Sujana Universal Industries Ltd.
|BSE: 517224||Sector: Consumer|
|NSE: SUJANAUNI||ISIN Code: INE216G01011|
|BSE 00:00 | 02 Feb||Sujana Universal Industries Ltd|
|NSE 05:30 | 01 Jan||Sujana Universal Industries Ltd|
|BSE: 517224||Sector: Consumer|
|NSE: SUJANAUNI||ISIN Code: INE216G01011|
|BSE 00:00 | 02 Feb||Sujana Universal Industries Ltd|
|NSE 05:30 | 01 Jan||Sujana Universal Industries Ltd|
The Members of Sujana Universal Industries Limited
(A Company under Corporate Insolvency Resolution Process by NCLT orderNo. CP(IB)No. 186/09/HDB/2019).
Your Directors have pleasure in presenting the Thirty First Annual(31st) Report of your Company together with the Audited Financial Statements of Accountsfor the Financial Year ended 31st March 2020.
Your Directors hereby report that the Company has achieved a turnoverof Rs. 3.80 lakhs upto 31.03.2020 as against the turnover of Rs. 276.60 lakhs during theprevious financial year ended 31.03.2019.
The highlights of the Financial Results are as follows :
Rs. in Lakhs
Operations & Overall Performance:
During the year under review your Company reported total income ofRs.3.80 Lakhs as against Rs.276.60 lakhs of previous year. Your company incurred lossbefore tax of Rs.8856.44 lakhs as against loss of Rs.73008.03 lakhs in the previous year.After making a provision of Rs.866.01 Lakhs towards interest and Rs.1101.10 Lakhs towardsdepreciation the current financial year closed with a net loss of Rs.8856.44 Lakhs asagainst net loss of Rs.73008.03 Lakhs last year.
The net worth of the Company as on 31st March 2020 is Rs. -69076.50lakhs against Rs. -60178.57 lakhs in 2018-19. Net worth is decreased by Rs. 8897.93 lakhs.
In view of the losses your Company does not recommend any 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.
Your Company has not accepted Deposits from Public or Members underChapter V of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 for the 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.2.28 to the financial statements which sets out related party disclosures.
Prior omnibus approval is obtained on an annual basis for thetransactions with related parties which are of a foreseeable
and repetitive nature. The transactions entered into pursuant to theomnibus approval so granted and a statement giving details of all transactions withrelated parties are placed before the Audit Committee and Board of Directors for theirreview 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- I and forms part of thisreport.
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
M/s. J.Singh & Associates Chartered Accountants (FRN No. 110266W)are the Statutory Auditors of the Company and they hold the office till the conclusion ofthe 33rd Annual General Meeting of the Company in the year 2022.
Notes to the accounts as referred in the Auditor's Report areself-explanatory and does not contain any qualification and therefore do not call for anyfurther comments or explanations.
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 / Explanations on theCompany's Standalone / Consolidated Financial Statements
a) The Company has defaulted in repayment of dues to Banks/FinancialInstitutions and all loans outstanding were classified as NPA's by the banks. Provisionfor interest (excluding penal interest) amounting to Rs. 61.95 Cr. and Rs.236.81 Cr forthe quarter ended 31st March 2020 and Year ended on such date respectively on its WorkingCapital Loan and Term Loan has not been made in the books by the Company as those LoanAccounts were classified as NPA by the Lending Banks and Financial Institutions. The lossof the Company has been understated by Rs.61.95 Cr for the quarter ended 31st March 2020and Rs. 236.81 Cr for the year ended on such date in view of non-provision of Interestamount.
As on 31.3.2020 the outstanding secured loans stand at Rs. 1170.79cr. and the Company is pursuing with the lenders a viable restructuring package. Asalmost all the Banks/Financial Institutions the lenders have classified our loan accountsas NPA's and in view of the Company's efforts with the lenders for settlement of dues inthe form of OTS/Resolution of debts by takeover by strategic investors the Company hasnot provided in the books of account unpaid interest amounting to Rs.236.81 cr. for thecurrent financial year 2019-20.
b. In absence of technical and costing evaluation of current andnoncurrent assets impact of impairments if any on their economic value we can'tcomment on the realizable value of same.
The amounts in current assets and non current assets advance paid forservices etc. and in the opinion of the management they are good and recoverable in cashor in kind. Hence provision has not been made.
c. The Trade receivables could not be verified as the confirmation ofbalances have not been received. The Company has made a provision for bad and doubtfuldebts for trade receivables amounting to Rs.502.31 Cr during the Year ended 31st March2020. The realizability of remaining trade receivables amounting to Rs.506.88 Cr is indoubt and the company has not made any provision for Bad and Doubtful Debts in respect ofthis trade receivables.
The Company has sent letters to the debtors requesting for confirmationof balance as on 31.03.2020. The Company is following up with the Debtors for theconfirmations. The company has made provision for bad and doubtful debts to the extent ofRs.502.31 crore and is confident of realizing the balance amount of Rs.506.88 crore. Henceprovision has not been made for the amount.
d. Loans and advances of Rs. 44.11 Cr has been given to varioussub-contractors suppliers and other parties are old advances. Having regard to the age ofthis advances in our opinion this are doubtful of recovery. The company is yet to assessthe change in risk of default and resultant expected credit allowance on such Loan andadvances. Had the aforesaid Loans and advances has been provided for impairment loss ofthe company for the quarter ended 31st March 2020 and year ended on such date would havebeen higher by Rs. 44.11 Cr.
The amount of Rs.44.11 Cr. has been paid as advance for supply ofgoods/ services and in the opinion of the management they are good and recoverable incash or in kind. Hence provision has not been made.
e. The Company's Net worth has been eroded on account of lossesincurred by the company during the year ended 31st March 2020 and previous financial yearand the net worth of the company is negative. The Current Liabilities of the companyexceeded the current assets of the company as at 31st March 2020 by Rs.831.07 Cr. It wouldcast doubt on the Company's ability to continue as a going concern basis.
The company has been making efforts for settlement of the dues ofbanks/ Financial Institutions in the form of OTS/ Resolution of debts through takeover bystrategic investors. The company expects its net worth to become positive in the processand hence can continue as a going concern.
Note No. e in Independent consolidated audit report
f. Except Sun Trading Net worth of the companies in the Group has beeneroded on account of losses incurred during current financial year ended 31st March 2020and previous financial year and the net worth of the company is negative. It would castdoubt on the Company's ability to continue as a going concern basis
Due to adverse conditions in the international market for steel andallied products and other problems the subsidiaries incurred losses and their Net Worthhas been eroded. It may be observed from the net worth of all the subsidiaries exceptingSun Trading Ltd has been eroded fully. Since the company management was of the opinionthat the impairment of valuation of the subsidiaries excepting Sun Trading Ltd waspermanent a provision for impairment to the extent of Rs.174.97 crore (book value ofinvestment in subsidiaries excepting Sun Trading Ltd) was made in books.
(b) Cost Auditors:
M/s. B V R Associates & Co Cost Accountants have been appointedas the Cost Auditor of the Company for financial year 2019-20 pursuant to provisions ofSection 148 and other applicable provisions of the Companies Act 2013. As required bySection 148 of the Companies Act 2013 necessary resolution has been included in thenotice convening the Annual General Meeting seeking ratification by the members to theremuneration proposed to be paid to the cost auditors for the financial year ending 31stMarch 2020.
The Company is in process of filing the Cost Audit Report for thefinancial year 2019-20 with the Central Government.
(c) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013and rules framed there under the Board of Directors has appointed Anand Kumar C KasatPracticing Company Secretaries Mem. No. 42078 CP. No. 17420 to undertake the secretarialaudit of the Company. The secretarial audit report issued by Anand Kumar C KasatPracticing Company Secretary for the financial year ending 31st March 2020 is given inthe Annexure-III-A attached hereto and forms part of this Report. There are noqualifications reservations or adverse remarks made by the secretarial auditor and theobservation made is self explanatory and requires no further explanation from the Board.
(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 - III-B".
(e) . The Company could not appoint Company Secretary under Section203 of Companies Act 2013 reading Rule 8A of Companies (Appointment and Remuneration ofKey Managerial Personnel) Rules 2014 in spite of its efforts and the Company is takingfurther steps to comply with the provisions for appointment of Company Secretary.
Since the appointment of Company Secretary could not be made theCompany could not file Form INC 22A and consequently the Company has been classified asNon Compliant Company by the Ministry of Corporate Affairs.
The paid up equity share capital as on 31st March 2020 was Rs.16884.11Lakhs. 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 theAnnexure -V attached hereto and forms part of this Report.
During the year under review 4 (Four) board meetings were held on May29th 2019 August 14th 2019 November 14th 2019 and February 14th 2020 The maximumtime gap between any two consecutive meetings was within the period prescribed under theCompanies Act 2013 and and SEBI (Listing Obligations and Disclosure 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.HanumanthaRao(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 following persons are Key Managerial Personnel of the Company:
Shri G Srinivasa Raju : Managing Director Shri S Hanumantha rao : Wholetime Director Shri S Rengaraj : Chief Financial Officer
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 are attached and 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 of thisReport.
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.
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 Practicing CompanySecretary 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.
Details of the subsidiaries are given below :
Your Company has the following Wholly Owned Subsidiaries:
PAC Ventures Pte Ltd Singapore was set up in the year 2007 with aview to expand the Company's business of general wholesale trade(including general importsand exports) in the overseas markets and the Company has achieved revenue of Rs. 132.86 crduring the year
Sujana Holdings Ltd Dubai was set up in the year 2006 for carryingon
the business of investments and trading and its revenue during the yearis nil Further Sujana Holdings has expanded its operations in Sharjah UAE by forming asubsidiary namely Empire Gulf FZE Sharjah UAE.
Nuance Holdings Ltd Hong Kong was set up in the year 2006 forcarrying on the business of investments and trading and its revenue during the year wasRs. Nil.
Nuance Holdings Ltd has expanded its operations by forming a subsidiarynamely Selene Holdings Ltd Mauritius.
Sun Trading Ltd Cayman Islands was set up in the year 2008 forcarrying on the business of general wholesale trade which includes general imports andexports and its consolidated revenue was Rs.
Nil. Sun Trading Ltd has a subsidiary namely Sun global Trading Pte.Ltd Singapore.
Hestia Holdings Ltd Mauritius has became subsidiary of the Companyw.e.f. 27th December 2010 with the object of carrying on the business of general tradewhich includes general imports and exports.
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 on the compliancesof various business processes. The internal audit report alongwith audit findings andtracking of process improvements & compliances is 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 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 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 ofRisk Management along with an overview of the Risk Management process procedures andrelated roles 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.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 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 Board of Directors take this opportunity to express their deepsense of gratitude to 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 theemployees of the Company for their outstanding contribution to the successful operationsof the Company.
The Board specially thank to the shareholders for their continuedconfidence and faith in the Company.