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Surana Solar Ltd.

BSE: 533298 Sector: Engineering
NSE: SURANASOL ISIN Code: INE272L01022
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OPEN 7.84
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VOLUME 2720
52-Week high 16.00
52-Week low 6.70
P/E 32.86
Mkt Cap.(Rs cr) 34
Buy Price 6.70
Buy Qty 1000.00
Sell Price 6.90
Sell Qty 10.00
OPEN 7.84
CLOSE 7.05
VOLUME 2720
52-Week high 16.00
52-Week low 6.70
P/E 32.86
Mkt Cap.(Rs cr) 34
Buy Price 6.70
Buy Qty 1000.00
Sell Price 6.90
Sell Qty 10.00

Surana Solar Ltd. (SURANASOL) - Director Report

Company director report

To the Members of Surana Solar Limited

Your Directors have pleasure in presenting the 12th Annual Report and theAudited Statement of Accounts for the financial year ended 31st March 2018together with the Auditors Report thereon.

FINANCIAL RESULTS:

The performance of the Company during the year is summarized below:

`
Particulars 2017-18 2016-17
Net Sales and other Income 397010313 845026193
Profit before Depreciation Interest and exceptional Items 66114620 84781156
DEDUCT :
Depreciation and Amortization Expenses 31742792 27466432
Interest and Finance charges 21565086 32848145
Profit for the year before exceptional items 12806742 24466579
Profit before Taxation 12806742 24466579
Provision for Taxation :
Current Tax 4504273 5122310
Deferred Tax (124672) 1617115
MAT Entitlement Credit - 1022665
Profit after Tax 8427141 16704489
Add: Other Comprehensive Income - -
Total Comprehensive Income for the year 8427141 16704489
Surplus brought forward from previous year 90551995 73847506
Balance available for appropriation 98979136 90551995
Balance c/f to Balance Sheet 98979136 90551995

Note: The previous years' figures regrouped and rearranged wherever necessary to makethem comparable as per Ind-AS.

OPERATION AND PERFORMANCE:

During the year under review the Income from Operations is ` 391191608 as against `840902576 for the corresponding previous year. The Profit Before Tax is `

12806742 as against ` 24466579 for the previous year. The Profit After Tax is `8427141 as against ` 16704489 for the corresponding period. The Basic Earnings PerShare for the year-ended 31.03.2018 is ` 0.17 as against ` 0.34 for the correspondingprevious year ended 31.03.2017.

As reported in the last year China and other some countries continue to dumpsub-standard and cheap material to India.

In such scenario it is difficult to compete with the imports.

This has resulted in fall in topline and bottom-line. In spite of such adverseconditions the Company has been able to earn profits due to effective cost control andsaving interest cost.

BUSINESS DEvELOPMENT AND PROSPECT:

The Company is participating in various tenders floated by government andnon-government organisations to widen its activities by entering into EPC contracts andsolar rooftop business.

The Company is in the process of setting up of 1 MW solar power plant at Urukondavillage Nagarkurnool District Telangana State under RESCO model and PPA entered withSuryalata Spinning Mills Limited for 25 years at a price of ` 5.00 per unit. It isexpected to be commissioned by the end of August 2018.

During the year under review the Company has received Letter of Intent from KakinadaSmart City Corporation Limited (KSCCL) for site survey investigation design engineersupply installation commission synchronizing and maintenance of grid connected roof topsolar PV systems on net metering basis under RESCO model in Kakinada City Andhra Pradeshfor a maximum capacity of 5 MW at a price of ` 5.25 per unit. The site survey has beencompleted and submitted the report to KSCCL. The Company is looking for potentialconsumers to enter into PPA.

In the year 2016 your Company was awarded an EPC contract for execution and operation& maintenance of 10MW (AC) Solar Power Plant by Paradip Port Trust (PPT). Howeverduring the course of implementation of the said project there has been disputes ontechnical grounds between the Company and PPT as regard to escalation in cost and timelimit for completion of the project. Taking a contrary stand PPT cancelled/terminated LOIand forfeited mobilization advance guarantee and performance guarantee. The Companychallenged the action of PPT before Honorable court of Odisha who in turn was pleased topass an order to pursue the remedy before the adjudicator or file suitable application forsettlement of dispute through arbitration. The company has since initiated arbitrationprocess.

SHARECAPITAL:

The paid-up Share Capital of the Company as on 31st March 2018 is `246033000 divided into 49206600 equity shares of ` 5/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated underListing Regulations is presented in a separate section forms part of the Annual Report asAnnexure-II.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the

Company hereby confirms:

(a) That the preparation of the annual accounts for the financial year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) That the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year 31st March 2018 and of the profitand loss of the company for that period; (c) That the directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (d) That the directors have prepared the annualaccounts for the financial year 31st March 2018 on a going concern basis; and

(e) That the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and (f) That the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

STANDARDS:

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2relating to ‘Meetings of the Board of Directors' and ‘General Meetings'respectively have been duly followed by the Company.

STATEMENT ON DECLARATION GIvEN BY INDEPENDENT DIRECTORS

The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7) of section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section(6) of Section 149.

NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of the Nomination

& Remuneration Committee framed a policy which lays down a framework in relation toselection appointment and remuneration to Directors Key Managerial Personnel and SeniorManagement of the Company. The details of Nomination and Remuneration Committee and Policyare stated in the Corporate Governance Report.

PARTICULARS OF LOANS GUARANTEES OR SECURITIES OR INvESTMENTS

The details of Loans Guarantees Securities and Investments made during the financialyear ended 31st March 2018 are given in the notes to the Financial Statementsin compliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. All Related Party Transactions are placed before theAudit Committee as also the Board for approval where ever required. Prior omnibusapproval of the Audit Committee is obtained for the transactions which are of aforeseeable 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 and the Board of Directors on a quarterly basis. The Company hasdeveloped a Policy on Related Party Transactions for the purpose of identification andmonitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. The particulars of contracts or arrangements with related partiesreferred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause(h) of the Companies (Accounts) Rules 2014 and the same is annexed herewith as"Annexure-IV" to this Report.

DIvIDEND

The Board of Directors have not recommended the dividend for the financial year2017-18 due to low profitability and capex plans the company has for the year 2018-19.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9are enclosed as Annexure - V to this Report.

PARTICULARS IN RESPECT OF CONSERvATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in theAnnexure-I forming part of this Report.

RISK MANAGEMENT POLICY

In terms of the requirement Section 134(3)(n) and Regulation 21 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 read with relevant provisions of the Companies Act 2013 the Company has developed andimplemented the Risk Management Policy. The Audit Committee has additional oversight inthe area of financialrisks and controls. Major risks

14 identified by the businesses and functions are systematically addressed throughmitigating actions on a continuing basis. The development and implementation of riskmanagement policy has been covered in the management discussion and analysis which formspart of this report. At present the

Company has not identified any element of risk which may threaten the existence of theCompany.

CORPORATE SOCIAL RESPONSIBILITY

Surana Group recognizes the importance of contributing to the society in a meaningfulway. An urge to serve the society and to bring change in the living of the people SuranaGroup had taken an initiative in this direction and the journey was embarked in the year1987 by Shri G. Mangilal Surana in the memory of his father Shri Gulab Chand Surana bystarting a hospital "G.M. Surana Charitable Hospital".

The G.M. Surana Charitable Hospital is engaged in community and social initiatives andplays an active role in serving rural community.

Vision Mission and Core Values:-

Vision: To serve each patient with compassion and love as we would do to our lovedones.

Mission: To develop maintain and continuously improve our quality resources to thesociety by providing better care for better future.

Core value:

Compassion

Commitment to Quality

Working Together

Respect for the Individual

G.M. Surana Charitable Hospital believes in ‘Commitment to Care' and theinitiative of this stands as the testimony. The main objective of this foundation is toprovide health care services to the people below and on poverty line.

It was founded as a clinic in 1987 and in the year 2011 it was converted to hospital.The hospital now covers 6000 sq ft area. It is being managed by 5 doctors and 10assistants and with a provision of 10 beds. It has even added Physiotherapy centre in2011. In the first year of the journey 25079 patients were treated and the number hasincreased consistently and till the year 2018 the total number of patients treated in thehospital are 1052673.

Former Years of G.M. Surana Charitable Clinic:-

The idea to start this foundation was to reach out to the rural community as they hadno access to the proper medical facilities and to be a helping hand to them and thispassion was turned into action by taking the first step in the year 1987 by establishingG.M. Surana Charitable Clinic. The clinic was built on 1200 sq ft area. It had 2 permanentdoctors who were provided residence in the clinic so there could be 24/7 service for thepeople and 5 staff members to take care of the daily activities. There were only 3 to 4beds available with 80 to 90 patients treated daily who came from 25 Kms of the radius tovisit the clinic and avail the services. There were weekly camps held such as eye caredental care and various vaccinations for children and even skin diseases were taken careof.

Current activities in G.M. Surana Charitable Hospital:-

With over 30 years of services for the people G.M. Surana Charitable Clinic hasimmensely grown. In 2011 G.M. Surana Charitable Clinic was changed to G.M. SuranaCharitable Hospital. Presently the hospital has grown to 6000 sq ft area with 5 doctorsand 10 staff members. The small steps have taken a large leap in the foundation and thepassion to serve people has emerged and is increasing. The general clinic has even added aphysiotherapy centre and weekly camps now even include thyroid checkup heart care tipsblood grouping glucose provision and much more. The only thing that remains constant inall these years is the trust of the people towards the foundation and till date 10 lakhsplus patients are treated here.

Future Years:-

G.M. Surana Charitable Hospital still yearns to grow more and by providing everypossible services under one roof to its people with the best quality. Future plans of thehospital includes – opening an eye care centre and a thyroid centre by providingdaily services rather than weekly camps. It even desires to include specialised doctors invarious fields so the rural community has an access to it in the right means.

Management:-

G.M. Surana Charitable Hospital is located at Bollarum village Secunderabad. Thecharitable clinic is founded by Sri G.M. Surana Chairman – Sri Narender Surana ViceChairman – Sri Devendra Surana Secretary - Sri Anand Swarup Bora and 6 executivecommittee members.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Board of Directors of the Company have constituted Corporate Social ResponsibilityCommittee and adopted policy for Corporate Social Responsibility. The Composition of theCommittee is as follows:

Sl.No. Name Designation
1 Shri Narender Surana Chairman
2 Shri Devendra Surana Member
3 Dr R.N.Sreenath Member

The CSR Committee is empowered to perform the functions of the Board relating to thesocial initiatives of the Company. Its primary functions are to: Formulate review andrecommend to the Board a CSR policy indicating the activities to be undertaken by theCompany as specified in

Schedule VII of the Companies Act 2013. Recommend the amount of expenditure to beincurred on the initiatives as per the CSR policy. Provide guidance on various CSRinitiatives undertaken by the Company and monitoring their progress. Monitorimplementation and adherence to the CSR Policy of the Company from time to time. CorporateSocial Responsibility policy was adopted by the Board of Directors on the recommendationof Corporate Social Responsibility Committee. Report on Corporate Social Responsibility asPer Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is preparedand the same is enclosed as Annexure - III to this Report.

BOARD EvALUATION

During the year under review pursuant to the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the evaluation ofperformance of all Directors is undertaken annually. The company has implemented a systemof evaluating performance of the Board of Directors and of its Committees and individualDirectors on the basis of a structured questionnaire which comprise evaluation criteriataking into consideration various performance related aspects. The Board of Directors hasexpressed their satisfaction with the valuation process.

DIRECTORS:

Shri Narender Surana Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. ShriG.Mangilal Surana Non-Executive Director Shri O.Swaminatha Reddy Shri R.Surender Reddyand Dr.R.N.Sreenath Non-Executive Independent Directors of the Company who attained theage above 75 years are being appointed as Non-Executive Director/Non-Executive IndependentDirector through Special Resolution by shareholders at this Annual General Meetingpursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment)Regulations 2018.

Shri Manish Surana was re-appointed as Director-(Finance & Technical) of theCompany for a further period of 3 years w.e.f. 28.01.2018 subject to approval of themembers at this Annual General Meeting.

The brief particulars of the Directors seeking appointment / re-appointment at thisAnnual General Meeting are being annexed to the Corporate Governance Report.

Pursuant to the provisions of Section 203 of the Act the appointment of Shri NarenderSurana and Shri Devendra Surana Directors and Shri Manish Surana Director Finance &Technical/Whole-time Director were formalized as the Key Managerial Personnel of theCompany.

MEETINGS

During the financial year under review 5 (five) Board Meetings were convened and held.The details of which are given in the Corporate Governance Report. The intervening gapbetween the meetings was within the period of 120 days as prescribed under the CompaniesAct 2013 and Regulation 17 of SEBI Listing Regulations 2015.

DEPOSITS

The Company has not accepted any deposits from public in terms of Section 73 of theCompanies Act 2013 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.

STATUTORY AUDITORS

M/s. Luharuka & Associates Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 26th September2017 for a term of five consecutive years. As per the provisions of

Section 139 of the Companies Act 2013 the appointment of

Auditors is required to be ratified by Members at every Annual

General Meeting.

In accordance with the Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting. M/s. Luharuka & AssociatesChartered Accountants have confirmed that they are not disqualified from continuing asAuditors of the

Company.

AUDITORS'REPORT

There are no qualifications reservations or adverse remarks made by M/s. Luharuka& Associates Chartered Accountants Statutory Auditors in their report for theFinancial Year ended 31st March 2018.

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s Sekhar & Co. CharteredAccountants as Internal Auditors to conduct Internal Audit for the Financial Year ended 31stMarch 2019.

COST AUDITORS

The Board of Directors subject to the approval of the Central Government re-appointedM/s BVR & Associates Cost

Accountants holding certificate of practice No.16851 as a Cost Auditor for conductingthe Cost Audit for the financial year 2018-19. Subject to section 148 of the CompaniesAct 2013 read with Companies (Cost Records and Audit) Rules 2014 issued by the MCA theAudit Committee recommended their re-appointment. The Company has also received a letterfrom the Cost Auditor stating that the appointment if made will be within the limitsprescribed pursuant to the section 141 of Companies Act 2013.

CORPORATE GOvERNANCE:

The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance as per the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. A separate report on corporate governancepractices followed by the Company together with a Certificate from the Company's Auditorsconfirming compliances forms an integral part of this Report.

vIGIL MECHANISM

The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and provides direct access to the Chairperson of the Audit Committee inexceptional cases. It is affirmed that no personnel of the Company has been denied accessto the Audit Committee. The policy of vigil mechanism is available on the Company'swebsite. The Whistle Blower Policy aims for conducting the affairs in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Ms. Rakhi Agarwal Company Secretary in Practice as Secretarial Auditors toconduct

Secretarial audit of the company for the financial year ended

March 31 2018.

The Secretarial Audit Report issued by Mrs. Rakhi Agarwal Company Secretary inPractice in Form MR-3 is enclosed as Annexure - VI to this Annual Report.

The Secretarial Audit Report does not contain any qualifications reservation oradverse remarks.

PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

PARTICULARS OF REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as follows: (i) The ratio ofthe remuneration of each director to the median remuneration of the employees of thecompany for the financial year;

Name of the Director Ratio to Median
Remuneration
Shri Manish Surana WTD 31.61

(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

Name of Person % increase in remuneration
Shri Manish Surana WTD 0.00

(iii) The percentage increase in the median remuneration of employees in the financialyear 10.66%

(iv) The number of permanent employees on the rolls of company - 37 (v) Averagepercentile increase already made in the salaries of employees other than the managerialpersonnel in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration; The averageincrease in salaries of employees other than managerial personnel in 2017-18 was 7.95%.Percentage increase in the managerial remuneration for the year was Nil.

(vi) Affirmation thatthe remuneration is as per the remuneration policy of the company- Yes.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the

Company its compliance with operating systems accounting procedures and policies atall locations of the Company and its subsidiaries. Based on the report of internal auditfunction process owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.

Quarterly basis at the time of review of Quarterly Financial Results of the Company.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the

Regulators or Courts or Tribunals which would impact the going concern status of theCompany and its future operations.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year 31st March 2018to which the financial statements relates and the date of signing of this report.

HUMAN RESOURCES:

The industrial relations of the Company continued to be harmonious during the yearunder review.

ISO 9001-2008 CERTIFICATION

Your Company continues to hold ISO 9001-2008 Certification by meeting all therequirements of Certification from time to time.

POLICY ON SEXUAL HARRASSEMENT

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Internal Complaints Committee(ICC) has been setup to redress Complaints receivedregarding sexual Harassment. During the period under the review no complaints werereceived by ICC.

APPRECIATION

Your Directors wish to place on record their appreciation to employees at all levelsfor their hard work dedication and commitment. The enthusiasm and unstinting efforts ofthe employees have enabled the Company to remain at the forefront of the industry despiteincreased competition from several existing and new players.

CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Directors take this opportunity to place on record their sincere thanks to thesuppliers customers strategic partners Banks and Financial Institutions InsuranceCompanies Central and State Government Departments and the shareholders for their supportand co-operation extended to the Company from time to time. Directors are pleased torecord their appreciation of the sincere and dedicated services of the employees andworkmen at all levels.

For and on behalf of the Board of Directors

NARENDER SURANA DEvENDRA SURANA
DIRECTOR DIRECTOR
DIN-00075086 DIN-00077296

Place: Secunderabad

Date: 06.08.2018