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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 Members of Splendid Metal Products Limited Your Directors have pleasure inpresenting the Twenty Eight Annual Report of your Company together with the AuditedFinancial Statements of Accounts for the Financial Year ended 31st March 2018.

Company's Performance:

Your Directors hereby report that the Company has achieved a turnover of Rs. 51495.04lakhs upto 31.03.2018 as against the turnover of Rs. 131986.52 lakhs during the previousfinancial year ended 31.03.2017.

The highlights of the financial results are as follows:

(Rs. In Lakhs)

Particulars 2017-2018 2016-2017
Profit Before Depreciation & Interest (78152.85) (13708.47)
Financial Costs 247.24 26161.36
Depreciation 3328.77 3370.03
Profit/Loss Before Tax (81728.86) (43239.86)
Provision for Tax
- Current Tax - -
- MAT credit relating to earlier years 211.57 -
- Deferred Tax (8741.78) (9064.70)
Profit/Loss After Tax (73198.65) (34175.16)
Balance of profit brought forward from earlier years (33483.57) 693.67
Add:Excess Provision for IT written off - -
Profit available for appropriation - -
Appropriations:
Proposed Dividend:
- Equity - -
- Preference - -
- Dividend Tax - -
Balance of Profit (106628.35) (33483.57)

Operations & Overall Performance:

During the year under review your Company reported total income of Rs.51791.70 Lakhsas against Rs. 132026.92 lakhs of previous year. Your company incurred loss before taxof Rs. 81728. 86 lakhs as against loss of Rs. 43239.86 lakhs in the previous year. Aftermaking a provision of Rs. 247.24 Lakhs towards interest and Rs. 3328.77

Lakhs towards depreciation the current financial year closed with a net loss of Rs.73198.65 Lakhs as against net loss of Rs.34175.16 Lakhs last year. The net worth of theCompany as on 31st March 2018 is (-) Rs 44569.39 lakhs against Rs. 28575.39 lakhs in2016-17. Net worth is decreased by Rs. 73144.78 lakhs.

The consolidated turnover was Rs. 53743.23 lakhs as against Rs 156141.95 lakhs in theprevious year and Consolidated Loss before Tax of Rs.95396.00 lakhs as against loss ofRs. 42971.44 lakhs in the previous year.

There are overdues payable to the lenders as mentioned in the Auditors' Report. TheCompany has approached lenders for resolution of financial problems by way of CDR/SDRroute and the same could not yield positive results and presently OTS proposal by theprospective strategic investors is put forth before the lenders. If this is accepted bythe lenders your Company is hopeful of reviving its operations in full swing.

However a Special Resolution under Section 180(1)(a) of the Companies Act 2013 forapproving the Sale / Disposal of Asset(s)/Undertakings of the Company and/or itssubsidiaries has been set out in the Notice calling for the ensuing Annual General Meetingto be held on 29.09.2018 for the purpose of clearing the dues of the lenders under OneTime Settlement as may be agreed by the Lenders.

Dividend:

In the absence of profit your directors are unable to declare any dividend for thefinancial year 2017-18. Your Company has always emphasized on achieving operationalexcellence and continues to focus on customer satisfaction and delight. Backed by strongfundamentals and robust plans your Company is fully prepared to face current challengesand benefit from expected medium and long term growth in Indian economy.

Prospects:

The Government is undertaking proactive policy initiatives for Infrastructuredevelopment and Industrial growth which will accelerate steel demand in line witheconomic growth. However concerns like poor availability of iron ore and inconsistentquality as well as high import dependency of coking coal need to be addressed.

Material Changes and Commitments:

There is no material change and commitment has occurred affecting the financialposition of the Company between the end of the financial year of the Company i.e. 31stMarch 2018 and the date of this report.

Details of significant and material Orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and the Company's operationsin 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 with the CorporateGuarantee furnished by the Company on behalf of its step down subsidiary OptimixEnterprises Limited Mauritius was admitted by the Hon' ble High Court of Judicature atHyderabad for the States of Telangana and Andhra Pradesh. The Company has preferred appealOSA 12 of 2015 against the said admission. In OSA 12 of 2015 the Hon'ble High Court on28.08.2016 has dismissed as in fructuous. The Company Petition No.175 of 2013 is pendingfor disposal. The Company is also exploring the process of settlement with Standard Bank(Mauritius) Limited.

Except the above there are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status of the Company and the Company'soperations in future.

Deposits:

Your Company has not accepted Deposits from Public or Members under Chapter V of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 for the yearunder review.

Related Party Transactions:

The Board of Directors on recommendation of the Audit Committee framed a policy forRelated Party Transactions which includes matters covered u/s 178(3) of the Companies Act2013. The details of the same are provided in the Corporate Governance Report. The Policyis also posted in the Investors section of the Company's website.

All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were 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. The requisite details of the related partytransactions entered into during the financial year are provided in Annexure-I includedin this report. Suitable disclosure as required by the Accounting Standards (AS18) hasbeen made in the notes to the Financial Statements. All Related Party Transactions areplaced before the Audit Committee as also the Board for approval where ever required.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof a foreseeable 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 on a quarterly basis.

None of the Directors other than to the extent of their shareholding receipt ofremuneration / commission has any pecuniary relationships or transactions vis--vis theCompany.

Corporate Social Responsibility:

The Board of Directors on recommendation of the Corporate Social ResponsibilityCommittee framed a Corporate Social Responsibility Policy in consonance with Section 135of the Companies Act 2013 read with the rules framed there under duly indicating theactivities to be undertaken by the Company as specified in the Schedule VII of theCompanies Act 2013. The Corporate Social Responsibility Policy is posted in the Investorssection of the Company's website.

The Annual Report on CSR activities is annexed herewith as Annexure - II andforms part of this report.

Directors' Responsibility Statement:

Directors' Responsibility Statement as required under the provisions of Section 134(3)(c) of the Companies Act 2013 is given in the Annexure-III attached hereto andforms part of this Report.

Auditors:

(a) Statutory Auditors:

Members of the Company at the Annual General Meeting (‘AGM') held on 30thSeptember 2016 approved the appointment of M/s. T.Raghavendra & Associates

Chartered Accountants (Membership No.023806) as Statutory Auditors of the Company tohold office from the conclusion of 26th Annual General Meeting of the Company till theconclusion of the 30th Annual General Meeting of the Company. M/s. T.Raghavendra &Associates has audited the book of accounts of the Company for the Financial Year endedMarch 31 2018 and have issued the Auditors' Report thereon.

In terms of the provisions relating to statutory auditors forming part of the CompaniesAmendment Act 2017 notified on May 7 2018 ratification of appointment of StatutoryAuditors at every AGM is no more a legal requirement. Accordingly the Notice conveningthe ensuing AGM does not carry any resolution on ratification of appointment of StatutoryAuditors. However M/s. T.Raghavendra & Associates has confirmed that they areeligible to continue as Statutory Auditors of the Company to audit the books of accountsof the Company for the Financial Year ending March 31 2019 and accordingly M/s.T.Raghavendra & Associates will continue to be the Statutory Auditors of the Companyfor Financial Year ending March 31 2019.

Notes to the accounts as referred in the Auditor's Report are self-explanatory and doesnot contain any qualification and therefore do not call for any further comments orexplanations.

(b) Cost Auditors:

The Board of your Company has reappointed M/s. Nageswara Rao & Co Cost Accountants[Firm No.000332] as the Cost Auditor of the Company for financial year 2018-19 pursuant toprovisions of Section 148 and other applicable provisions of the Companies Act 2013. Thesaid Auditors have confirmed that their appointment if made shall be within the limitsas prescribed under Section 141(3) of the Companies Act 2013. The Cost Audit Report shallbe submitted along with full information and explanation on every reservation orqualification contained therein if any and Annexure to the Central Government withinstipulated time period. As required by Section 148 of the Companies

Act 2013 necessary resolution has been included in the notice convening the AnnualGeneral Meeting seeking ratification by the members to the remuneration proposed to bepaid to the cost auditors for the financial year ending 31st March 2019.

The Cost Audit Reports the financial year ended March 31 2018 were filed within theprescribed period.

(c) Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules framedthere under the Board of Directors on recommendation of the Audit Committee appointedShri Y Ravi Prasada Reddy proprietor of M/s RPR & Associates Company Secretaries toundertake the secretarial audit of the Company. The secretarial audit report issued byShri Y Ravi Prasada Reddy Practicing Company Secretary for the financial year ending 31stMarch 2018 is given in the Annexure - IV attached hereto and forms part of thisReport. There are no qualifications reservations or adverse remarks made by thesecretarial auditor and the observation made is self explanatory and requires no furtherexplanation from the Board.

Share Capital:

The paid up equity share capital as on 31st March 2018 was Rs.15050.54 Lakhs. Duringthe year 2017-18 there was no change in the share capital of the Company.

The Company has not issued any share with differential voting rights nor has grantedany stock options or sweat equity as on 31st March 2018. None of the Directors of theCompany 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 and rules framedthere under the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure- V and forms part of this Report.

Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:

Particulars with respect to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 are given in the Annexure - VI attachedhereto and forms part of this Report.

Meetings:

During the year under review 4 (Four) board meetings were held on May 30th 2017August 14th 2017 November 14th 2017 and February 14th 2018. The maximum time gapbetween any two consecutive meetings was within the period prescribed under the CompaniesAct 2013 and and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Directors:

The Board has appointed Smt G.Uma Devi as Additional Director (Independent Director)w.e.f 13th October2017 and now it is recommended her appointment to be regularized and beappointed for a period of 5 (Five) years. Her appointment on the Board shall also fulfillthe requirement of a Woman Director on the Board of the Company as required under theCompanies Act 2013 and Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Pursuant to the provisions of Section 152 of the Companies Act 2013 and in accordancewith the Articles of Association of the Company Shri. R K Birla Managing Director of theCompany will retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment. The Resolutions proposing their re-appointment/appointments as Directors will be placed before the Shareholders for their approval at theensuing Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they continue to meet with the criteria of independence as prescribedunder sub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. None of theDirectors of your Company is disqualified under Section 164 (2) of the Companies Act2013. As required by law this position is also reflected in the Auditors' Report.

The following persons are Key Managerial Personnel of the Company:

Shri R.K.Birla : Managing Director

Shri S Lakshman Rao: Chief Financial Officer Shri Shaik Ibraheem : Company SecretaryShri Ch. Narayana Rao resigned as Chief Financial Officer of the Company and Shri S.Lakshman Rao appointed as Chief Financial Officer of the Company w.e.f. 30.05.2018.

For Directors seeking appointment/re-appointment in the forthcoming Annual GeneralMeeting of the Company; the particulars as required to be disclosed in accordance withRegulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of this Report.

Board Evaluation:

The Board of Directors evaluated the annual performance of the Board as a whole itscommittee's and the directors individually in accordance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 in the following manner:

• Structured evaluation forms 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 for evaluation of theperformance of the Board its Committee's and each director were circulated to all themembers of the Board along with the Agenda Papers.

• The members of the Board were requested to evaluate by filling the evaluationforms and the duly filled in evaluation forms were required to be sent to the CompanySecretary in a sealed envelope or personally submitted to the Chairman at the concernedmeeting.

• The Board also provided an individual feedback to the concerned director onareas of improvement if any.

A separate meeting of Independent Directors was held on 30th March 2018 to evaluatethe performance of the Chairman the Non Independent

Directors the Board and flow of information from management.

Particulars of Employees:

The information required pursuant to the provision of Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company are set out in Annexure - VII of this Report.

Management Discussion and Analysis Report:

Management Discussion and Analysis forming part of this report as required underRegulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is attached hereto as Annexure - VIII and forms part of this Report..

Corporate Governance:

Your Company is committed to principles of good Corporate Governance. The Board ofDirectors ensures that your Company is in compliance with all the applicable regulationsof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 pertaining toCorporate Governance. A detailed report on Corporate Governance is attached as Annexure- IX and forms part of this report. Certificate from the Practicing Company Secretaryconfirming the compliance with the conditions of Corporate Governance as stipulated underRegulation 34(3) read with Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached to this report.

Subsidiaries of the Company:

Details of the subsidiaries are given below:

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 75000 MT/per annum of re-rolling and 50000 MT/per annum of MS ingots India 51.15%
2 Asian Tide Enterprises Limited Wholly Owned Subsidiary It was incorporated in Hong Kong for carrying on the business of trading of goods and services with accent on procuring raw materials (in bulk) for manufacturing activities of the Company (melting scarp for its rolling division) and sale surplus in the market. Hong Kong 100%
3 Alpha Ventures Limited Wholly Owned Subsidiary (WOS) Alpha Ventures Limited has been Cayman promoted to carry out any object Islands not prohibited by the 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 100%
4 Optimix Enterprises Limited Stepdown Subsidiary (WOS of Asian Tide Enterprises Limited) It was incorporated in Mauritius 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. 100%

A separate statement containing the salient features of the Financial Statement for thefinancial year ended 31st March 2018 of the aforesaid subsidiary companies are includedin the Annual Report as Form AOC-1 as an ‘Annexure -X'. The Financial statements ofthe said Subsidiaries Companies are available for inspection by the Shareholders at theRegistered office of your Company. Your Company undertakes that the Financial statementsof the Subsidiaries Companies shall be made available to the Shareholders of the Companyon demand.

Consolidated Financial Statements:

The consolidated financial statements of your Company for the financial year 2017-18are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standards and Listing Regulations as prescribed by the Securities and ExchangeBoard of India (SEBI).

The consolidated financial statements have been prepared on the basis of auditedfinancial statements of the Company and its subsidiaries.

Audit Committee:

Your Company has constituted an Audit Committee as per the requirements of Section 177of the Companies Act 2013. The details of the composition of the Audit Committee asrequired under the provisions of Section 177(8) of the Companies Act 2013 is given inthe Corporate Governance Report furnished as part of the Annual Report. During the yearunder review the Board has accepted all the recommendations of the Audit Committee.

Internal Control Systems and their adequacy:

Your Company has an effective Internal Control System to prevent fraud and misuse ofCompany's resources and protect shareholders' interest. Your Company has an independentInternal Audit Department to monitor and review and focus on the compliances of variousbusiness processes. The internal audit report alongwith audit findings and tracking ofprocess improvements & compliances is presented for review to the Audit Committee ofBoard of Directors.

The Board of Directors of the Company have adopted various policies like Related PartyTransactions

Policy Whistle Blower Policy Corporate Social Responsibility Policy Risk ManagementPolicy Dissemination of Material Events Policy Documents Preservation Policy Monitoringand Reporting of Trading by Insiders Code of Internal Procedures and Conduct forRegulating Code of Practices and Procedures for Fair Disclosures and such otherprocedures for ensuring the orderly and efficient conduct of its business for safeguardingof its assets the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

Vigil Mechanism:

The Board of Directors on recommendation of the Audit Committee established a vigilmechanism by framing a Whistle Blower Policy to deal with instance of fraud andmismanagement if any. The Vigil Mechanism framework ensures that strict confidentialityis maintained whilst dealing with concerns and also that no discrimination shall be metedout to any person for a genuinely raised concern. The designated officer/ Audit CommitteeChairman can be directly contacted to report any suspected or confirmed incident of fraud/misconduct.

Remuneration Policy:

The Board of Directors on recommendation of the Nomination and Remuneration Committeeframed a Nomination and Remuneration policy for selection appointment and remuneration ofDirectors KMP and Senior Management and matters covered u/s 178(3) of the Companies Act2013. The details of the same are provided in the Corporate Governance Report. The Policyis also posted in the Investors section of the Company's website www.sujana.com.

Particulars of Loans Guarantees or Investments:

Particulars of Loans Guarantees and Investments as required under the provisions ofSection 186 of the Companies Act 2013 are provided in the notes to the FinancialStatements.

Risk Management :

The Risk Management programme at The Company is focused on ensuring that risks areknown and addressed. The Board of Directors on recommendation of the Audit Committeeestablished a robust Risk Management framework by framing a Risk Management Policy to dealwith all risks including possible instances of fraud and mismanagement if any. The RiskManagement Policy details the Company's objectives and principles of Risk Management alongwith an overview of the Risk Management process procedures and related roles andresponsibilities. The Board is of the opinion that there are no elements of risks that maythreaten the existence of the Company. The board periodically tracks the progress ofimplementation of the Risk Management policy.

Industrial Relations:

Your directors are happy to report that the Industrial Relations have been extremelycordial at all levels throughout the year.

Sexual Harassment Policy:

The Company as required under the provisions of "The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013" has framed a Policy onProhibition Prevention and Redressal of Sexual Harassment of Women at Workplace andmatters connected therewith or incidental thereto.

In the year under review the Company has not received any complaint under the saidPolicy.

Environment and Social Obligation:

The Company's plants comply with all norms set up for clean and better environment bythe competent authorities. The Company undertakes regular checks / inspections includingcertification for the maintenance of the environment. The Company values environmentalprotection and safety as the major considerations in its functioning. The Company hasadequate effluent Treatment Plants to prevent pollution. The Company is continuouslyendeavoring to improve the health and quality of life in the communities surrounding itsindustrial complexes.

Human Resource Management:

The Company believes that Human Resource is its most valuable resource which has to benurtured well and equipped to meet the challenges posed by the dynamics of BusinessDevelopments. The Company has a policy of continuous training of its employees bothin-house. The staff is highly motivated due to good work culture training remunerationpackages and the values which the company maintains. Your Directors would like to placeon record their deep appreciation of all employees for rendering quality services and toevery constituent of the Company be its customers shareholders regulatory agencies orcreditors. Industrial relations have remained harmonious throughout the year.

Insurance:

All the properties and insurable assets of the Company including Building Plant andMachinery stocks etc. wherever necessary and to the extent required have beenadequately the covered.

Quality:

Your Company accorded high priority to quality safety training development healthand environment. The Company endeavours to ensure continuous compliance and improvementsin this regard.

Appreciations:

The Board of Directors take this opportunity to express their deep sense of gratitudeto the Central State Government and Local Authorities Financial Institutions BanksCustomers Dealers Vendors and all the stakeholders for their continued cooperation andsupport to your Company.

The Board of Directors wishes to express its appreciation to all the employees of theCompany for their outstanding contribution to the successful operations of the Company.

The Board specially thank to the shareholders for their continued confidence and faithin the Company.

BY ORDER OF THE BOARD

R.K.BIRLA S.HANUMANTHA RAO
Place : Hyderabad Managing Director Director
Date : August 29th 2018 DIN:00118776 DIN:00118801

Annexure - I Form No. AOC-2

Details of Related Party Transactions

(Pursuant to Clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

1. Details of contracts or arrangements or transactions not at arm's lengthbasis : NIL

All contracts or arrangement or transaction with related parties at arm's length basis

2. Details of material contracts or arrangement or transactions at arm's lengthbasis:

S. No. (a) Name(s) of the related party and nature of relationship (b) Nature of contracts/ arrangements/ transactions (c) Duration of the contracts/ arrangements/ transactions (d) Salient terms of the contracts or arrangements or transactions including the value if any: (e) Date(s) of approval by the Board if any: (f) Amount paid as advances if any:
1 Sujana Universal Industries Ltd. (Group Company) Sales & Purchases of Materials On Going Based on transfer pricing guidelines Not applicable Not applicable
2 Neueon Towers Ltd. (Group Company) Sales & Purchases of Materials On Going Based on transfer pricing guidelines Not applicable Not applicable
3 Glade Steel Pvt. Ltd. Sales & Purchases of Materials On Going Based on transfer pricing guidelines Not applicable Not applicable

 

BY ORDER OF THE BOARD
R.K. BIRLA S. HANUMANTHA RAO
Place: Hyderabad Managing Director Director
Date: August 29th 2018 DIN:00118776 DIN:00118801

Annexure - III

Directors' Responsibility Statement

Pursuant to the requirement of Section 134(3)(c) of the Companies Act 2013 and on thebasis of compliance certificate received from the executives of the Company and subject todisclosures in the Annual Accounts as also on the basis of the discussion with theStatutory Auditors of the Company from time to time and to the best of their knowledgeand information furnished the Board of Directors states: I. That in preparation of theAnnual Accounts for the year ended 31st March 2018; all the applicable AccountingStandards prescribed by the Institute of Chartered Accountants of India have been followedalong with proper explanation relating to material departures if any.

II. That the Directors have adopted such accounting policies as selected inconsultation with Statutory Auditors and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the loss of theCompany for the financial year ended 31st March 2018.

III. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities. IV. That the Annual Accounts for the year ended 31st March 2018has been prepared on a going concern basis. V. That proper internal financial control werein place and that the financial controls were adequate and were operating effectively. VI.That systems to ensure compliance with the provisions of all applicable laws were in placeand were adequate and operating effectively.

BY ORDER OF THE BOARD

R.K.BIRLA S.HANUMANTHA RAO
Place: Hyderabad Managing Director Director
Date: August 29th 2018 DIN:00118776 DIN:00118801

Annexure - VI

Statement of particulars of the conservation of energy technology absorption foreignexchange earnings and outgo as per Rule 8 of Companies (Accounts) Rules 2014

A. Conservation of energy- a. Steps taken or impact on conservation of energy: NILb. Steps taken by the company for utilising alternate sources of energy: NIL c. Capitalinvestment on energy conservation equipment: NIL

B. Technology absorption-a. Efforts made towards technology absorption; NIL b. Thebenefits derived like product improvement cost reduction product development or importsubstitution; NIL c. In case of imported technology (imported during the last three yearsreckoned from the beginning of the financial year) NIL i. the details of technologyimported; ii. the year of import; iii. whether the technology been fully absorbed; iv. ifnot fully absorbed areas where absorption has not taken place and the reasons thereof;d. Details of the expenditure incurred on Research and Development. NIL

C. Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows

Rs. In Lakhs.
Particulars Amount
Receipts
Share Capital/Share application money 0
Foreign Loans 0
Exports 0
Others 0
Total 0
Payments
Imports 0
Travelling Expenses Others 0
Total 0

Annexure - VII

Details pertaining to remuneration as required u/s 197(12) of The Companies Act 2013read with rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

1. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2017-18 percentage increase inremuneration of each Director Chief Financial Officer and Company Secretary in thefinancial year 2017-18 and the comparison of remuneration of each Key ManagerialPersonnel (KMP) against the performance of the Company are as under:

S. No. Name of the Director / KMP (Designation) Remuneration for FY 2017-18 (in lacs) Ratio of remuneration to the median remuneration of the employees % increase in remuneration in the FY 2017-18
01 R.K.Birla (Managing Director) 0.00 0.00 Nil
02 Ch. Narayana Rao (Chief Financial Officier) 26.27 14.76 Nil
03 Shaik Ibraheem (Company Secretary) 10.73 6.03 Nil

Notes:

(a) None of the other directors expect as disclosed above draws any remuneration in theCompany. (b) The median remuneration of employees of the Company during the financial year2017-18 was Rs. 1.78 lakhs against the median remuneration of Rs. 2.42 lakhs of theprevious year.

(c) The number of permanent employees on the rolls of Company as on March 31st 2018 is317. (d) Shri S. Lakhsman Rao appointed as Chief Financial Officer in place of Shri Ch.Narayana Rao with effect from 30th May 2018.

2. The Explanation on the relationship between average increase in remunerationand company performance:

The average increase in remuneration during the financial year 2017-18 is Nil. Thetotal employees cost for the financial year ended 31st March 2018 is Rs. 1030.23 lakhsagainst Rs. 1280.08 lakhs for the financial year ended 31st March 2017. During the yearthe Company achieved a total income of Rs. 51791.70 lakhs against Rs. 132026.92 lakhs oflast year. The Company incurred a net loss of Rs. 73198.65 lakhs during the year 2017-18as against a loss of Rs. 34175.16 lakhs in the year 2016-17.

There has been no increase in remuneration of managerial personnel.

3. Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:

Particulars 2017-18 2016-17
Total Revenue (Rs in lakhs) 51791.70 132026.92
Aggregate Remuneration of Key Managerial Personnel (KMP) in F.Y. 2017-18 (Rs. In lakhs) 37.00 42.38
Remuneration of KMPs (as a % of revenue) 0.07 0.03

4. Variations in the market capitalisation of the Company price earnings ratioas at the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the Company incomparison to the rate at which the company came out with the last public offer:

Particulars March 31st 2018 March 31st 2017 % of change
Market capitalisation (Rs in lakhs)* 3311.12 6471.73 (49)
Price Earnings Ratio Nil Nil Nil

* Based on closing Market price on BSE on the respective year and dates.

Particulars March 31st 2018 October 30th 1992 (IPO) % of change
Market Price(BSE) (Rs) 1.10 10 (89)
Market Price (NSE) (Rs) 1.10 10 (89)

5. Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year:

Not applicable since there was no increase in salaries as compared to the previousyear.

6. Comparison of the each remuneration of the KMP against the performance of theCompany:

S. No. Particulars of Remuneration R.K. Birla Managing Director KMP Ch. Narayana Rao Chief Financial Officer Shaik Ibraheem Company Secretary
1 Remuneration in FY 2018 (Rs in Lakhs) Nil 26.27 10.73
2 Revenue in FY 2018 (Rs in Lakhs) 51791.70
3 Remuneration as % of revenue NA 0.05 0.02

7. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee as per the Remuneration Policy of the Company:

There is no variable component availed by any Director

8. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year:

Not applicable.

9. It is hereby affirmed that the remuneration paid is as per the RemunerationPolicy of the Company.