To the members
The Directors submit annual report of S.S. Organics
Limited along with the audited financial statement for the year ended March 31 2017
1. Financial Results:
|Particulars ||Standalone || |
| ||2016-17 ||2015-16 |
|Gross Income ||87722389 ||124267069 |
|Less: Expenditure ||129975173 ||165923049 |
|Less: Interest & || || |
|Finance Charges ||5978041 ||5115458 |
|Less: Depreciation ||9008184 ||8240551 |
|Profit before tax/Loss || || |
|(1-2-3-4) ||(57239009) ||(55011989) |
|Less: Current Tax ||-- ||- |
|Less: Deferred Tax ||851091 ||(15836) |
|Profit available for || || |
|appropriations/Loss (5-7) ||(58090101) ||(54996153) |
|Profit brought forward/Loss ||(317706452) ||(262710299) |
|Balance carried || || |
|forward/Loss ||(375796553) ||(317706452) |
2. REVIEW OF PERFORMANCE AND STATE OF COMPANY AFFAIRS:
The promoters have already brought about Rs.1530.34 lacs (Rs.678.25 lacs in 2012 to2014 Rs 456.60 lacs in the year 2014-15 Rs301.07 lacs in the year 2015-16 and Rs.94.42lacs in the year 2016-17. But as the Hon'ble BIFR has abated on 1.12.2016 themanagement's continuous efforts in the improving the financial position of the Company didnot work out as per the strategies.
The management is working on improving the financial position and is confident aboutthe future growth of the Company.
3. Status with BIFR/NCLT:
The Ministry of Finance Department of Financial Services vide notification dated 25thNovember 2016 has repealed the Sick Industrial Companies (Special Provisions) Act 1985(SICA) with effect from 1st December2016 and Hon'ble BIFR stands dissolved.
Your Directors did not recommend any dividend for the year 2016-17.
5. Transfer to Reserves:
Your Company has not transferred any amount to the general reserve.
Dr. D. Sadasiva Reddy retiring director at the ensuing 24th AGM and being eligibleoffer himself for reappointment.
None of the independent Directors will retire at the ensuing 24th AGM of the Company.
7. Particulars of Loans Guarantees and investments:
Loans Guarantees and Investments covered under section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
8. Particulars of Contracts or arrangement made with related parties:
Contracts or arrangement made with related parties during the year under review is asper the provisions of Section 188(1) of the Companies Act 2013. The said contracts orarrangement was approved and considered by the Board and Audit Committee.
9. Particulars of Contracts or arrangement made with related parties:
No contracts or arrangement made with related parties during the year as per theSection 188(1) of the Companies Act 2013.
10. Material changes and commitment affecting financial position between the end of thefinancial year and date of report:
There is no material changes and commitment affecting financial position of the Companyfor the financial year 2016-17.
11. Directors Responsibility Statement:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their
Knowledge and ability confirm that:
i. In preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the
Company at the end of the financial year and of the profit and loss of the Company forthat
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. They have prepared the annual accounts on a going concern;
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the
Company's internal financial controls were adequate and effective during the financialyear 2016-17
12. Number of meetings of the Board:
Six meetings of the board were held during the year. For details of the meetings of theboard please refer to the corporate governance report which forms part of this report.
13. Declaration by independent Directors:
The Company has received necessary declaration from each independent director undersection 149(7) of the Companies Act 2013. That he meets the criteria of independence laiddown in Section 149(6) of the Companies Act 2013.
14. Board Evaluation:
As required under the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulation2015the period; Board has carried outthe annual performance evaluation of its own performance the Directors individually aswell as the evaluation of the working of its Audit Nomination and Remuneration and otherCommittees.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc.
The performance evaluation of independent Directors has been done by the entire Boardof Directors excluding the Director being evaluated. The performance evaluation ofChairman and Non Independent Directors was carried out by the Independent Directors whoalso reviewed the performance of the Secretarial Department.
. The Director expressed their satisfaction with the evaluation process.
15. Policy on Director's appointment and remuneration and other details.
The Company's policy on Director's appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the Director's report.
16. Internal financial control systems and their adequacy.
The Internal Financial Control systems is explained in Management Discussion Analysis.
17. Audit Committee:
Your Company has constituted the Audit Committee within the provisions laid down inSection 177(2) of Companies Act 2013 and read with the regulation 18 of SEBI (LODR)2015.
18. Extract of Annual Return:
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format in appended as Annexure I.
The Statutory Auditor of the Company VDNR & Associates who was appointed atthe Extra Ordinary General Meeting held on 18th March 2013 and thereafter was reappointedat subsequent AGM resigns as Statutory Officer of the
The Board of Directors based on the recommendation of audit committee subject to theapproval of Shareholders approved the appointment of Statutory Auditor Gowri Shankar& Associates Chartered Accountants (Firm Registration No.015625S) Hyderabad intheir meeting held on 30th May 2017.
Pursuant to the provisions of sections 139 141 and 142 of the Companies Act 2013 theappointment of. Gowri Shankar & Associates Chartered Accountants (FirmRegistration No.015625S)Hyderabad as the Statutory Auditors of the Company to hold theoffice from the conclusion of this meeting till the conclusion of 29th Annual GeneralMeeting subject to ratification by the members at every Annual General Meeting is placedfor the approval
Secretarial Auditors :
Mrs. N. Vanitha Practicing Company Secretaries representing. P.S. Rao & Associateswas appointed to conduct the secretarial audit of the Company for the Financial Year2016-17 as required under Section 204 of the Companies Act 2013 and Rules thereunder.The Secretarial Audit Report for FY 2016-17 forms part of the Annual Report as Annexure IIto the Board's Report.
The Board of Directors based on the recommendation of Audit Committee re-appointed M/sAmarnadha Reddy & Co. as Internal Auditor of the Company.
20. Particulars of Employees:
The information required under section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow: a. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the Financial Year:
|Directors ||Ration to median remuneration |
|V.N. Sunanda Reddy ||14.28 Times |
|Sai Sudhakar Vankineni ||12.85 Times |
"The Company has not paid any remuneration to the non-executive directors of theCompany for the Financial Year 2016-17."
b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the Financial Year:"During theFinancial Year 2016-17 there is no increase in the remuneration of each Director
Chief Executive Officer Chief Financial Officer Company Secretary of theCompany." c. The Percentage increase in the median remuneration of employeesin the Financial Year: 14.28% d. The number of permanent employees on the rolls ofCompany: 94. e. The explanation on the relationship between average increase inremuneration and Company Performance:
On an average employees at factory received an annual increase of 14.28%. Theindividual increments varied from 13% to 26% based on individual performance.
f. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|Aggregate remuneration of Key Managerial Personnel (KMP) in FY 2016-17 ||Rs. 4739144 |
|Total Revenue ||Rs. 87722389 |
|Remuneration of KMP's (as % of Revenue) ||5.39 % |
|Profit Before Tax (PBT) ||Rs. (57239009) |
|Remuneration of KMP (as % of PBT) ||8.27 % |
g. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
|Particulars ||Mr. V.N. Sunanda Reddy Managing Director ||Dr. Sai Sudhakar Vankineni Executive Director ||Sri Y Hari Priya* Company Secretary and Compliance Officer |
|Remuneration in FY 2016-2017. ||2400000 ||2160000 ||179144 |
|Revenue (Rs.) || ||87722389 || |
|Remuneration as % of revenue ||2.73 ||2.46 ||0.20 |
|Profit Before Tax (PBT) || ||(57239009) || |
|Remuneration (as % of PBT) ||(4.19) ||(3.77) ||(0.31) |
* Sri Y. Hari Priya was appointed as Company Secretary and Compliance Officerw.e.f.16th September2016 and resigned on 14th March2017 h. The Ratio of theremuneration of the highest paid Director to that of the employees who are not Directorsbut receive remuneration in excess of the highest paid Director during the year: None.
i. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that the remuneration is as per the remuneration policy of theCompany.
21. Conservation of Energy Research And Development Technology Absorption ForeignExchange Earnings and outgo.
The particulars as prescribed under Sub-Section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are enclosed as Annexure III tothe Board's Report.
22. Auditor Qualification / Remarks
The auditor has pointed out in his report on Standalone Financial Statement for theyear ending 31st March2017 that the Company has defaulted in repayment of loans orborrowings from IKF Finance Limited the said default was due to the current financialposition of the Company.
Your Directors wish to express their gratitude to the central and state governmentinvestors analysts financial institutions banks business associates and customers themedical profession distributors and suppliers for their whole-hearted support. Yourdirectors commend all the employees of your company for their continued dedicationsignificant contributions hard work and commitment.
| ||For and on behalf of the Board |
| ||For S.S. Organics Limited |
| ||Sd/- |
| ||V.N. Sunanda Reddy |
| ||Chairman and Managing Director |
| ||(DIN : 00058317) |
|Place: Hyderabad. || |
|Date: 05th August 2017 || |