To the members of Surana Solar Limited
Your Directors have pleasure in presenting the 13th Annual Report and the AuditedStatement of Accounts for the financial year ended 31st March 2019 together with theAuditors Report thereon.
The performance of the Company during the year is summarized below:
| || ||(Amount in Rs) |
|Particulars ||2018-19 ||2017-18 |
|Net Sales and other Income ||360047493 ||397010315 |
|Profit before Depreciation Interest and exceptional Items ||60850913 ||66114620 |
|DEDUCT : || || |
|Depreciation and Amortization Expenses ||28387679 ||31742792 |
|Interest and Finance charges ||19410423 ||21565086 |
|Profit for the year before exceptional items ||13052811 ||12806742 |
|Profit before Taxation ||13052811 ||12806742 |
|Provision for Taxation : || || |
|Current Tax ||3228000 ||4504273 |
|Deferred Tax ||(211900) ||(124672) |
|MAT Entitlement Credit ||- ||- |
|Profit after Tax ||10036711 ||8427141 |
|Add: Other Comprehensive Income ||- ||- |
|Total Comprehensive Income for the year ||10036711 ||8427141 |
|Surplus brought forward from previous year ||98979136 ||90551995 |
|Balance available for appropriation ||109015847 ||98979136 |
|Balance c/f to Balance Sheet ||109015847 ||98979136 |
OPERATION AND PERFORMANCE:
During the year under review the Income from Operations is Rs.347382925 as againstRs.391191608 for the corresponding previous year. The Profit Before Tax is Rs
13052811 as against Rs.12806742 for the previous year. The Profit After Tax isRs. 10036711 as against Rs 8427141 for the corresponding period. The Basic EarningsPer Share for the year-ended 31.03.2019 is Rs. 0.20 as against Rs. 0.17 for thecorresponding previous year ended 31.03.2018.
As reported in the last year China and some other countries continues to dumpsub-standard and cheap material to India.
In such scenario it is difficult to compete with the imports. In spite of such adverseconditions the Company is able to earn profits due to effective cost control and savingsinterest 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.
During the year the Company has commissioned 1 MW solar power plant at Urukondavillage Nagarkurnool District Telangana State under RESCO model and entered into PPAwith Suryalata Spinning Mills Limited for 25 years at a price of Rs.5.00 per unit.
The Letter of Intent given by Kakinada Smart City Corporation Limited (KSCCL) has sincebeen cancelled as necessary location to set up roof top solar could not be allotted bythem. In the year 2016 your Company was awarded an EPC contract for execution andoperation & maintenance of 10MW (AC) Solar Power Plant by Paradip Port Trust (PPT).However in 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 Hon'ble 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 arbitrationproceedings.
The Company does not have any Subsidiary or Associate Company.
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.
The paid-up Share Capital of the Company as on 31st March 2019 is Rs.246033000divided into 49206600 equity shares of Rs.5/- each. During the year there was nochange in the Paid-up Capital of the Company.
TRANSFER TO RESERVES:
The Board of Directors of the Company have not recommended for transfer of any amountto the General Reserve for the financial year ended 31 st March 2019.
The Board of Directors have not recommended the dividend for the financial year2018-19 due to low profitability and capex plans the company has for the year 2019-20.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under schedule V of the SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 forms an integral partof this Report and gives details of the overall industry structure developmentsperformance and state of affairs of the Company's business internal controls and theiradequacy risk management systems and other material developments during the financialyear
Management Discussion and Analysis Report is presented in a separate section forms partof the Annual Report as Annexure-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 2019 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 2019 and of the profit and lossof the company for that period; (c) That the directors have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) That the directors have prepared the annual accountsfor the financial year 31st March 2019 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.
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 and Regulation 25(8)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 stating thatthey meet 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 Committeeframed a policy which lays down a framework in relation to selection appointment andremuneration to Directors Key Managerial Personnel and Senior Management and otheremployees of the Company. The details of Nomination and Remuneration Committee and Policyare stated in the Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The details of Loans Guarantees and Investments made during the financial year ended31st March 2019 are given in the notes to the Financial Statements in compliance with theprovisions of Section 186 of the Companies Act 2013 read. with Companies (Meetings ofBoard 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 and monitoring of such transactions. Thepolicy on Related Party Transactions as approved by the Board is uploaded on the Company'swebsite http://suranasolar.com/corporate_gov.php.
The particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of theCompanies (Accounts) Rules 2014 and the same is annexed herewith as"Annexure-IV" to this Report.
The Audit Committee consists of Independent Directors with Shri O.Swaminatha Reddy asChairman Shri R.Surender Reddy DR R N Sreenath and Director Shri Narender Surana asmembers. The Committee inter alia reviews the Internal Control System Reports of InternalAuditors and Compliance of various regulations. The Committee also reviews the financialstatements before they are placed before the Board.
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 and has been uploaded on company's website athttp://suranasolar.com/ corporate_gov.php.
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) of the Companies Act 2013 and Regulation21 of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has developed and implemented the RiskManagement Policy. The Audit Committee has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the management discussionand analysis which forms part of this report. At present the
Company has not identified any element of risk which may threaten the existence of theCompany.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
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.
Commitment to Quality
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 firstyear of the journey 25079 patients were treated and the number hasincreased consistently and till the year 2019 the total number of patients treated in thehospital are 1086825.
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.
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.
G.M. Surana Charitable Hospital is located at Bollarum village Secunderabad. Thecharitable clinic is founded by Shri G.M. Surana Chairman Shri Narender SuranaVice Chairman Shri Devendra Surana Secretary - Shri Anand Swarup Bora and 6executive committee 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 (Non-Executive Director) |
|2 Shri Devendra Surana ||Member (Non-Executive Director) |
|3 Dr R.N.Sreenath ||Member (Independent Director) |
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.
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 haveexpressed their satisfaction with the valuation process.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Shri G Mangilal Surana Director of the Company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. Further theterm of appointment of Shri O.Swaminatha Reddy Shri R.Surender Reddy and Dr R.N. Sreenathwill expire on 21.09.2019. The Board of Directors of the Company at their meeting held on7th August 2019 on recommendation of the Nomination & Remuneration Committee and onthe basis of the report of performance evaluation of independent directors recommended forthe approval of the members the reappointment of Shri O.Swaminatha Reddy Shri R.SurenderReddy and Dr R.N. Sreenath as Independent Directors of the Company for a second term ofFive years from 21st September 2019 to 20th September 2024.
Further the term of appointment of Smt. Madhumathi Suresh as an Independent Director ofthe Company will expire on 22nd March 2020. The Board of Directors of the Company attheir meeting held on 7th August 2019 on the recommendation of the Nomination &remuneration Committee and on the basis of the report of performance Evaluation ofIndependent directors recommended for the approval of the Members the re-appointment ofSmt. Madhumathi Suresh as Independent Director for a further period of Five years from22nd March 2020 to 21st March 2025.
Shri Nirmal Kumar Jain Independent Director of the Company is willing to retire fromthe Board due to his Pre-ocuupation and whose term of appointment is upto this AnnualGeneral Meeting. Shri Nirmal Kumar Jain in his long association with the Company hasmade valuable contribution to the company and guided the Board in right manner.
The brief particulars of the Directors seeking appointment / re-appointment at thisAnnual General Meeting are being annexed to the Notice.
Pursuant to the provisions of Section 203 of the Act Shri Narender Surana ShriDevendra Surana Directors and Shri Manish Surana Whole-time Director and Chief Financial
Officer and Mrs. Swapna Gade Company Secretary were formalized as the Key ManagerialPersonnel of the Company.
MEETINGS OF THE BOARD:
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.
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.
LISTING OF EQUITY SHARES:
The Company's equity shares are listed on the following Stock Exchanges: (i) BSELimited Phiroze JeeJeebhoy Towers Dalal Street Mumbai 400 001 MaharashtraIndia; and
(ii) National Stock Exchange of India Limited Exchange Plaza Floor 5 Plot No.C/1 G Block Bandra Kurla Complex Bandra (East) Mumbai 400 051Maharashtra India. The Company has paid the Annual Listing Fees to the said StockExchanges for the Financial Year 2019-20.
M/s. Luharuka & Associates Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 26th September 2017 for aterm of five consecutive years subject to ratification by
Members at every Annual General Meeting.
However 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.
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 2019.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
The Board of Directors of the Company have re-appointed M/s Sekhar & Co. CharteredAccountants as Internal Auditors to conduct Internal Audit for the financial year ended31st March 2020.
M/s Lavanya & Associates Cost Accountants Hyderabad has been appointed by theBoard on recommendations of Audit Committee as Cost Auditor for conducting audit of thecost accounts maintained by the Company relating to Electricity for the financial year2019-20.
The Company has made and maintained the cost records as specified under Section 148(1)of the Companies Act 2013.
The Board of Directors of the Company appointed Mrs. Rakhi Agarwal Company Secretaryin Practice Hyderabad to conduct Secretarial Audit for the financial year 2019-20.
The Secretarial Audit Report of Mrs. Rakhi Agarwal Company Secretary in Practice forthe financial year 2018-19 is annexed herewith as Annexure-VI.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark. During the year under review the Company has complied with the applicableprovisions of the Secretarial Standards.
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.
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.
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 and
Remuneration of Managerial Personnel) Rules 2014 is provided as follows: (i) The ratioof the 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 ||25.36 |
(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 |
|Mrs. Swapna Gade CS* ||N.A. |
* Appointed as CS on 06.08.2018.
(iii) The percentage increase in the median remuneration of employees in the financialyear 8.95%
(iv) The number of permanent employees on the rolls of company - 22 (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 2018-19 was 10.37%.Percentage increase in the managerial remuneration for the year was Nil.
(vi) Affirmation that the 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 Auditors team carries out extensive audit and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.
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 orTribunals which would impact the going concern status of the Company and its futureoperations.
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 2019 to which thefinancial statements relates and the date of signing of this report.
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 complaint receivedregarding sexual harassment. During the period under review no complaints was received bythe ICC.
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 supply conditions affectingselling prices of finished goods input availability and prices changes in governmentregulations tax laws economic developments within the country and other factors such aslitigation and industrial relations.
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: 07.08.2019 || |