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. 315231.87 lakhs for the year ended 31stMarch 2016 as against the turnover of Rs. 326016.19 lakhs for the previous year ended31st March 2015 the highlights of the financial results are as follows:
Rs. in Lakhs
|Particulars ||2015-2016 ||2014-2015 |
|Profit Before Depreciation & Interest ||13206.05 ||11313.55 |
|Financial Costs ||13245.84 ||10963.89 |
|Depreciation ||2048.25 ||2130.80 |
|Profit Before Tax ||(2088.04) ||(1781.14) |
|Provision for Tax || || |
|- Current Tax ||- ||- |
|- Deferred Tax ||(570.02) ||(586.76) |
|Profit After Tax ||(1518.02) ||(1194.38) |
|Balance of profit brought forward from earlier years ||22659.06 ||23032.47 |
|Add: Excess Provision for IT written off ||- ||844.56 |
|Profit available for appropriation ||21141.04 ||22682.65 |
|Appropriations: || || |
|Proposed Dividend: || || |
|- Equity ||- ||- |
|- Preference ||12.18 ||20.30 |
|- Dividend Tax ||2.48 ||3.29 |
|Balance of Profit ||21126.38 ||22659.06 |
In order to compete in the changing market conditions the Company started adaptingdifferent strategic initiatives in its existing businesses. A focussed approach and uniquestrategy was adopted for each business division with the objective of achieving highergrowth and in pipeline to lead the divisions towards profitability and stability.
|Appliances Division ||The Appliances divisions mainly includes the products like varieties of Fans Fan Components and other appliances which has recorded a turnover of Rs. 5.23 lakhs during the year ended 31st March 2016. |
|Steel Products Division ||The Steel Products division mainly handles activities of Casting Processing and Trading of Steel and aided products and during the year ended 31st March 2016 it has recorded a turnover of Rs. 315226.64 lakhs including the export turnover of various products were Rs. 32417.45 lakhs. |
|LEC Division Infrastructure Division ||The LEC division is mainly includes bearing and bearing components. With a view to expand the Companys operations in the construction and developmental activities like integrated residential townships commercial buildings and specialized design and construction of integrated medical colleges and super specialty hospitals etc the Company started Infrastructure Division however due to the current economic slowdown no works were taken up by this Division in this year. |
Your Company has the following Wholly Owned Subsidiaries:
|PAC Ventures Pte Ltd ||Pac Ventures Pte. Ltd Singapore was set up in the year 2007 with a view to expand the Companys business of general wholesale trade (including general imports and exports) in the overseas markets and the Company has achieved revenue of Rs. 71644.40 lakhs during the year. |
|Sujana Holdings Ltd ||Sujana Holdings Ltd Dubai was set up in the year 2006 for carrying on the business of investments and trading and its revenue during the year is nil. Further Sujana Holdings has expanded its operations in Sharjah UAE by forming a subsidiary namely Empire Gulf FZE Sharjah UAE. |
|Nuance Holdings Ltd ||Nuance Holdings Ltd Hong Kong was set up in the year 2006 for carrying on the business of investments and trading and its revenue during the year was Rs. 7505.84 lakhs. Nuance Holdings Ltd has expanded its operations by forming a subsidiary namely Selene Holdings Ltd Mauritius. |
|Sun Trading Ltd ||Sun Trading Ltd Cayman Islands was set up in the year 2008 for carrying on the business of general wholesale trade which includes general imports and exports and its consolidated revenue was Rs. 185031.56 lakhs. Sun Trading Ltd has a subsidiary namely Sun global Trading Pte. Ltd Singapore. |
|Hestia Holdings Ltd ||Hestia Holdings Ltd Mauritius has became subsidiary of the Company w.e.f. 27th December 2010 with the object of carrying on the business of general trade which includes general imports and exports. |
The paid up Equity Share Capital as on 31st March 2016 was 16884.11 lakhs. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on 31st March 2016 none of the Directors ofthe Company hold shares or convertible instruments of the Company.
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.
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 expenses and other 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. Theannual accounts of the subsidiary companies will also be kept for inspection by anyinvestor at its Head Office in Hyderabad and that of the subsidiary companies concerned. Agist of the financial performance of the subsidiaries in the prescribed Form AOC-1 isenclosed to this annual report.
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 Five (05) Board Meetings were held on 27th May 201512th August 2015 14th November 2015 28th December 2015 and 12th February 2016. Themaximum time-gap between any two consecutive meetings was within the period prescribedunder 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 Directorunder Section 149 of the Act to hold office for 5 (Five) consecutive years w.e.f. March30 2015 and re-appointed Shri G.Srinivasa Raju as the Managing Director of the Companyfor a period of 3 (Three) years w.e.f. August 12th 2015.
During the year Smt B.Sandhyasri an Independent and Non Executive Director of theCompany resigned from the Board of Directors with effect from May 30th 2016. The Boardplaced on record its sincere appreciation and thanks to Smt B. Sandhyasri for her supportand guidance provided from time to time during her tenure as Director of the Company. ShriS. Hanumantha Rao changed from the position of Non executive Director of the Company andcontinues as Executive Director of the Company w.e.f. 01.01.2016. The Board has appointedSmt. A. Syamala Reddy as Additional Director (Independent Director) w.e.f. August 27th2016 and now it is recommended her appointment to be regularized and be appointed for aperiod of 5 (Five) years i.e. from September 30th 2016 to September 30th 2021. Herappointment on the
Board shall also fulfill the requirement of a Woman Director on the Board of theCompany as required under the Companies Act 2013 and Regulation 17(1) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and in accordancewith the Articles of Association of the Company Shri G. Srinvasa Raju Managing Directorof the 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 the Directors of your Company is disqualified under Section 162 (2) of theCompanies Act 2013. As required by law this position is also reflected in theAuditors Report.
The following persons are Key Managerial Personnel of the Company:
1. Shri G. Srinivasa Raju : Managing Director
2. Shri S. Hanumantha Rao : Whole Time Director
3. Shri B. Manoharan : Chief Financial Officer
4. Shri P. Kodanda Rami Reddy : Company Secretary
During the year Shri M. Naresh Kumar resigned as Company Secretary w.e.f. 15.09.2015and Shri P. Kodanda Rami Reddy appointed as Company Secretary w.e.f. 13.06.2016.
For Directors seeking appointment/re-appointment in the forthcoming Annual GeneralMeeting of the
Company; the particulars as required to be disclosed in accordance with Regulation 25of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 forms part of this Report.
The Board of Directors evaluated the annual performance of the Board as a whole itscommittees and the directors individually in accordance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in the following manner:
Structured evaluation forms after taking into consideration inputs received from theDirectors covering various aspects of the Boards functioning such as adequacy ofthe composition of the Board and its Committees Board culture execution and performanceof specific duties obligations and governance for evaluation of the performance of theBoard its Committees and each director were circulated to all the members of the Boardalong with the Agenda Papers.
The members of the Board were requested to evaluate by filling the evaluation forms andthe duly filled in evaluation forms were required to be sent to the Company Secretary in asealed envelope or personally submitted to the Chairman at the concerned meeting.
The Board also provided an individual feedback to the concerned director on areas ofimprovement 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.
Related Party Transactions
The Board of Directors on recommendation of the Audit Committee framed a policy forRelated Party Transactions 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 Companys website.
All Related Party Transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. The requisite details of the relatedparty transactions entered into during the financial year are provided in Annexure Iincluded in 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 wherever required. Prior omnibus approvalof the Audit Committee is obtained for the transactions which are of a foreseeable andrepetitive nature. A statement giving details of all related party transactions enteredinto pursuant to the omnibus approval so granted are placed before the Audit Committee.
None of the Directors other than to the extent of their shareholding receipt ofremuneration has any pecuniary relationships or transactions vis--vis the Company.
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 Companys 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 Companys objectives and principles of Risk Managementalong with 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 may threaten theexistence of the Company. The board periodically tracks the progress of implementation ofthe 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. T. Raghavendra & Associates CharteredAccountants (Firm Registration Number: 003329S) were re-appointed by the members at the25th Annual General Meeting held on 30th September 2014 for a term of 3 (Three) yearstill the conclusion of 28th Annual General Meeting to be held in 2017. Members arerequested to ratify the same at the ensuing Annual General Meeting of the Company inaccordance with Section 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 or adverse remarksmade by the Statutory Auditors which requires explanation or comments from the Board.
M/s. BVR & Associates Cost Accountants (Membership Number: M/16851) 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 hassubmitted the report along with their observations and suggestions and Annexure to theCentral Government/stipulated authority within stipulated time 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 Secretary for the financial year ending
31st March 2016 is given in the Annexure-IV attached hereto and forms part of thisReport. There are no qualifications reservations or adverse remarks made by thesecretarial auditor and the observation made is self explanatory and requires no furtherexplanation from the Board.
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 hereto andforms part of this Report.
Environment and Social Obligation
The Companys plants comply with all norms set up for clean and better environmentby the competent authorities. The Company undertakes regular checks / inspectionsincluding certification for the maintenance of the environment. The Company valuesenvironmental protection and safety as the major considerations in its functioning. TheCompany has adequate effluent Treatment Plants to prevent pollution. The Company iscontinuously endeavoring to improve the health and quality of life in the communitiessurrounding its industrial complexes.
Particulars of Employees
The information required pursuant to the provisions 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 confidentiality is maintained whilst dealingwith concerns and also that no discrimination shall be meted out to any person for agenuinely raised concern. The designated officer/ Audit Committee Chairman can be directlycontacted 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 Policyis also posted in the Investors section of the Companys website www.sujana.com.
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 identified the high Performers andrewarded them appropriately which has helped to achieve better employee engagement.Competency based training program has been devised for High - Potential employees withfocus on their Individual Development Plan & helping them to become future leaders.
As per the terms of issue of Cumulative Redeemable Preference Shares (CRPS) vide letterNo: 2587/SASF/ CBO and 5937/SASF(SUIL) dated 28th June 2005 and 29th October 2005respectively your Company is required to pay the dividend of Rs. 12.18 lakhs (Previousyear Rs. 20.30 lakhs) which represents 1% on 1218098 Cumulative Redeemable PreferenceShares (CRPS) of Rs.100/- each to the holders of Cumulative Redeemable Preference Sharesfor the year under review. Further your Company also provided a provision of dividend taxto the extent of Rs. 2.48 lakhs (Previous year Rs. 3.95 lakhs).
With an unprecedented raise costs and interrupted supplies and power cuts operationsare severely hit.
The Companys operations also hampered during the year. As a result the profit ofthe Company was declined and your directors are not proposing any equity dividendduring the year. Your Company has always emphasized on achieving operational excellenceand continues to focus on customer satisfaction and delight. Backed by strong fundamentalsand robust plans your Company is fully prepared to face current challenges and benefitfrom expected medium and long term growth in Indian economy.
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 commitment 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 Companysoperations in future.
The two Company Petitions i.e. C.P. 174/2013 and C.P. 169/2014 u/s 433 of the CompaniesAct 1956 filed by Standard Bank (Mauritius) Limited (SBML) (in connection with thecorporate guarantee furnished by the Company on behalf of its step down subsidiary SeleneHoldings Limited Mauritius) and Mauritius Commercial Limited (MCB) (in connection withthe corporate guarantee furnished by the Company on behalf of its subsidiary HestiaHoldings Limited Mauritius) respectively were admitted by the Honble High Court ofJudicature at Hyderabad for the State of Telangana and The State of Andhra Pradesh. TheCompany has preferred appeal OSA 13 of 2015 against the said admission of C.P.174 of 2013and C.P No.169 of 2014 which are still pending for disposal. The Company is also exploringthe process of settlement.
Except the above there are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status of the Company and theCompanys operations in future.
Internal Control Systems and their adequacy
Your Company has an effective Internal Control System to prevent fraud and misuse ofCompanys resources and protect shareholders interest. Your Company has anindependent Internal Audit Department to monitor and review and focus on the compliancesof various business processes. The internal audit report alongwith audit findings andtracking of process improvements & compliances is presented for review to the Audit
Committee of Board of Directors.
Your Company has complied with the requirements of applicable SEBI (Listing Obligationsand Discloure Requirements) Regulations 2015 regarding Corporate Governance ManagementDiscussion and Analysis a report on the Corporate Governance practices and theAuditors Certificate on compliance of mandatory requirements thereof are given asAnnexure - 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 theirappreciation for all the employees for their commitment and contribution towards achievingthe 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 ||Whole Time Director |
|Place: Hyderabad || || |
|Date: 27th August 2016 || || |