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Splendid Metal Products Ltd.

BSE: 513414 Sector: Metals & Mining
NSE: SMPL ISIN Code: INE215G01021
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Splendid Metal Products Ltd. (SMPL) - Director Report

Company director report

To

The Membersof Splendid Metal Products Limited

Your Directors and the Resolution Professional have pleasure inpresenting the Thirtieth Annual Report of your Company together with the Audited FinancialStatements of Accounts for the Financial Year ended 31" March 2020.

Company's Performance:

Your Directors hereby report that the Company has achieved a turnoverof Rs.3137.55 lakhs upto 31.03.2020 as against the turnover of Rs.45817.68 lakhs duringthe previous financial year ended 31.03.2019.

The highlights of the financial results are as follows:

(Rs. in lakhs)

Particular 2019-2020 2018-2019
Profit Before Depreciation & Interest (1667.37) (85569.11)
Financial Costs 3.89 179.60
Depreciation 3897.27 3137.95
Profit/Loss Before Tax (5568.53) (88886.66)
Provision for Tax
Current Tax - -
MAT credit relating to earlier years - -
- Deferred Tax (1229.03) (19933.75)
- Profit/Loss After Tax (4339.50) (68952.91)

Operations & Overall Performance:

During the year under review your Company reported total income of Rs.3298.15 Lakhs as against Rs.45871.10 lakhs of previous year. Your Company incurred lossbefore tax of Rs. 5568.53 lakhs as against loss of Rs.88886.66 lakhs in the previous year.After making a provision of Rs.3.89 Lakhs towards interest and Rs.179.60 Lakhs towardsdepreciation the current financial year closed with a net loss of Rs.4339.50 Lakhs asagainst net loss of Rs. 68952.91 Lakhs last year. Previous year figure include provisionmade against impairment of trade receivable and investments.

The net worth of the Company as on 31" March 2020 is (-) Rs117814.53 lakhs against (-) Rs. 113487 lakhs in 2018-19. Net worth has decreased by Rs.4327.53 lakhs.

Consolidated turnover was Rs. 3137.55 lakhs as against Rs 45817.68lakhs in the previous year and consolidated loss before Tax was Rs.7883.30 lakhs asagainst loss of Rs. 106045.39 lakhs in the previous year.

Dividend:

In view of the losses your Company does not recommend any dividendforthe year under review

Material Changes and Commitments:

No material change or commitment has occurred affecting the financialposition of the Company between the end of the financial year of the Company i.e. 31stMarch 2020 and the date of this report.

Details of significant and material Orders passed by the regulators orcourts or tribunals impacting the going concern status of the Company and the Company'soperations in future:

The Company petition (C.P.175/2013) filed by Standard Bank (Mauritius)Limited (SBML) against the Company u/s 433 of the Companies Act 1956 in connection withthe Corporate Guarantee furnished by the Company on behalf of its step- down subsidiaryOptimix Enterprises Limited Mauritius was admitted by the Hon'ble High Court ofJudicature at Hyderabad. The Company Petition No.175 of 2013 was disposed by the Hon'bleHigh Court on 06.12.2019 directing the parties to work out their remedies before theNational Company Law Tribunal in the on-going Corporate Insolvency Resolution Process("CIRP").

Members may kindly note that on 4*' April 2019 the Hon'ble NationalCompany Law Tribunal (NCLT) had admitted the petition for initiating the CorporateInsolvency Resolution Process under the provisions of the Insolvency Bankruptcy Code 2016(IBC). Further vide the aforesaid NCLT order and pursuant to Section 17 of the IBC thepowers of the Board of Directors stood suspended and such powers were vested with theInterim Resolution Professional Mr. T.Sathisan (IP Registration No.IBBI/IPA-001/IP-P00105/2017-2018/10212). His appointment was subsequently confirmed by theCommittee of Creditors ('COC') as the Resolution Professional (the 'RP'). Accordingly Mr.T. Sathisan in his capacity as RPtook control and custody of the management and operationsof the Company from 19"'April 2019. Hon'ble National Company Law Tribunal("NCLT") Hyderabad bench vide its order dated 1" October 2019 has grantedan extension of CIRP for a further period of 90 (Ninety) days with effect from 02.10.2019.The Hon'ble NCLT has also approved the applications of the RP for excluding certainperiods from the CIRP timeline.

During the CIRP period the process which included publication ofinvitation for submission of Expressions of Interest ("EOI") from eligibleinterested parties to submit Resolution Plans receipt and vetting of plans considerationof the plans by the Committee of Creditors detailed deliberations between the CoC and theProspective Resolution Applicants and voting on the final Resolution Plan was carried out.Initially two resolution plans were received but after preliminary round of negotiationsone of the bidders dropped out. Later multiple rounds of discussions and negotiations wereheld with the remaining bidder [consortium of Antanium Holdings Singapore (formerlyTritteras Holdings Pte Ltd) and Invent Assets Securitisation and Reconstruction Pvt Ltd]and the modified final resolution plan was put to vote in the 24h meeting ofthe CoC held on 8h

October 2020 through an e-voting process. The voting process concludedon 15 October 2020 with the Resolution Plan being approved by a majority of 91.18%. ThePlan was then filed with the Hon'ble NCLT on 16 October 2020vide IA No. 981/20 and it isawaitingthe approval of the said Adjudicating Authority

Deposits

Your Company has not accepted Deposits from Public or Members underChapter V of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014forthe year under review.

Related Party Transactions

All contracts/arrangements/transactions entered by the Company duringthe financial year with related parties were in ordinary course of business and on arm'slength basis. During the year the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material under Regulation 23 ofListing Regulation. Accordingly the disclosure of Related Party Transactions as requiredunder Section 134(3)(h) of the Companies Act 2013 in Form AOC - 2 is not applicable. ThePolicy on materiality of related party transactions and dealing with related partytransactions as approved by the Board is also posted in the Investors section of theCompany's website www.sujana.com. Your Directors draw attention of the members to Note no.30 to the financial statements which sets out related partydisclosures.

Prior omnibus approval is obtained on an annual basis for thetransactions with related parties which are of a foreseeable and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted and a statementgiving details of all transactions with related parties are placed before the AuditCommittee and Board 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's 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 2019-20 as Annexure-1 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.

Auditors:

(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. T.Raghavendra & Associates CharteredAccountants (Membership No.023806) will hold office until the conclusion of the ensuingAnnual General Meeting and will not seek re-appointment.

The Company is required to appoint another Auditor to hold office fromthe conclusion of this Annual General Meeting till the conclusion of the 31" AnnualGeneral Meeting. The Resolution Professional had recommended the appointment of M/s.Venugoal & Chenoy Chartered Accountants (Registration No.00 4671S) as the StatutoryAuditors of the Company for approval of the members.

The proposed Auditors shall hold office from the conclusion of the30"' Annual General Meeting till the conclusion of 31" Annual General Meeting ofthe Company. M/s. Venugoal & Chenoy Chartered Accountants have consented to theaforesaid appointment and confirmed that their appointment if made will be within thelimits specified under Section 141(3)(g) of the Companies Act 2013.

They have further confirmed that they are not disqualified to beappointed as the Statutory Auditors in terms of the Companies Act 2013 and the rules madethereunder. Pursuant to Section 139 of the Companies Act 2013 approval of the members isrequired for appointment of the Statutory Auditors and fixing their remuneration by meansof an ordinary resolution. Accordingly approval of the members is sought for appointmentof M/s. Venugoal & Chenoy Chartered Accountants as the Statutory Auditors of theCompany and to fix their remuneration.

During the year under review the Auditors of the Company have notreported any fraud as specified under Section 143 (12) of the Companies Act 2013 to theAudit Committee.

Statutory Auditors' Qualification / Comment on the Company's StandaloneFinancial Statements

i). The Company has defaulted in repayment of dues toBanks/Financial Institutions and all loans outstanding were classified as NPA's and wererecalled by all the Banks. Note 5 forming part of the Statement regarding interest onWorking Capital loans Term Loans and Electricity power charges for the last threequarters of non-operating units. The accumulated loss as on 31" March 2020 wouldhave been increased from Rs.l79864.05 lakhs to Rs.261666.07 lakhs had the Companyprovided for the same.

Management's response:

The Banks/ Financial Institutions have classified our loan accounts asNPA. The Company is currently undergoing Corporate Insolvency Resolution Pricess("CIRP) with effect from 04 April 2019. Hence the Company has not provided interestamounting to Rs.276.23 crores for the current financial year 2019-20 in the books ofaccount

i). The Company has been continuously making losses

consequently it net worth is negative and the Company's totalliabilities exceeded its total asset as at 31" March 2020 by Rs.(H7814.53 akhs).This indicates the existence of material uncertainty that may cast significant doubt onthe Company's ability to continue as a going concern.

Management's response:

A Resolution Plan duly approved by the Committee of Creditors hasbeen filed with the Hon'ble NCLT for confirmation. The said Plan proposes resolution ofall the debts of the Company and on its confirmation by the Hon'ble NCLT is expected toensure the continuance of the Company as a "going concern"

ii) . The dues to Banks/Financial Institutions as on 31.03.2020 as perCompany is Rs.242790.64 lakhs whereas the actual claims made by Banks/FIs and admittedby Resolution Professional is Rs.627652.66 lakhs.

Management's response:

The claims made by the lenders include elements of compound interestpenal interest and reversal of reliefs and concessions accorded to the Company as part ofearlier restructuring exercises the effect of which was not accounted for in the books aspart of normal business and industry practices since such additional elements werenormally expected to be waived or foregone by the lenders. However in view of thestatutory proceedings under the Insolvency and Bankruptcy Code 2016 the lenders filedclaims on the basis of their subsisting contractual rights and the same afterverification were admitted by the Resolution Professional. As noted hereinabove aResolution Plan duly approved by the Committee of Creditors has been filed with theHon'ble NCLT for confirmation. The said Plan proposes resolution of all the debts of theCompany and on its confirmation by the Hon'ble NCLT is expected to ensure the continuanceof the Company as a "going concern"

iii) . The trade receivable could not be verified as the confirmationof balances have not been received and made available to us. The Company's TradeReceivables aggregating to Rs.69344.06 Lakhs is more than three years old. The Companyhas not provided any bad debts in the books of account during the quarter. We are unableto form an opinion on the extent to which the debts may be recoverable.

Management's response:

Confirmation letters from debtors were submitted to auditors as on31.03.2019. After that no transactions were made during the Financial Year 2019-20.Accumulated provision for Bad debts provided up to 31.03.2020 is Rs.122611.36 lakhs onTrade Receivables of Rs. 164285.90 lakhs.

iv) . The Loans & advances could not be verified as theconfirmation of balances have not been received and made available to us. The Company'sloans and advances aggregating to Rs.10 351.73 Lakhs is more than three years old. TheCompany has not provided any bad debts in the books of account during the Quarter. We areunable to form an opinion on the extent to which the debts may be recoverable.

Management's response:

Accumulated Provision for Bad Loans & Advances is Rs. 12372.74lakhs on Rs. Total outstanding of Rsl8021.96 lakhs upto FY2019-20.

v) . The Company's Capital advances to the extent of Rs.5005.16 lakhs.We are unable to ascertain whether such balances are fully recoverable. Accordingly weare unable to ascertain the impact if any that may arise in case any of these advancesare subsequently determined to be doubtful of recovery. Had the Company provided for thesame the loss for the period would have been higher by the said amount.

Management's response: Self Explanatory

vi) . With regard to investments in unquoted equities of subsidiariesfor a value of Rs.5046.93 lakhs are valued at cost of investment however the presentrealizable value of these have not been ascertained by the management hence the same issubject to current valuation.

Management's response:

The matter has been dealt with as part of the Resolution Plan approvedby the CoC and awaiting confirmation of the Adjudicating Authority.

vii) . A winding up petition filed by Standard Bank (Mauritius) Ltd.in the High Court of Telangana & Andhra Pradesh against the Company for givingCorporate Guarantee for loan extended by the said bank to the step down subsidiary OptimixEnterprises Limited for Rs.4087.50 lakhs still pending.

Management's response:

The Petition for winding up was closed due to Corporate InsolvencyResolution Process having been initiated before NCLT Hyderabad.

viii) . The Company is not regular in payment of undisputed statutorydues towards ESI Provident Fund TDS and Goods & Service Tax during the year ended31" March 2020.

Management's response:

The Company having been found to have defaulted on its debtobligations a Corporate Insolvency Resolution Process was ordered by the Hon'ble NCLTHyderabad bench. As noted hereinabove a Resolution Plan duly approved by the Committeeof Creditors has been filed with the Hon'ble NCLT for confirmation. The said Planproposes resolution of all the debts of the Company and on its confirmation by the Hon'bleNCLT is expected to ensure the continuance of the Company as a "going concern"

ix) . Bank Statements were not available with the Company for all theBanks except that of Vizag Branch. Interest calculations are on the basis of the lastinterest rates on the outstanding balances.

Management's response:

As part of Corpoarte Insolvency Resolution Process all the banks havesubmitted claims. Statement for account opened toward expenses during the CIRP process isavailable through

netbankingfacility.

x) . The GST Returns are yet to be reconciled for all the Branchesexcept Vizag branch as returns are yet to be filed by the Company.

Management's response:

As on date GST Returns of Telangana for FY 2019-20 were filed. GSTReturns of Tamilnadu were not filed since February 2019 due to liquidity crunch andactivity in Tamilnadu was closed since

01.04.2019.

xi) . On account of the COVID-19 related lock-down restrictions wewere not able to physically observe the verification of inventory that was carried out bythe Management. Consequently we have performed alternate procedures to audit theexistence of Inventory as per the guidance provided by SA 501 "AuditEvidence-Specific Considerations for selected items" and have obtained sufficientaudit evidence to issue our unmodified opinion on these Standalone Finance Results.

Management's response: Self Explanatory

Statutory Auditors' Qualification / Comment on the Company'sConsolidated Financial Statement:

i). The Company has defaulted in repayment of dues to Banks/FinancialInstitutions and all loans outstanding were classified as N PA's and were recalled by allthe Banks. Note 5 forming part of the Statement regarding interest on Working Capitalloans Term Loans and Electricity power charges for the last three quarters ofnon-operating units. The accumulated loss as on 31" March 2020 would have beenincreased from Rs.192166.06 lakhs to Rs.273968.03 lakhs had the Company provided forthe same.

Management's response:

A Resolution Plan duly approved by the Committee of Creditors hasbeen filed with the Hon'ble NCLT for confirmation. The said Plan proposes resolution ofall the debts of the Company and on its confirmation by the Hon'ble NCLT is expected toensure the continuance of the Company as a "going concern"

i) . The Company has been continuously making losses consequentlyit net worth is negative and the Company's total liabilities exceeded its total asset asat 31" March 2020 by Rs.(125818.21 lakhs). This indicates the existence of materialuncertainty that may cast significant doubt on the Company's ability to continue a goingconcern.

Management's response:

A Resolution Plan duly approved by the Committee of Creditors hasbeen filed with the Hon'ble NCLT for confirmation. The said Plan proposes resolution ofall the debts of the Company and on its confirmation by the Hon'ble NCLT is expected toensure the continuance of the Company as a "going concern"

ii) . The dues to Banks/Financial Institutions as on 31.03.2020 asper Company is Rs.242790.64 lakhs whereas the actual claims made by Banks/FIs andadmitted by Resolution Professional is Rs.627652.66 lakhs.

Management's response: The claims made by the lenders includeelements of compound interest penal interest and reversal of reliefs

and concessions accorded to the Company as part of earlierrestructuring exercises the effect of which was not accounted for in the books as part ofnormal business and industry practices since such additional elements were normallyexpected to be waived or foregone by the lenders. However in view of the statutoryproceedings under the Insolvency and Bankruptcy Code 2016 the lenders filed claims on thebasis of their subsisting contractual rights and the same after verification wereadmitted by the Resolution Professional. As noted hereinabove a Resolution Plan dulyapproved by the Committee of Creditors has been filed with the Hon'ble NCLT forconfirmation. The said Plan proposes resolution of all the debts of the Company and on itsconfirmation by the Hon'ble NCLT is expected to ensure the continuance of the Company asa "going concern"

iii) . The trade receivable could not be verified as theconfirmation of balances have not been received and made available to us. The Company'sTrade Receivables aggregating to Rs.89293.16 Lakhs is more than three years old and inrespect of which the Company has provided only Rs.1221.22 Lakhs provision for debts in thebooks of account during the quarter. We are unable to form an opinion on the extent towhich the debts may be recoverable.

Management's response:

Confirmation letters from debtors were submitted to auditors as on31.03.2019. Afterthat no transactions were made during the Financial Year 2019-20.Accumulated provision for Bad debts provided up to 31.03.2020 is Rs. 152347.59 lakhs onTrade Receivables of Rs. 198869.69 lakhs.

iv) . The Loans & advances could not be verified as theconfirmation of balances have not been received and made available to us. The Company'sloans and advances aggregating to Rs.11124.26 Lakhs is more than three years old. TheCompany has not provided any bad debts in the books of account during the Quarter. We areunable to form an opinion on the extent to which the debts may be recoverable.

Management's response:

Accumulated Provision for Bad Loans & Advances is Rs. 12372.74lakhs on Total outstanding of Rs. 18476.95 lakhs up to FY 2019-20.

v) . The Company's Capital advances to the extent of Rs.5005.16 lakhs.We are unable to ascertain whether such balances are fully recoverable. Accordingly weare unable to ascertain the impact if any that may arise in case any of these advancesare subsequently determined to be doubtful of recovery. Had the Company provided for thesame the loss for the period would have been higher bythe said amount.

Management's response:

The matter has been dealt with as part of the Resolution Plan approvedby the CoC and awaiting confirmation of the Adjudicating Authority.

vi) . A winding up petition filed by Standard Bank (Mauritius)

Ltd. in the High Court of Telangana & Andhra Pradesh against theCompany for giving Corporate Guarantee for loan extended by the said bank to the step downsubsidiary Optimix Enterprises Limited for Rs.4087.50 lakhs still pending.

Management's response:

The Petition for winding up was closed due to Corporate InsolvencyResolution Process having been initiated before NCLT Hyderabad.

vii) . The Company is not regular in payment of undisputed statutorydues towards ESI Provident Fund TDS and Goods & Service Tax duringthe year ended31" March 2020.

Management's response:

The Company having been found to have defaulted on its debtobligations a Corporate Insolvency Resolution Process was ordered by the Hon'ble NCLTHyderabad bench. As noted hereinabove a Resolution Plan duly approved by the Committeeof Creditors has been filed with the Hon'ble NCLTfor confirmation. The said Plan proposesresolution of all the debts of the Company and on its confirmation by the Hon'ble NCLT isexpected to ensure the continuance of the Company as a "going concern"

viii) . Bank Statements were not available with the Company for all theBanks except that of Vizag Branch. Interest calculations are on the basis of the lastinterest rates on the outstanding balances.

Management's response:

We have only one operating Bank account i.e Bank of India ofKukatpally Branch Hyderabad. Other Bank accounts are either non-operating accounts orfrozen by banks. Hence we could not gettheses bankstatements

ix) . The GST Returns are yet to be reconciled for all the Branchesexcept Vizag branch as returns are yet to be filed by the Company.

Management's response:

As on date GST Returns of Telangana for FY 2019-20 have been filed.GST Returns of Tamilnadu were not filed since February 2019 due to liquidity crunch andactivity in Tamilnadu was closed since

01.04.2019.

x) . On account of the COVID-19 related lock-down restrictions we werenot able to physically observe the verification of inventory that was carried out by theManagement. Consequently we have performed alternate procedures to audit the existence ofInventory as per the guidance provided by in SA501 "Audit Evidence-SpecificConsiderations for selected items" and have obtained sufficient audit evidence toissue our unmodified opinion on these Standalone Finance Results.

Management's response: Self Explanatory

(b). Cost Auditors:

M/s. Nageswara Rao & Co Cost Accountants [Firm No.000332] havebeen appointed as the Cost Auditor of the Company for financial year 2020-21 pursuant toprovisions of Section 148 and other applicable provisions of the Companies Act 2013. Asrequired by Section 148 of the Companies Act 2013 necessary resolution has been includedin the notice convening the Annual General Meeting seeking ratification by the members tothe

remuneration proposed to be paid to the cost auditors for the financialyearending31" March 2021.

The Company is in process of filing the Cost Audit Report for thefinancial years 2016-172017-18 2018-19 and 2019-2020 with the Central Government.

(c) . Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013and rules framed there under the Resolution Professional has appointed Mrs. UshaBalasubramanian Company Secretaries (CP.NO.7444 FCS N0.9267) to undertake thesecretarial audit of the Company. The secretarial audit report issued by Mrs. UshaBalasubramanian Practicing Company Secretary for the financial year ending 31st March2020 is given in the Annexure- lll-A attached hereto and forms part of this Report.

Secretarial Auditors' comments on the Secretarial Audit Report:

Management's Response:

i). Company is in the process of identifying the women IndependentDirector to Comply the provisions of Section 149(1) of the Companies Act 2013.

Further to inform you that as per the provisions of IBC and provisionsof Regulation 15 (2A) and (2B) of SEBI LODR the provisions specified in regulation171819 and 21 shall not be applicable during the CIRP and the roles and responsibilitiesof the board of directors and the committees specified in the respective regulationsshall be fulfilled by the interim resolution professional or resolution professional.

(ii) . The Company has submitted the reason for delayed submission ofAudited (standalone and Consolidated) Financial Results for the quarter and Year ended31st March 2019 beyond the due date for submission with the Stock Exchanges on30.05.2019.

(iii) .The Company is in the process of filing the Cost Audit Reportsforthe financial years 2016-17 2017-18 2018-19 and 2019-20 with the Central Government

(iv) . Company is facing severe financial crisis and the Company isplanning to pay annual listingfee forthe years 2018-192019- 20and 2020-21 atthe earliest.

(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 2020. The report has been annexed herewithas "Annexure-lll-B"

Share Capital

The paid up equity share capital as on 31st March 2020 was Rs.15050.54Lakhs. 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 the Directors of the Company hold instrumentsconvertible 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.

Meetings:

The powers of the Board of Directors stood suspended and such powerswere vested with the Interim Resolution Professional Mr. T.Sathisan (IP RegistrationNO.IBBI/IPA-001/IP-P00105/2017- 2018/10212). His appointment was subsequently confirmed bythe Committee of Creditors ('COC') as the Resolution Professional (the 'RP'). AccordinglyMr. T. Sathisan in his capacity as RP took control and custody of the management andoperations of the Company from 19"'April 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. Five such meetings were held during the year on 30.05.2019

15.06.2019 14.08.2019 14.11.2019 and 14.02.2020 to consider andapprove the Quarterly and Yearly Financial Results of the Company pursuantto theprovisionsof SEBI (ListingObligationsand Disclosure Requirements) Regulations 2015.

Directors:

Pursuant to the provisions of Section 152 of the Companies Act 2013and in accordance with the Articles of Association of the Company Shri. G. Srinivasa Raju(DIN: 00132249) Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.

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.

Dr. K. Srinivasa Rao-DIN- 02257745) ceased to be an IndependentDirector of the Company with effect from 14.12.2019 due to completion of his 5 years term.

Mrs G.Uma Devi women and Independent Director has resigned with effectfrom 18.04.2019.

Mr. Nitil Pandya Nominee Director of Punjab National Bank hasresigned from the directorship of the Company with effect from 27.09.2019 consequent towithdrawal of his nomination by the said Bank. Resolution Professional and Committee ofCreditors had accepted the resignation of Mr. Nitil Pandya -Nominee Director in

their meeting held on 10.12.2019.

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(l)(b) of SEBI (ListingObligationsand Disclosure Requirements)Regulations 2015.

None of the Directors of your Company is disqualified under Section 164(2) of the Companies Act 2013. As required bylaw this position is also reflected in theAuditors' Report.

The following persons are Key Managerial Personnel of the Company:

Shri R. K. Birla: Managing Director (upto 30.05.2020)

Shri Shaik Ibraheem: Company Secretary

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.

Board Evaluation

Evaluation of performance of Directors was not undertaken during thisfinancial year on account of CIRP initiated against the Company w.e.f. 04.04.2019 wherethe powers of the Board of Directors (includingevaluatingthe performance of Board itsCommittee and individual Directors) stood suspended.

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 Report.

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 2015 is attached hereto as Annexure-VII and forms part of this Report.

Corporate Governance:

Your Company is committed to principles of good Corporate Governance.The Board of Directors ensures that your Company is in compliance with all the applicableregulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015pertaining to Corporate Governance. A detailed report on Corporate Governance is attachedas Annexure-VIII and forms part of this report. Certificate from the PracticingCompany Secretary confirming the compliance with the conditions of Corporate Governance asstipulated under Regulation 34(3) read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached to this report.

s. No Name of the Company Status Nature of Business Country of Incorporation Percentage of ownership interest
1 Glade Steel Private Limited Subsidiary It is engaged in the business of manufacturing distributing supplying selling and other wise dispose of Rounds Flats Squares Angles Channels Girders and Allied Products with installed capacity of 75.000 MT/per annum of re-rolling and 50.000 MT/per annum of MS ingots India 51.15%
2 Asian Tide Enterprises Limited Wholly Owned Subsidiary (WOS) It was incorporated in Hong Kong for carrying on the business of trading of Hong Kong 100%
3 Alpha Ventures Limited Wholly Owned Subsidiary {WOS) Alpha Ventures Limited has been promoted to carry out any object not prohibited bythe Companies Law {2004) Revision or as the same may be revised from time to time or any other law of the Cayman Islands. As per the law prevailing in Cayman Islands Cayman Islands 100%
4 Optimix Enterprises Limited Stepdown Subsidiary {WOS of Asian Tide Enterprises Limited) It was incorporated in Mauritius for carrying on the business or businesses which are not prohibited under the laws for the time being in force in the Republic of Mauritius. This includes (inter alia) to engage in the business of all forms of investments including but not limited to venture capital and private equity investments whether directly indirectly through any special purpose vehicles or otherwise. Mauritius 100%

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.

Audit Committee:

Subsequent to the initiation of the CIRP against the Company w.e.f.

04.04.2019 the Audit Committee of the Board of Directors could not beconstituted. Role and responsibilities of the Audit committee shall be fulfilled bytheResolution Professional as perthe proviso to Regulation 15(2B) of the SEBI (ListingObligations and Disclosure Requirement) Regulations 2015.

Internal Control Systemsand their adequacy:

The Company has adequate internal financial controls in place withreference to financial statements. These are continually reviewed by the Company tostrengthen the same wherever required. The internal control systems are supplemented byinternal audit carried out by an Independent firm of Chartered Accountants and periodicalreview by management. The Audit Committee of the Board addresses issues raised by boththe Internal Auditors and the Statutory Auditors.

Vigil Mechanism:

The Company has established a vigil mechanism by framing a WhistleBlower Policy to deal with instance of fraud and mismanagement if any. The VigilMechanism framework ensures that strict confidentiality is maintained whilst dealing withconcerns and also that no discrimination shall be meted out to any person for a genuinelyraised concern. The designated officer can be directly contacted to report any suspectedor confirmed incident of fraud/misconduct.

Remuneration Policy:

The Company has framed a Nomination and Remuneration policy forselection appointment and remuneration of Directors KMPand Senior Management and matterscovered u/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 theCompany's website 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 Company has in place a robust Risk Managementframework by framing a Risk Management Policy to deal with all risks including possibleinstances of fraud and mismanagement if any. The Risk Management Policy details theCompany's objectives and principles of Risk Management along with an overview of the RiskManagement process procedures and related roles and responsibilities. There are noelements of risks that may threaten the existence of the Company.

Industrial Relations:

Your Company's management is happy to report that the IndustrialRelations have been extremely cordial at all levels throughouttheyear.

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 underreview 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.The Company 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 remainedharmoniousthroughouttheyear.

Insurance:

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.

Quality:

Your Company accorded high priority to quality safety trainingdevelopment health and environment. The Company endeavours to ensure continuouscompliance and improvements in this regard.

Appreciations:

The Management hereby take this opportunity to express their deep senseof gratitude to the Central and State Government and Local Authorities FinancialInstitutions Banks Customers Dealers Vendors and all 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.

FOR SPLENDID METAL PRODUCTS LIMITED
T.SATHISAN
Resolution Professional
IP Reg No.: 1BBI/IPA-001/1P-P00105/2017-2018/10212
(A Company under Corporate Insolvency
Resolution Process by
NCLT order No. CP(IB)No. 666/7/HDB/2018)

 

PLACE: Hyderabad
DATE: 7* December 2020

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