Neueon Towers Limited
Your Directors and the Resolution Professional have pleasure inpresenting the 13th Annual Report of your Company together with the Audited FinancialStatements of Accounts for the Financial Year ended 31st March 2020
Your Directors hereby report that the Company has achieved a turnoverof Rs.416.96 lakhs upto 31.03.2020as against the turnover of Rs.4189.89 lakhs during theprevious financial year ended 31 03.2019.
Company's Performance (Rs in lakhs)
|Particular ||Financial Year ended 31st March 2020 ||Financial Year ended 31st March 2019 |
|Profit before Depreciation and Interest ||(10376.76) ||(42825.82) |
|Interest ||1619.74 ||6833.61 |
|Depreciation ||9417.30 ||9379.31 |
|Profit before tax ||(21413.80) ||(59038.74) |
|Provision for || || |
|-Current Tax ||- ||- |
|-Deferred Tax ||814.95 ||1542.84 |
|Profit after tax ||(22228.75) ||(60581.58) |
|Divident on CRPS ||- ||- |
|Profit carried to Balance Sheet ||(22228.75) ||(60581.58) |
Review of Operations:
Operations stood at an all time low since the inception of theCompany. Notwithstanding positive market conditions your Company is unable to capitalizeon them due to the financial constraints. It's inability to complete the existingcontracts on hand is also acting as an impediment in procuring new contracts. However allthese are expected to be obliterated once the present debt-restructuring initiative getscompleted. Most of the production capacity of the Company remain unutilized for want ofresources. Your Directors hope and wish to report a good performance in the years to come.
Status of Corporate Insolvency Resolution Plan (CIRP):
As informed to the Members earlier and also the disclosures made to theStock Exchanges that the Corporate Insolvency Resolution Process ('CIRP') was initiatedfor the Company under the provisions of Section 7 of the Insolvency and Bankruptcy Code2016 ('IBC') by the National Company Law Tribunal vide Order No. CP(IB) No. 679/7/HDB/2018('order') with effect from 03.06.2019. Further vide the aforesaid NCLT order and pursuantto Section 17 of the IBC the powers of the Board of Directors of the Company stoodsuspended and such powers are vested with the Interim Resolution Professional Dr. M SSankar - Resolution Professional (IP Registration No.IBBI/IPA-001/ IP-P00770/2017-18/11315. His appointment confirmed by the Committee of Creditors ('COC') as theResolution Professional (the 'RP'). Accordingly Dr.M.S.Sankar in his capacity as RP tookcontrol and custody of the management and operations of the Company from 03.06.2019.Consequently all actions that are deemed to be taken by the Board of Directors have beenbe given effect to by the RP during the continuance of the CIRP as per the provisions ofthe IBC. In view thereof the 13th Annual General Meeting (AGM) of the Members of theCompany is being convened by the RP.
Subsesequently the completion of CIRP was extended with the permissionof the Honourable NCLT as follows:
|Details of the Orders passed by the Hon'ble NCLT Hyderabad ||Date upto which the CIRP is to be completed |
|01. Order No. CP(IB)No.679/7/HDB dated 3rdJune 2019 ||180 days from 3rd June 2019 |
|02. O rder No. IA No.1047/2019 in CP(IB)No.679/7/HDB dated 22-11-2019 ||90 days from 1st December 2019 |
|03. Order No. I.A. No.206 of 2020 in C.P. (IB) N o.679/7/2018 dated 02-03-2020 ||60 days from 29th February 2020 |
|04 Order IA 523/2020 in main CP No.679/7/HDB/2018 dated 30.07.2020 ||Extended up to 06.09.2020 |
|05 IA was filed before Hon'ble NCLT Hyd after completion of e-voting . ||Period extended up to 06.11.2020 |
|06 IA and memo filed before Hon'ble NCLT Hyd to exclude lockdown period up to 31.10.2020 where by CIRP will end on 07.12.2020 ||Hon'ble NCLT hearings is going on and CIRP is likely to be completed before 31st December 2020 |
The Resolution Plan dated 7th October 2020 submitted by M/s. LongviewResources (HK) Limited and M/s Invent Assets Securitisation & Reconstruction PrivateLimited was approved by the Committee of Creditors in their 27th Meeting held on 19thOctober 2020 and the same was put for E voting during the period from 28th October 2020 to4th November 2020. The said resolution plan was voted in favour by 98.7% creditors invalue and it was approved by Committee of Creditors with requisite majority under theprovisions of the Insolvency and Bankruptcy Code 2016 and Other Regulations as specifiedunder the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process forCorporate Persons) Regulations 2016 including amendments if any in pursuance to Sec. 30of the Insolvency and Bankruptcy Code 2016 and subject to the approval of the Hon'bleNational Company Law Tribunal Hyderabad Bench.
The approved Resolution Plan would be filed with the National CompanyLaw Tribunal - Hyderabad Bench shortly for the approval of the Adjudicating Authority.
In view of the losses your Company does not recommendany dividend forthe year under review
Material Changes and Commitments:
There is no material change and commitment has occurred affecting thefinancial position of the Company between the end of the financial year of the Companyi.e. 31st March 2020 and the date of this report.
The Company Petition i.e. C.P. 137/2013 u/s 433 of the Companies Act1956 filed against the Company by M/s. Bhiragacha Finance Company Private Limited is notadmitted by the Hon'ble High Court of Judicature at Hyderabad for the State of Telanganaand Andhra Pradesh. The said Company Petition was dismissed by the Hon'ble Court on04-08-2014 for non representation by the Counsel for the Petitioner. As deus payable tothem have been settled. Petitioners have preferred appeal against the Order of 04.08.2014.The said petition is pending for admission and hearing. M/s. Bhiragacha Finance CompanyPrivate Limited is in the process of withdrawing the petition.
Members may kindly note that Corporate Insolvency Resolution Process('CIRP') has been initiated for the Company under the provisions of Section 7 of theInsolvency and Bankruptcy Code 2016 ('IBC') by the National Company Law Tribunal videOrder No. CP(IB)No. 676/7/HDB/2018 ('order') with effect from 03.06.2019 (uploaded onwebsite on 08.06.2019). Further vide the aforesaid NCLT order and pursuant to Section 17of the IBC the powers of the Board of Directors of the Company stood suspended and suchpowers are vested with the Interim Resolution Professional Dr. M S Sankar - ResolutionProfessional (IP Registration No.IBBI/ IPA- 001/IP-P00770/2017-18/ 11315. His appointmentconfirmed by the Committee of Creditors ('COC') as the Resolution Professional (the 'RP').Accordingly Dr. M.S.Sankar in his capacity as RP took control and custody of themanagement and operations of the Company from 03.06.2019.
Except the above there are no significant and material orders passedby the regulators or courts or tribunals impacting the ongoing concern status of theCompany and the Company's operations in future.
Your Company has not accepted Deposits from Publicor Members underChapter V of the Companies Act2013 and the Companies (Acceptance of Deposits)Rules 2014for the year under review.
Related Party Transactions
All contracts/arrangements/transactions entered bythe Company duringthe financial year with relatedparties were in ordinary course of business and onarm'slength basis. During the year the Company had notentered into anycontract/arrangement/ transactionwith related parties which could be consideredmaterialunder Regulation 23 of Listing Regulation. Accordinglythe disclosure of RelatedParty Transactions as required under Section 134(3)(h) of the Companies Act 2013 inFormAOC - 2 is not applicable. The Policy on materiality ofrelated party transactions anddealing with related partytransactions as approved by the Board is also posted in theInvestors section of the Company's website www.sujana.com. Your Directors draw attentionofthe members to Note no. 30 to the financial statementswhich sets out related partydisclosures.
Prior omnibus approval is obtained on an annual basisfor thetransactions with related parties which are ofa foreseeable and repetitive nature. Thetransactionsentered into pursuant to the omnibus approval so grantedand a statement givingdetails of all transactions withrelated parties are placed before the Audit CommitteeandBoard of Directors for their review on a periodic basis.
None of the Directors other than to the extent of their shareholdingreceipt of remuneration / commission has any pecuniary relationships or transactionsvis-a-vis the Company. Corporate Social Responsibility
Corporate Social Responsibility Policy framed in consonance withSection 135 of the Companies Act 2013 read with the rules framed there under dulyindicating the activities to be undertaken by the Company as specified in the Schedule VIIof the Companies Act 2013. The Corporate Social Responsibility Policy is posted in theInvestors section of the Company's website. The Company is not falling under any of theapplicability criteria of CSR as mentioned under the provisions of Section 135 of theCompanies Act 2013 as amended by the Companies Amendment Act 2019. Reporting as requiredunder the aforesaid Section for the FY 2019-20as Annexure- I and forms part ofthis report.
Directors' Responsibility Statement:
Directors' Responsibility Statement as required under the provisions ofSection 134(3) (c) of the Companies Act 2013 is given in the Annexure -II attachedhereto and forms part of this Report
(a) . Statutory Auditors:
In terms of Section 139 of the Companies Act 2013 (theAct") and the Companies (Audit and Auditors) Rules 2014 made thereunder thepresent Statutory Auditors of the Company M/s. Venugopal & Chenoy (Regn.No.004671S)Chartered Accountants Hyderabad be and are hereby re-appointed as the auditors of theCompany to hold office from the conclusion of this Annual General Meeting until theconclusion of the 15th Annual General Meeting to be held in year 2022 subject toratification by the members at every Annual General Meeting hereafter.
During the year under review the Auditors of the Company have notreported any fraud as specified under Section143 (12) of the Companies Act 2013 to theAudit Committee.
(b) . Cost Auditors: M/s. Nageswara Rao & Co Cost Accountants[Firm No.000332] have been appointed as the Cost Auditor of the Company for financial year2019-20 pursuant to provisions of Section 148 and other applicable provisions of theCompanies Act 2013. As required by Section 148 of the Companies Act 2013 necessaryresolution has been included in the notice convening the Annual General Meeting seekingratification by the members to the remuneration proposed to be paid to the cost auditorsfor the financial year ending 31st March2021
(c) . Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013and rules framed there under the Resolution Profes sional has a ppo in tedMr. Anand KumarC kasat P r ac ticing Company Secretaries (CP.NO.42078 FCS NO.17420) to u ndertake thesecretarial audit of the Company. The secretarial audit report issued by Mr. Anand Kumar CKasat Practicing Company Secretary for the financial year ending 31st March 2020 isgiven in the Annexure- III-Aattached hereto and forms part of this Report. Thereare no qualifications reservations or adverse remarks made by the secretarial auditor andthe observation made is self explanatory and requires no further explanation from theBoard.
(d). Secretarial Compliance Report
Pursuant to Regulation 24A of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 the Company has obtained annual Secretarial ComplianceReport for the financial year ended 31st March 2019.The report has been annexed herewithas "Annexure - III-B"
The paid up equity share capital as on 31st March 2020 was Rs.5654.46Lakhs. During the year 2019-20 there was no change in the share capital of the Company.
The Company has not issued any share with differential voting rightsnor has granted any stock options or sweat equity as on 31st March 2020. None of theDirectors of the Company hold instruments convertible into equity shares of the Company.
Extract of Annual Return:
Pursuant to the provisions of Section 92 of the Companies Act 2013 andrules framed there under the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure -IV and forms part of this Report.
Particulars of Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo:
Particulars with respect to Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo as required under Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 are given in the Annexure-V attached hereto and forms part of this Report.
The powers of the Board of Directors stood suspended and such powerswere vested with the Interim Resolution Professional Dr. M S Sankar - ResolutionProfessional (IP Registration No.IBBI/ IPA- 001/IP-P00770/2017-18/11315. His appointmentconfirmed by the Committee of Creditors ('COC') as the Resolution Professional (the 'RP').Accordingly Dr.M.S.Sankar in his capacity as RP took control and custody of themanagement and operations of the Company from 03.06.2019.
Hence no Board meetings were held during the year 2019-20. HoweverResolution Professional has conducted the meetings with the Directors of the Company fromtime to time to consider and approve the Quarterly and Yearly Financial Results of theCompany. Four such meetings were held during the year on 26.04.2019 14.08.201912.11.2019 and 14.02.2020 to consider and approve the Quarterly and Yearly FinancialResults of the Company pursuant to the provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 152 of the Companies Act 2013and in accordance with the Articles of Association of the Company Shri.S.Hanumantha Rao(DIN: 00118801) Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.
Independent Directors existing prior to the Commencement of CorporateInsolvency Resolution Process (CIRP) will continue as such irrespective of their tenuresince the provisions of IBC Override the provisions of Companies Act2013.
The Resolutions proposing their re - appointment / appointments asDirectors will be placed before the Shareholders for their approval at the ensuing AnnualGeneral Meeting of the Company.
The Company has received declarations from all the IndependentDirectors of the Company confirming that they continue to meet with the criteria ofindependence as prescribed under sub-section (6) of Section 149 of the Companies Act 2013and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
None of the Directors of your Company is disqualified under Section 164(2) of the Companies Act 2013. As required by law this position is also reflected in theAuditors' Report
The following persons are Key Managerial personnel of the Company:
Shri G Srinivasa Raju : Managing Director Shri P Apser Hussen : Companysecretary
For Directors seeking appointment/re-appointment in the forthcomingAnnual General Meeting of the Company; the particulars as required to be disclosed inaccordance with Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Report.
The Board of Directors evaluated the annual performance of the Board asa whole its committee's and the directors individually in accordance with the provisionsof the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in the following manner:
Structured evaluation forms after taking into considerationinputs received from the Directors covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligations and governance for evaluationof the performance of the Board its Committee's and each director were circulated to allthe members of the Board along with the Agenda Papers.
The members of the Board were requested to evaluate by fillingthe evaluation forms and the duly filled in evaluation forms were required to be sent tothe Company Secretary in a sealed envelope or personally submitted to the Chairman at theconcerned meeting.
The Board also provided an individual feedback to the concerneddirector on areas of improvement if any.
A separate meeting of Independent Directors was held on 30th March2020 to evaluate the performance of the Chairman the Non Independent Directors the Boardand flow of information from management.
Particulars of Employees:
The information required pursuant to the provision of Section 197 readwith Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company are set out in Annexure-VI ofthis
Management Discussion and Analysis Report:
Management Discussion and Analysis forming part of this report asrequired under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015is attached hereto as Annexure- VII and forms part of this Report.
Your Company is committed to principles of good Corporate Governance.The Board of Director sensures that your Company is in compliance with all the applicableregulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015pertaining to Corporate Governance. A detailed report on Corporate Governance isattached as Annexure-VIIIand forms part of this report. Certificate from thePracticing Company Secretary confirming the compliance with the conditions of CorporateGovernance as stipulated under Regulation 34(3) read with Schedule Vof SEBI (ListingObligations and Disclosure Requirements) Regulations 2015is attached to this report.
Your Company has the following Wholly Owned Subsidiaries: DigitechBusiness Systems Limited:
The operations of M/s. Digitech Business Systems Limited have commencedin a small way. We have stepped up the marketing activities under the aegis of thisCompany and we hope to clock good turnover during the next year. Company has startedlooking for a strategic investor either to sell off or to join as a partner.
A separate statement containing the salient features of the FinancialStatement for the financial year ended 31st March 2020 of the aforesaid subsidiarycompanies are included in the Annual Report as Form AOC-1 as an 'Annexure -IX'. TheFinancial statements of the said Subsidiaries Companies are available for inspection bythe Shareholders at the Registered office of your Company. Your Company undertakes thatthe Financial statements of the Subsidiaries Companies shall be made available to theShareholders of the Company on demand.
Consolidated Financial Statements:
The consolidated financial statements of your Company for the financialyear 2019-20 are prepared in compliance with applicable provisions of the Companies Act2013 Accounting Standards and Listing Regulations as prescribed by the Securities andExchange Board of India (SEBI).
The consolidated financial statements have been prepared on the basisof audited financial statements of the Company and its subsidiaries.
Your Company has constituted an Audit Committee as per the requirementsof Section 177 of the Companies Act 2013. The details of the composition of the AuditCommittee as required under the provisions of Section 177(8) of the Companies Act 2013is given in the Corporate Governance Report furnished as part of the Annual Report. Duringthe year under review the Board has accepted all the recommendations of the AuditCommittee.
Internal Control Systems and their adequacy:
Your Company has an effective Internal Control System to prevent fraudand misuse of Company's resources and protect shareholders' interest. Your Company has anindependent Internal Audit Department to monitor and review and focus onthe compliances ofvarious business processes. The internal audit report along with audit findings andtracking of process improvements & compliancesis presented for review to the AuditCommittee of Board of Directors.
The Board of Directors of the Company have adopted various policieslike Related Party Transactions Policy Whistle Blower Policy Corporate SocialResponsibility Policy Risk Management Policy Dissemination of Material Events PolicyDocuments Preservation Policy Monitoring and Reporting of Trading by Insiders Code ofInternal Procedures and Conduct for Regulating Code of Practices and Procedures for FairDisclosures and such other procedures for ensuring the orderly and efficient conduct ofits business for safeguarding of its assets the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.
The Board of Directors on recommendation of the Audit Committeeestablished a vigil mechanism by framing a Whistle Blower Policy to deal with instance offraud and mismanagement if any. The Vigil Mechanism framework ensures that strictconfidentiality is maintained whilst dealing with concerns and also that no discriminationshall be meted out to any person for a genuinely raised concern. The designated officer/Audit Committee Chairman can be directly contacted to report any suspected or confirmedincident of fraud/ misconduct.
The Board of Directors on recommendation of the Nomination andRemuneration Committee framed a Nomination and Remuneration policy for selectionappointment and remuneration of Directors KMP and Senior Management and matters coveredu/s 178(3) of the Companies Act 2013. The details of the same are provided in theCorporate Governance Report.
The Policy is also posted in the Investors section of the Company'swebsite www.sujana.com.
Particulars of Loans Guarantees or Investments:
Particulars of Loans Guarantees and Investments as required under theprovisions of Section 186 of the Companies Act 2013 are provided in the notes to theFinancial Statements.
Risk Management :
The Risk Management programme at The Company is focused on ensuringthat risks are known and addressed. The Board of Directors on recommendation of the AuditCommittee established a robust Risk Management framework by framing a Risk ManagementPolicy to deal with all risks including possible instances of fraud and mismanagement ifany. The Risk Management Policy details the Company's objectives and principles of RiskManagement along with an overview of the Risk Management process procedures and relatedroles and responsibilities.
The Board is of the opinion that there are no elements of risks thatmay threaten the existence of the Company. The board periodically tracks the progress ofimplementation of the Risk Management policy.
Your directors are happy to report that the Industrial Relations havebeen extremely cordial at all levels throughout the year.
Sexual Harassment Policy:
The Company as required under the provisions of "The SexualHarassment of Women at Workplace (Prohibition Prevention and Redressal) Act 2013"has framed a Policy on Prohibition Prevention and Redressal of Sexual Harassment of Womenat Workplace and matters connected therewith or incidental thereto.
In the year under review the Company has not received any complaintunder the said Policy.
Environment and Social Obligation:
The Company's plants comply with all norms set up for clean and betterenvironment by the competent authorities. The Company undertakes regular checks /inspections including certification for the maintenance of the environment. The Companyvalues environmental 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.
Human Resource Management:
The Company believes that Human Resource is its most valuable resourcewhich has to be nurtured well and equipped to meet the challenges posed by the dynamics ofBusiness Developments. The Company has a policy of continuous training of its employeesboth in-house. The staff is highly motivated due to good work culture trainingremuneration packages and the values which the company maintains. Your Directors wouldlike to place on record their deep appreciation of all employees for rendering qualityservices and to every constituent of the Company be its customers shareholdersregulatory agencies or creditors. Industrial relations have remained harmonious throughoutthe year.
All the properties and insurable assets of the Company includingBuilding Plant and Machinery stocks etc. wherever necessary and to the extent requiredhave been adequately the covered.
Your Company accorded high priority to quality safety trainingdevelopment health and environment. The Company endeavours to ensure continuouscompliance and improvements in this regard.
The Management here bytake this opportunity to express their deep senseof gratitude to the Central State Government and Local Authorities FinancialInstitutions Banks Customers Dealers Vendors andall the stakeholders for theircontinued cooperation and support to your Company.
The Management wishes to express its appreciation to all the employeesof the Company for their outstanding contribution to the successful operations of theCompany.
The Management specially thank to the shareholders for their continuedconfidence and faith in the Company.
| ||By order of the Resolution Professional |
| ||FOR NEUEON TOWERS LIMITED |
| ||Dr. M. S. Sankar- |
| ||Resolution Professional |
|(IP Registration No.IBBI/IPA-001/IP-P00770/2017-18/11315) |
|(A Company under Corporate Insolvency Resolution Process |
|by NCLT order No.CP (IB) No. |
| ||679/07/HDB/2018) |
|Place: Hyderabad || |
|Date: 07.12.2020. || |