MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year 31st March 2016 to which thefinancial statements relates and the date of signing of this report.
31. HUMAN RESOURCES:
The industrial relations of the Company continued to be harmonious during the yearunder review.
32. ISO 9001-2008 CERTIFICATION:
Your Company continues to hold ISO 9001-2008 Certification by meeting all therequirements of Certification from time to time.
33. POLICY ON SEXUAL HARRASSEMENT:
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the financial year ended 31st March 2016 the Company has not received anyComplaints pertaining to Sexual Harassment.
34. DEMATERIALISATION OF SHARES:
92.71% of the companys Paid-up Equity Share Capital is in dematerialized form ason 31st March 2016 and balance 7.29% is i n physical form. The Companys Registrarsare M/s Aarthi Consultants Pvt. Ltd. having their registered office at 1-2-285Domalguda Hyderabad - 500 029.
The properties and assets of your Company are adequately insured.
36. UNCLAIMED SECURITIES DEMAT SUSPENSE ACCOUNT:
As on date there are 8239 Equity Shares of Rs. 10/- each which were allotted inInitial Public Offer and Rights Issue of 2005 were lying in the escrow account due tonon-availability of 18 shareholders correct particulars. Despite various reminders tothem by M/s. Aarthi Consultants Private Limited Registrars and Share Transfer Agents noresponse has been received. As a result the said unclaimed shares were credited toSouthern Online Bio Technologies Ltd - Unclaimed Securities Demat Suspense Account. Suchshareholders may approach either the Company or our Registrars and Share Transfer Agentswith their correct particulars and proof of their identity for crediting requisite sharesfrom the Demat Suspense Account to their individual demat Accounts. The voting rights onthese shares shall remain frozen till the rightful owner of such shares claims the shares.
37. TRANSFER TO RESERVES:
Directors have decided not to transfer any amount to reserves for the year.
38. REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements for the year under review
Company has not declared any dividend during the year
40. STATUTORY COMPLIANCE:
The Company has complied with the required provisions relating to statutory compliancewith respect to affairs of the Company with all respects.
41. COMPLIANCE WITH SEBI (LODR) REGULATIONS 2015:
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has signed uniform listing agreement with BSE Limited and framed thefollowing policies which are available on Company's website i.e. www.sol.net.in
Board Diversity Policy
Policy on preservation of Documents
Risk Management Policy
Whistle Blower Policy
Familiarisation programme for Independent Directors
Sexual Harrassment Policy
Related Party Policy
Code of Conduct
42. RISK MANAGEMENT POLICY:
The Board of the Company has formed a Risk Management Committee to frame implement andmonitor the risk management policy/plan for the Company and ensuring its effectiveness.The Risk Management Committee oversees the Risk Management process including riskidentification impact assessment effective implementation of the mitigation plans andrisk reporting. The Audit Committee has additional oversight in the are a of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.
43. DISCLOSURE OF COST AUDIT:
Cost Audit is applicable to your Company.
44. NON-EXECUTIVE DIRECTORS COMPENSATION AND DISCLOSURES:
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
45. CEO/CFO CERTIFICATION:
In line with the requirements of Schedule-V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 Mr N SatishKumar Managing Director Mr K Radha Krishna Chief Financial Officer (CFO) have submitteda certificate to the Board certifying inter-alia that the Financial Statements and theCash Flow Statement for the year ended March 31 2016 were reviewed to the best of theirknowledge and belief that they do not contain any material untrue statement do not omitany material facts are not misleading statements together present a true and fair viewand are in compliance with the applicable laws and regulations. The certificate furtherconfirms that the transactions entered into by the Company for establishing internalcontrol financial reporting evaluation of the internal control systems and making ofnecessary disclosures to the Auditors and the Audit Committee have been complied with.
46. INDUSTRY BASED DISCLOSURE:
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
47. EVENT BASED DISCLOSURE:
During the year under review the Company has not taken up any of the followingactivities:
1. Issue of sweat equity share: The Company has not issued any sweat equityshares during the year under review and hence no information as per provisions of Section54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture)Rules 2014.
2. Issue of shares with differential rights: The Company has not issued anyshares with differential rights and hence no information as per provisions of Section43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture)Rules 2014.
3. Issue of shares under employees stock option scheme: The Company hasnot issued any equity shares under Employees Stock Option Scheme during the year underreview and hence no information as per provisions of Section 62(1)(b) of the Act read withRule 12(9) of the Companies (Share Capital and Debenture) Rules 2014
4. Non- Exercising of voting rights: During the year under review there were noinstances of non-exercising of voting rights in respect of shares purchased directly byemployees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) ofCompanies (Share Capital and Debentures) Rules 2014.
5. Disclosure on purchase by company or giving of loans by it for purchase of itsshares: The company did not purchase or give any loans for purchase of its shares.
6. Buy back shares: The company did not buy-back any shares during the periodunder review.
7. Preferential Allotment of Shares: The company did not allot any shares onpreferential basis during the period under review.
48. SECRETARIAL STANDARDS:
The company is in compliance with SS 1 & SS 2.
49. COMPOSITION OF COMMITTEES
The Composition of Audit Committee Nomination & Remuneration Committee andStakeholders Relationship Committee is mentioned in Corporate Governance Report.
Your Directors wish to place on record their appreciation to employees at all levelsfor their hard work dedication and commitment. The enthusiasm and unstinting efforts ofthe employees have enabled the Company to remain at the forefront of the industry despiteincreased competition from several existing and new players.
The Directors take this opportunity to place on record their sincere thanks to thesuppliers customers strategic partners Banks and Financial Institutions InsuranceCompanies Central and State Government Indian Railways Organisation for Alternate FuelsIndian Railways Telangana State Road Transport Corporation Material suppliers customersand the shareholders for their support and co-operation extended to the Company from timeto time. Directors are pleased to record their appreciation of the sincere and dedicatedservices of the employees and workmen at all levels.
| ||For and on behalf of the Board of Directors |
| ||For Southern Online Bio Technologies Limited |
|Place : Hyderabad ||Sd/- ||Sd/- |
|Date : 13.08.2016 ||N Satish Kumar ||K Radha Krishna |
| ||Managing Director ||Director & CFO |
| ||(DIN : 00552358) ||(DIN : 01585940) |