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Surana Solar Ltd.

BSE: 533298 Sector: Engineering
NSE: SURANASOL ISIN Code: INE272L01022
BSE LIVE 14:39 | 15 Dec 16.70 0.05
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17.10

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NSE 14:27 | 15 Dec 16.95 0.25
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16.10

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17.15

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OPEN 17.10
PREVIOUS CLOSE 16.65
VOLUME 5500
52-Week high 27.80
52-Week low 14.15
P/E 53.87
Mkt Cap.(Rs cr) 82
Buy Price 16.70
Buy Qty 73.00
Sell Price 16.95
Sell Qty 294.00
OPEN 17.10
CLOSE 16.65
VOLUME 5500
52-Week high 27.80
52-Week low 14.15
P/E 53.87
Mkt Cap.(Rs cr) 82
Buy Price 16.70
Buy Qty 73.00
Sell Price 16.95
Sell Qty 294.00

Surana Solar Ltd. (SURANASOL) - Director Report

Company director report

To The Members of Surana Solar Limited

Your Directors have pleasure in presenting the 11th Annual Report and theAudited Statement of Accounts for the financial year ended 31st March 2017together with the Auditors Report thereon.

FINANCIAL RESULTS:

The performance of the Company during the year is summarized below:

(Amount in Rs.)

Particulars 2016-17 2015-16
Sales and other Income 846154070 1194020299
Profit before Depreciation Interest and exceptional Items 84806525 105366801
DEDUCT :
Depreciation and Amortization Expenses 27466432 29928142
Interest and Finance charges 32848145 44395936
Profit for the year before exceptional items 24491948 31042723
Profit before Taxation 24491948 31042723
Provision for Taxation :
Current Tax 5122310 6329254
Deferred Tax 1617115 (919626)
MAT Entitlement Credit 1022665 4373320
Profit after Tax 16729858 21259775
Surplus brought forward from previous year 73847504 52587732
Balance available for appropriation 90577362 73847506
Balance c/f to Balance Sheet 90577362 73847506

OPERATION AND PERFORMANCE:

During the year under review the Income from Operations is Rs. 840902576 as againstRs. 1182133635 for the corresponding previous year. The Profit Before Tax is Rs.24491948 as against Rs.31042723 for the previous year. The Profit After Tax is Rs.16729858 as against Rs. 21259775 for the corresponding period. The Basic Earnings PerShare for the year-ended 31.03.2017 is Rs. 0.34 as against Rs. 0.43 for the correspondingprevious year ended 31.03.2016.

China and other some countries continue to dump substandard and cheap material toIndia. In such scenario it is difficult to compete with the imports. This has resulted infall in topline and bottom-line. In spite of such adverse effect the Company has beenable to earn profits due to effective cost control and saving interest cost.

BUSINESS DEVELOPMENT AND PROSPECT

To face the challenge poised for imports the Company has decided to widen itsactivities by entering into EPC contracts and solar rooftop business. The Companyparticipated in various tenders fl oated by SECI and other Agencies and was successful inthe following tenders: (i) The Company has been awarded an EPC Contract for DesignEngineering Procurement & Supply

Construction & Erection Testing Commissiong Associated Transmission System &Comprehensive Operation & Maintenance for 10 (Ten) Years of 10MW (AC) Solar PowerPlant by Paradip Port Trust Odisha (India) at a total cost of Rs. 60.60 Crores. TheCompany is in the process of setting up of the project.

(ii) Your company is placed at lowest bidder in the Bid invited by Kakinada Smart CityCorporation Limited under RESCO model for site survey investigation design engineersupply installation commission synchronizing and maintenance of grid connected roof topsolar PV systems on net metering basis in the Kakinada City Andhra Pradesh for a maximumcapacity of 5 MW at a price of Rs.5.25 per unit. Letter of Intent (LOI) is expected to bereceived shortly.

SHARECAPITAL:

The paid-up Share Capital of the Company as on 31st March 2017 isRs.246033000 divided into 49206600 equity shares of Rs.5/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated underListing Regulations is presented in a separate section forms part of the Annual Report asAnnexure-II.

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 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) That the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year 31st March 2017 and of the profitand loss of the company for that period; (c) That the directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (d) That the directors have prepared the annualaccounts for the financial year 31st March 2017 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 compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

STATEMENTONDECLARATIONGIVENBYINDEPENDENT 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.

NOMINATIN AND REMUNERATION POLICY

The Board has on the recommendation of the Nomination

& Remuneration Committee framed a policy which lays down a framework in relation toselection appointment and remuneration to Directors Key Managerial Personnel and SeniorManagement of the Company. The details of Nomination and Remuneration Committee and Policyare stated in the Corporate Governance Report.

PARTICULARS OF LOANS GUARANTEES OR SECURITIES OR INVESTMENTS

The details of Loans Guarantees Securities and Investments made during the financialyear ended 31st March 2017 are given in the notes to the Financial Statementsin compliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential confl ict with theinterest 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 Company's website. The particulars of contracts orarrangements with related parties referred to in sub-section (1) of section 188 isprepared in Form AOC-2 pursuant to clause (h) of the Companies (Accounts) Rules 2014 andthe same is annexed herewith as "Annexure-IV" to this Report.

DIVIDEND

The Company has the record of continuous payment of dividend to its shareholders sinceinception. However for the financial year 2016-17 the Board of Directors has notrecommended the dividend due to low profitability and capex plans the company has for theyear 2017-18.

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 - V to this Report.

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 theAnnexure-I forming part of this Report.

RISK MANAGEMENT POLICY

In terms of the requirement Section 134(3)(n) and Regulation 21 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 read with relevant provisions of the Companies Act 2013 the Company has developed andimplemented the Risk Management Policy. The Audit Committee has additional oversight inthe area of financial risks and controls. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.The development and implementation of risk management policy has been covered in themanagement discussion and analysis which forms part of this report. At present theCompany has not identified any element of risk which may threaten the existence of theCompany.

CORPORATE SOCIAL RESPONSIBILITY

Surana Group recognizes the importance of contributing to the society in a meaningfulway. An urge to serve the society and to bring change in the living of the people SuranaGroup had taken an initiative in this direction and the journey was embarked in the year1987 by Shri G. Mangilal Surana in the memory of his father Shri Gulab Chand Surana bystarting a hospital "G.M. Surana Charitable Hospital".

The G.M. Surana Charitable Hospital is engaged in community and social initiatives andplays an active role in serving rural community.

Vision Mission and Core Values:-

Vision: To serve each patient with compassion and love as we would do to our lovedones.

Mission: To develop maintain and continuously improve our quality resources to thesociety by providing better care for better future.

Core value:

• Compassion

• Commitment to Quality

• Working Together

• Respect for the Individual

G.M. Surana Charitable Hospital believes in ‘Commitment to Care' and theinitiative of this stands as the testimony. The main objective of this foundation is toprovide health care services to the people below and on poverty line.

It was founded as a clinic in 1987 and in the year 2011 it was converted to hospital.The hospital now covers 6000 sq ft area. It is being managed by 5 doctors and 10assistants and with a provision of 10 beds. It has even added Physiotherapy centre in2011. In the first year of the journey 25079 patients were treated and the number hasincreased consistently and till date 2017 the total number of patients treated in thehospital are 1032818.

Former Years of G.M. Surana Charitable Clinic:-

The idea to start this foundation was to reach out to the rural community as they hadno access to the proper medical facilities and to be a helping hand to them and thispassion was turned into action by taking the first step in the year 1987 by establishingG.M. Surana Charitable Clinic. The clinic was built on 1200 sq ft area. It had 2 permanentdoctors who were provided residence in the clinic so there could be 24/7 service for thepeople and 5 staff members to take care of the daily activities. There were only 3 to 4beds available with 80 to 90 patients treated daily who came from 25 kms of the radius tovisit the clinic and avail the services. There were weekly camps held such as eye caredental care and various vaccinations for children and even skin diseases were taken careof.

Current activities in G.M. Surana Charitable Hospital:-

With 28 years of services for the people G.M. Surana Charitable Clinic has immenselygrown. In 2011 G.M. Surana Charitable Clinic was changed to G.M. Surana CharitableHospital. Presently the hospital has grown to 6000 sq ft area with 5 doctors and 10 staffmembers. The small steps have taken a large leap in the foundation and the passion toserve people has emerged and is increasing. The general clinic has even added aphysiotherapy centre and weekly camps now even include thyroid checkup heart care tipsblood grouping glucose provision and much more. The only thing that remains constant inall these years is the trust of the people towards the foundation and till date 10 lakhsplus patients are treated here.

Future Years:-

G.M. Surana Charitable Hospital still yearns to grow more and by providing everypossible services under one roof to its people with the best quality. Future plans of thehospital includes – opening an eye care centre and a thyroid centre by providingdaily services rather than weekly camps. It even desires to include specialised doctors invarious fields so the rural community has an access to it in the right means.

Management:-

G.M. Surana Charitable Hospital is located at Bollarum village. The charitable clinicis founded by Sri G.M. Surana Chairman – Sri Narender Surana Vice Chairman –Sri Devendra Surana Secretary - Sri Anand Swarup Bora and 6 executive committee members.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Board of Directors of the Company have constituted Corporate Social ResponsibilityCommittee and adopted policy for Corporate Social Responsibility. The Composition of theCommittee is as follows:

Sl.No. Name Designation
1 Shri Narender Surana Chairman
2 Shri Devendra Surana Member
3 Dr R.N.Sreenath Member

The CSR Committee is empowered to perform the functions of the Board relating to thesocial initiatives of the Company. Its primary functions are to: Formulate review andrecommend to the Board a CSR policy indicating the activities to be undertaken by theCompany as specified in Schedule VII of the Companies Act 2013. Recommend the amount ofexpenditure to be incurred on the initiatives as per the CSR policy. Provide guidance onvarious CSR initiatives undertaken by the Company and monitoring their progress. Monitorimplementation and adherence to the CSR Policy of the Company from time to time. CorporateSocial Responsibility policy was adopted by the Board of Directors on the recommendationof Corporate Social Responsibility Committee. Report on Corporate Social Responsibility asPer Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is preparedand the same is enclosed as Annexure - III to this Report.

BOARD EVALUATION

During the year under review pursuant to the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the evaluation ofperformance of all Directors is undertaken annually. The company has implemented a systemof evaluating performance of the Board of Directors and of its Committees and individualDirectors on the basis of a structured questionnaire which comprise evaluation criteriataking into consideration various performance related aspects. The Board of Directors hasexpressed their satisfaction with the valuation process.

DIRECTORS:

Shri Devendra Surana Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. During theyear under review Shri S.R.Vijayakar Independent Director has resigned from the officeof Director w.e.f. 30.09.2016.

The brief particulars of the Directors seeking appointment / re-appointment at thisAnnual General Meeting are being annexed to the Corporate Governance Report.

Pursuant to the provisions of Section 203 of the Act the appointment of Shri NarenderSurana and Shri Devendra Surana Directors and Shri Manish Surana Director Finance &Technical/Whole-time Director were formalised as the Key Managerial Personnel of theCompany.

MEETINGS

During the financial year under review 5 (five) Board Meetings and 4 (four) AuditCommittee Meetings were convened and held. The details of which are given in the CorporateGovernance Report. The intervening gap between the meetings was within the period of 120days as prescribed under the Companies Act 2013 and Regulation 17 of SEBI ListingRegulations 2015.

DEPOSITS

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.

STATUTORY AUDITORS

M/s. Sekhar & Co. Chartered Accountants Statutory Auditors of the Company havetendered there resignation from acting as Statutory Auditors of the Company with effectfrom the conclusion of this 11th Annual General Meeting. The Audit Committee of theCompany has proposed and the Board of Directors have recommended the appointment of M/s.Luharuka & Associates Chartered Accountants (Firm Registration No.001882S) asStatutory Auditors of the Company in place of M/s. Sekhar & Co. As per the provisionsof Section 139 of the Companies Act 2013 and the Rules made thereunder M/s. Luharuka& Associates will hold office for a period of five consecutive years from theconclusion of the 11th Annual General Meeting till the conclusion of the 16th AnnualGeneral Meeting to be held in 2022 subject to the approval of the shareholders of theCompany. The first year of audit will be of the financial statements for the year ending31st March 2018. M/s. Luharuka & Associates Chartered Accountants (Registration No.001882S) have confirmed that their appointment if made shall be in accordance with theprovisions of Section 139 of the Companies Act 2013. Accordingly a resolution seekingmembers' approval on appointment of M/s. Luharuka & Associates Chartered Accountantsas the Statutory Auditors of the Company for a period of five consecutive years isincluded at Item No. 3 of the Notice convening the Annual General Meeting.

AUDITORS'REPORT

There are no qualifications reservations or adverse remarks made by M/s. Sekhar &Co Chartered Accountants Statutory Auditors in their report for the Financial Year ended31st March 2017.

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s Luharuka & AssociatesChartered Accountants as Internal Auditors to conduct Internal Audit for the FinancialYear ended 31st March 2017.

COST AUDITORS

The Board of Directors subject to the approval of the Central Government re-appointedM/s BVR & Associates Cost Accountants holding certificate of practice No.16851 as aCost Auditor for conducting the Cost Audit for the financial year 2017-18. Subject tosection 148 of the Companies Act 2013 read with Companies (Cost Records and Audit) Rules2014 issued by the MCA the Audit Committee recommended their re-appointment. The Companyhas also received a letter from the Cost Auditor stating that the appointment if madewill be within the limits prescribed pursuant to the section 141 of Companies Act 2013.

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 governancepractices followed by the Company together with a Certificate from the Company's Auditorsconfirming compliances forms an integral part of this Report.

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 and transparent manner by adoptinghighest standards of professionalism honesty integrity and ethical behavior

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 has appointedMrs. Rakhi Agarwal Company Secretary in Practice as Secretarial Auditors to conductSecretarial audit of the company for the financial year ended March 31 2017. TheSecretarial Audit Report issued by Mrs. Rakhi Agarwal Company Secretary in Practice inForm MR-3 is enclosed as Annexure - VI to this Annual Report.

The Secretarial Audit Report does not contain any qualifications reservation oradverse remarks.

PARTICULARS OF EMPLOYEES

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.

PARTICULARS OF REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as follows: (i) The ratio ofthe remuneration of each director to the median remuneration of the employees of thecompany for the financial year;

Name of the Director Ratio to Median Remuneration
Shri Manish Surana WTD 44.30

(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

Name of Person % increase in remuneration
Shri Manish Surana WTD 0.00
Shri. Badarish H Chimalgi CS 30.00

(iii) The percentage increase in the median remuneration of employees in the financialyear – 14.35% (iv) The number of permanent employees on the rolls of company - 62 (v)Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration; The averageincrease in salaries of employees other than managerial personnel in 2016-17 was 11.76%.

Percentage increase in the managerial remuneration for the year was 25%.

(vi) Affirmation that the remuneration is as per the remuneration policy of the company- Yes.

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.

Quarterly basis at the time of review of Quarterly Financial Results of the Company.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

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.

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 2017to which the financial statements relates and the date of signing of this report.

HUMAN RESOURCES:

The industrial relations of the Company continued to be harmonious during the yearunder review.

ISO 9001-2008 CERTIFICATION

Your Company continues to hold ISO 9001-2008 Certification by meeting all therequirements of Certification from time to time.

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 2017 the Company has notreceived any Complaints pertaining to Sexual Harassment.

APPRECIATION

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.

CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditionsaffecting selling prices of finished goods input availability and prices changes ingovernment regulations tax laws economic developments within the country and otherfactors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

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 Departments and the shareholders for their supportand co-operation extended to the Company from time to time. Directors are pleased torecord their appreciation of the sincere and dedicated services of the employees andworkmen at all levels.

For and on behalf of the Board of Directors
NARENDER SURANA DEVENDRA SURANA
DIRECTOR DIRECTOR
DIN:00075086 DIN:00077296
Place: Secunderabad
Date: 31.07.2017