To The Members of
Surana Telecom and Power Limited
The Directors have pleasure in presenting the 27th Annual Report of your Companytogether with the Audited Balance Sheet as at 31st March 2016 and Statement of Profit andLoss for the year ended 31st March 2016.
The performance of the Company during the year has been as under: (Amount in Rs)
|Particulars || |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Sales and other Income ||231177192 ||190292091 ||265773882 ||195400940 |
|Profit before Depreciation and Interest ||111621737 ||134648185 ||142839670 ||137449589 |
|DEDUCT: || || || || |
|Depreciation & Amortization ||64708543 ||77103617 ||80875920 ||81048076 |
|Interest ||30905463 ||32702990 ||46178960 ||37595768 |
|Profit for the year ||16007731 ||24841578 ||15784790 ||18805745 |
|Prior period Adjustments ||- ||(33838) ||64637 ||(33838) |
|Profit before Taxation ||16007731 ||24807740 ||15849427 ||18771907 |
|Provision for Taxation : Current Tax ||2250000 ||4000000 ||2250000 ||4000000 |
|Deferred Tax ||715001 ||937000 ||705426 ||(570828) |
|Income Tax in respect of earlier years ||- ||- ||(19390) ||26064 |
|Profit after Tax ||13042730 ||19870740 ||12913391 ||15316671 |
|Minority Interest (Current years Profit/(loss) ||- ||- ||(64333) ||(2461232) |
|Surplus brought forward from previous year ||187213217 ||187321117 ||184589378 ||186790114 |
|Balance available for appropriation ||200255947 ||207191857 ||197567102 ||204568017 |
|APPROPRIATION: || || || || |
|Dividend ||- ||12482640 ||- ||12482640 |
|Tax on Dividend ||- ||2496000 ||- ||2496000 |
|Transfer to General Reserves ||- ||5000000 ||- ||5000000 |
|Balance c/f to Balance Sheet ||200255947 ||187213217 ||197567102 ||184589377 |
During the year under review the Income from Operations is Rs 220125276 as againstRs 174623085 for the corresponding previous year. The Profit Before Tax stood at Rs16007731 as against Rs 24807740 for the previous year. The Profit After Tax stood atRs 13042730 as against Rs 19870740 for the corresponding period. The Basic EarningsPer Share for the year-ended 31.03.2016 is Rs 0.13 as against Rs 0.19 for thecorresponding previous year ended 31.03.2015.
The Companys 5 MW Solar Power Project situated at Gujarat Solar Park CharanakaVillage Santapur Taluk Patan District is successfully running. During the year underreview generation was effected due to adverse weather condition which were not conduciveto Power Generation.
M/s Surana Solar Systems Private Limited Subsidiary Company is effectively running 5MW Solar Power Plant situated at Shankapur Village Shankarampet Mandal Medak DistrictTelangana.
During the year under review the Company has been awarded 5MW Solar Power Project inthe state of Uttar Pradesh which will be implemented through Subsidiary Company viz. M/sAryavaan Renewable Energy Private Limited has entered into Power Purchase Agreement (PPA)for supply of 5MW Solar Power with Uttar Pradesh Power Corporation Limited (UPPCL)Lucknow. The project is likely to be commissioned by November 2016.
M/s. Tejas India Solar Energy Private Limited Subsidiary Company has been awardedtechnical feasibility to set up 6MW solar power plant at Kodakandla village GajwelMandal
Medak Dist Telangana. The power will be sold to third party under open access..
Your company has 5 subsidiary companies as mentioned below. Further there has been nomaterial change in the nature of business of the subsidiaries.
|Sl. No. ||Name of the Subsidiary ||Percentage (%) |
|1. ||Globecom Infotech Private Limited ||100% |
|2. ||Surana Solar Systems Private Limited ||51% |
|3. ||Celestial Solar Solutions Private Limited ||51% |
|4. ||Tejas India Solar Energy Private Limited ||51% |
|5. ||Aryavaan Renewable Energy Private Limited ||100% |
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC-1which forms part of the annual report. Pursuant to the provisions of section 136 of theAct the financial statements of the Company consolidated financial statements along withrelevant documents and separate audited accounts in respect of subsidiaries are availableon the website of the Company.
SCHEME OF ARRANGEMENT:
The Company made an application with the Hon'ble High Court of Judicature at Hyderabadfor the State of Telangana and the State of Andhra Pradesh for approval of the Scheme ofArrangement between the Company (Demerged Company) and Surana Telecom and Power Limited(1st Resulting Company) and Bhagyanagar Properties Private Limited (2nd Resulting Company)and their respective Shareholders and Creditors under Section 391 to 394 of the CompaniesAct 1956.
According to the Scheme of Arrangement the solar business including 5 MW solar powerplant and investments in Surana Solar Limited held by M/s. Bhagyanagar India Limited (BIL)are being merged with the Company. Please visit our website www.suranatele.com forcomplete information relating to the Scheme of Arrangement.
Rationale for Scheme: Solar Business:
5 MW solar power plant of BIL is being transferred to Surana Telecom and PowerLimited (STPL) along with all assets and liabilities.
Bhagayanagar India Limited is holding investments Surana Solar Limited (SSL).Since the company is engaged in the business relating to solar industry these investmentsare also being transferred to STPL.
STPL is focusing only on solar power generation now. As part of consolidation ofvarious business verticals and to increase the worth of share holders it is desired thatall solar power plant across the Group should come under the umbrella of STPL.
For solar business: STPL shall issue 4 equity shares for every 6 shares held byshareholders of BIL. STPL shall issue net 31737963 equity shares of the face value ofRe.1 each.
The Hon'ble High Court vide its order dated 25th April 2016 directed the Company toconvene Meeting of the Shareholders and Unsecured Creditors of the Company on 11th June2016 for obtaining approval for the Scheme of Arrangement between the Company and M/s.Surana Telecom and Power Limited and M/s. Bhagyanagar Properties Private Limited and theirrespective Shareholders and Creditors.
The Company has duly convened the meeting of the Equity Shareholders and UnsecuredCreditors and obtained approval for the Scheme of Arrangement with the requisite majority.The Company filed a Petition to obtain the sanction of the Honble High Court ofJudicature at Hyderabad for the State of Telangana and Andhra Pradesh to the Scheme ofArrangement.
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.suranatele.com and copyof separate audited financial statements of its subsidiaries will be provided to theshareholders at their request.
The paid-up Share Capital of the Company as on 31st March 2016 is Rs 104022000divided into 104022000 equity shares of Re.1/- 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 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.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT
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.
NOMINATION 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 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.
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. 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-III" to this Report.
The Company has the record of continuous payment of dividend to its shareholders forover two decades. However for the financial year 2015-16 the Board of Directors has notrecommended the dividend due to low profitability and the financial commitments thecompany has to fulfill during the year 2016-17.
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 - IV 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.
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 area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically 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.
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.
Shri Baunakar Shekarnath Whole-time Director of the Company will retire by rotation atthe ensuing Annual General Meeting and being eligible offers himself for re-appointment.The brief particulars of the Directors seeking appointment / re-appointment at this AnnualGeneral Meeting are being annexed to the Corporate Governance Report.
Pursuant to the provisions of Section 203 of the Act the appointment of Shri NarenderSurana Managing Director and Shri Devendra Surana Director and Ms.Vinita SuranaWhole-time Director and Shri Baunkara Shekarnath Whole-time Director and Mr.D.SrinivasCompany Secretary were formalized as the Key Managerial Personnel of the Company.
During the financial year under review 6(Six) Board Meetings and 6 (Six) 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.
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.
The shareholders of the Company at the 25th Annual General Meeting held on 22ndSeptember 2014 approved the appointment of M/s. Sekhar & Co Chartered Accountants(Registration No. 003695S) as Statutory Auditors of the Company to hold office till theconclusion of 28th Annual General Meeting subject to ratification of shareholders at everyAnnual General Meeting to be held in the year 2017 subject to ratification of theirappointment at every Annual General Meeting.
M/s. Sekhar & Co Chartered Accountants (Registration No. 003695S) have confirmedthat their appointment if made shall be in accordance with the provisions of Section 139of the Companies Act 2013. Accordingly a resolution seeking Members' ratification onappointment of M/s. Sekhar & Co Chartered Accountants as the Statutory Auditors ofthe Company for the financial year ending 31st March 2017 is included at Item No.3 of theNotice convening the Annual General Meeting.
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 2016.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
The Board of Directors of the Company had appointed M/s Luharuka & AssociatesChartered Accountants as Internal Auditors to conduct Internal Audit of the Company forthe Financial Year ended 31st March 2016.
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 2016-17. 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.
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 CompanysAuditors confirming compliances forms an integral part of this Report.
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.
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 Ms. Rakhi Agarwal Company Secretary in Practice as Secretarial Auditors toconduct Secretarial audit of the company for the financial year ended March 31 2016.
The Secretarial Audit Report issued by Ms. Rakhi Agarwal Company Secretary in Practicein Form MR-3 is enclosed as Annexure - V 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
The remuneration and perquisites provided to the employees and Management are at parwith the industry levels. The remunerations paid to the Managing Director and seniorexecutives are reviewed and recommended by the Nomination and Remuneration Committee.
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|Name of the Director ||Ratio to Median Remuneration |
|Shri Narender Surana ||0 |
|Managing Director || |
|Shri Devendra Surana Director ||0 |
|Ms.Vinita Surana WTD* ||37.69 |
|Shri Baunakar Shekarnath WTD ||0 |
* Ms Vinita Surana has been appointed as Whole Time Director w.e.f. 27.03.2015
(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 Narender Surana ||0 |
|Managing Director || |
|Shri Devendra Surana Director ||0 |
|Ms.Vinita Surana WTD* ||0 |
|Shri Baunakar Shekarnath WTD ||0 |
|Shri Srinivas Dudam CS ||7.69 |
* Ms. Vinita Surana has been appointed as Whole Time Director w.e.f. 27.03.2015
(iii) The percentage increase in the median remuneration of employees in the financialyear 8.33% (iv) The number of permanent employees on the rolls of company 22.
(v) Average percentile increase already made in the salaries of employees other thanthe managerial 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 2015-16 was 1.95%.Percentage increase in the managerial remuneration for the year was 7.69%.
(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.
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 2016 to which thefinancial statements relates and the date of signing of this report.
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 2016 the Company has not received anyComplaints pertaining to Sexual Harassment.
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.
Statements in the Boards Report and the Management Discussion & Analysisdescribing the Companys 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 couldinfluence the Companys operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
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 |
|MANAGING DIRECTOR ||DIRECTOR |
|Date : 10.08.2016 || |
|Place : Secunderabad || |