| Dear Members,
The Directors have pleasure in presenting their Report and the Audited
Financial Statements of your Company for the year ended 31st March
2015.
Company's Performance:
Your Company has achieved a turnover of Rs. 326,016.19 lakhs for the
year ended 31st March, 2015, as against the turnover of Rs. 342,173.02
lakhs for the previous year ended 31st March, 2014, the highlights of
the financial results are as follows:
Rs. in Lakhs
Particulars 2014-2015 2013-2014
Profit Before Depreciation & Interest 11,313.55 15,535.49
Financial Costs 10,963.89 14,735.14
Depreciation 2,130.80 1,741.59
Profit Before Tax (1,781.14) (941.24)
Provision for Tax
* Current Tax -
* Deferred Tax (586.76) (310.91)
Profit After Tax (1,194.38) (630.33)
Balance of profit brought forward 23,032.47 23,691.11
from earlier years
Add: Excess Provision for IT written off 844.56 -
Profit available for appropriation 22,682.65 23,060.78
Appropriations:
Proposed Dividend:
* Equity - -
* Preference 20.30 24.36
* Dividend Tax 3.29 3.95
Balance of Profit 22,659.06 23,032.47
Operations:
In order to compete in the changing market conditions, SUIL started
adapting different strategic initiatives in its existing businesses. A
focussed approach and unique strategy was adopted for each business
division with the objective of achieving higher growth and
profitability. Various strategic initiatives are also in pipeline to
lead the divisions towards profitability and stability.
Appliances Division
The Appliances divisions mainly includes the products like varieties of
Fans, Fan Components and other appliances, which has recorded a
turnover of Rs. 3.62 lakhs during the year ended 31st March, 2015.
Steel Products Division
The Steel Products division mainly handles activities of Casting,
Processing and Trading of Steel and aided products and during the year
ended 31st March, 2015 it has recorded a turnover of Rs. 325,844.36
lakhs including the export turnover of various products were Rs.
3,259.67 lakhs.
LEC Division
The LEC division is mainly includes bearing and bearing components. The
turnover of the division for the year of Rs. 167.71 lakhs
Infrastructure Division
With a view to expand the Company's operations in the construction and
developmental activities like integrated residential townships,
commercial buildings and specialized design and construction of
integrated medical colleges and super specialty hospitals etc, the
Company started Infrastructure Division, however due to the current
economic slowdown, no works were taken up by this Division in this
year.
Subsidiary Companies:
Your Company has the following Wholly Owned Subsidiaries:
PAC Ventures Pte Ltd
Pac Ventures Pte. Ltd, Singapore was set up in the year 2007 with a
view to expand the Company's business of general wholesale trade
(including general imports and exports) in the overseas markets and the
Company has achieved revenue of Rs. 78,852.20 lakhs during the year.
Sujana Holdings Ltd
Sujana Holdings Ltd, Dubai was set up in the year 2006 for carrying on
the business of investments and trading and its revenue during the year
is nil. Further, Sujana Holdings has expanded its operations in Sharjah
UAE by forming a subsidiary namely Empire Gulf FZE, Sharjah, UAE.
Nuance Holdings Ltd
Nuance Holdings Ltd, Hong Kong was set in the year 2006 for carrying on
the business of investments and trading and its revenue during the year
was Rs. 15,036.57lakhs.
Nuance Holdings Ltd has expanded its operations by forming a subsidiary
namely Selene Holdings Ltd, Mauritius.
Sun Trading Ltd
Sun Trading Ltd, Cayman Islands was set up in the year 2008 for
carrying on the business of general wholesale trade which includes
general imports and exports and its consolidated revenue was Rs.
108,142.73 lakhs.
Sun Trading Ltd has a subsidiary namely Sun global Trading Pte. Ltd,
Singapore
Hestia Holdings Ltd
Hestia Holdings Ltd, Mauritius has became subsidiary of the Company
w.e.f. 27th December 2010, with the object of carrying on the business
of general trade which includes general imports and exports.
Share Capital:
The paid up Equity Share Capital as on 31st March, 2015 was 16,884.11
lakhs. During the year under review, the Company has not issued shares
with differential voting rights nor granted stock options nor sweat
equity. As on 31st March, 2015, none of the Directors of the Company
hold shares or convertible instruments of the Company..
Particulars of Loans, Guarantees or Investments:
Particulars of Loans, Guarantees and Investments as required under the
provisions of Section 186 of the Companies Act, 2013 are provided in
the notes to the Financial Statements.
Deposits:
The Company has not accepted any deposits covered under chapter V of
the Companies Act, 2013 and as such, no amount of principal or interest
was outstanding as on 31st March, 2015.
Consolidated Financial Statements:
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statement of the Company and all
its subsidiaries is attached. The consolidated financial statement has
been prepared in accordance with the relevant accounting standards as
prescribed under Section 133 of the Companies Act, 2013. The
consolidated financial statement discloses the assets, liabilities,
income, expenses and other details of the Company and its subsidiaries.
As per the provisions of Companies Act, 2013 annual accounts of the
subsidiary companies and the related detailed information will be made
available to the holding and subsidiary companies' investors seeking
such information at any point of time. The annual accounts of the
subsidiary companies will also be kept for inspection by any investor
at its Head Office in Hyderabad and that of the subsidiary companies
concerned. A gist of the financial performance of the subsidiaries in
the prescribed Form AOC-1 is enclosed to this Annual Report.
Industrial Relations:
Your directors are happy to report that during the year there were very
cordial and extremely good industrial relations at all levels.
Meetings:
During the year under review, Five (05) Board Meetings were held on
30th May, 2014, 12th August, 2014, 28th August, 2014, 13th November,
2014 and 14th February, 2015. The maximum time-gap between any two
consecutive meetings was within the period prescribed under the
Companies Act, 2013.
Directors:
During the year under review, the members at the AGM held on 30th
September, 2014 appointed Shri Dr V. Malakonda Reddy, Shri J.
Ramakrishnan and Dr K. Srinivasa Rao as Independent Directors under
Section 149 of the Act and Clause 49 (revised) of the Listing Agreement
to hold office for 5 (five) consecutive years.
The Board has appointed Smt B. Sandhyasri, as Additional Director
(Independent Director) w.e.f. 30th March, 2015 and now it is
recommended her appointment to be regularized and be appointed for a
period of 5(Five) years i.e., from 30th March, 2015 to 29th March,
2020.
The Board of Directors of the Company, on the recommendation of the
Nomination and Remuneration Committee, re-appointed Shri G. Srinivasa
Raju as Managing Director of the Company with effect from 12th August,
2015, subject to the approval of the members, at the forthcoming Annual
General Meeting.
In accordance with the provisions of Companies Act, 2013 and the
Articles of Association of the Company Shri S Hanumantha Rao, Director
of the Company will retire by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment.
Shri Y. S. Chowdary, the Chairman and Promoter-Non Executive Director
of the Company resigned from the Board of Directors with effect from
15th October, 2014. The Board placed on record its appreciation for the
outstanding contributions made by Shri Y. S. Chowdary during his
tenure.
The Resolutions proposing their reappointment/appointments as
Independent Directors will be placed before the Shareholders for their
approval at the ensuing Annual General Meeting of the Company.
The Company has received declarations from all the Independent
Directors of the Company confirming that they continue to meet with the
criteria of independence as prescribed under sub-section (6) of Section
149 of the Companies Act, 2013 and under Clause 49 of the Listing
Agreement with the Stock Exchanges.
For Directors seeking appointment/re-appointment in the forthcoming
Annual General Meeting of the Company; the particulars as required to
be disclosed in accordance with Clause 49 (Corporate Governance) of
Listing Agreement, forms part of this Annual Report.
The following persons are Key Managerial Personnel of the Company:
1. Shri G. Srinivasa Raju, Managing Director
2. Shri B. Manoharan, Chief Financial Officer
3. Shri M. Naresh Kumar, Company Secretary and Complaince Officer
During the year there is no change in the role of the aforesaid KMP.
Related Party Transactions:
The Board of Directors, on recommendation of the Audit Committee framed
a policy for Related Party Transaction which includes matters covered
u/s 178(3) of the Companies Act, 2013. The details of the same are
provided in the Corporate Governance Report. The Policy is also posted
in the Investors section of the Company's website.
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large. The
requisite details of the related party transactions entered into during
the financial year are provided in Annexure I included in this report.
Suitable disclosure as required by the Accounting Standards (AS18) has
been made in the notes to the Financial Statements. All Related Party
Transactions are placed before the Audit Committee as also the Board
for approval, wherever required. Prior omnibus approval of the Audit
Committee is obtained for the transactions which are of a foreseeable
and repetitive nature. A statement giving details of all related party
transactions entered into pursuant to the omnibus approval so granted
are placed before the Audit Committee.
None of the Directors, other than to the extent of their shareholding,
receipt of remuneration, has any pecuniary relationships or
transactions vis-a-vis the Company.
Audit Committee:
Your Company has constituted an Audit Committee as per the requirements
of Section 177 of the Companies Act, 2013. The details of the
composition of the Audit Committee as required under the provisions of
Section 177(8) of the Companies Act, 2013, is given in the Corporate
Governance Report furnished as part of the Annual Report. During the
year under review, the Board has accepted all the recommendations of
the Audit Committee.
Sexual Harassment Policy:
The Company as required under the provisions of "The Sexual Harassment
of Women at Workplace (Prohibition, Prevention and Redressal) Act,
2013" has framed a Policy on Prohibition, Prevention and Redressal of
Sexual Harassment of Women at Workplace and matters connected therewith
or incidental thereto.
In the year under review, the Company has not received any complaint
under the said Policy.
Corporate Social Responsibility:
The Board of Directors, on recommendation of the Corporate Social
Responsibility Committee framed a Corporate Social Responsibility
Policy in consonance with Section 135 of the Companies Act, 2013 read
with the rules framed there under duly indicating the activities to be
undertaken by the Company as specified in the Schedule VII of the
Companies Act, 2013. The Corporate Social Responsibility Policy is
posted in the Investors section of the Company's website.
The report on CSR activities is annexed herewith as Annexure-II and
forms part of this report.
Risk Management:
The Risk Management programme at SUIL is focused on ensuring that risks
are known and addressed. The Board of Directors, on recommendation of
the Audit Committee, established a robust Risk Management framework by
framing a Risk Management Policy to deal with all risks including
possible instances of fraud and mismanagement, if any. The Risk
Management Policy details the Company's objectives and principles of
Risk Management along with an overview of the Risk Management process,
procedures and related roles and responsibilities.
The Board is of the opinion that there are no elements of risks that
may threaten the existence of the Company. The board periodically
tracks the progress of implementation of the Risk Management policy.
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 and forms part of this Report.
Statutory Auditors:
The Statutory Auditors of the Company, M/s. T. Raghavendra &
Associates, Chartered Accountants, (Firm Registration Number: 003329S),
were re-appointed by the members at the 25th Annual General Meeting
held on 30th September, 2014 for a term of 3 (Three) years till the
conclusion of 28th Annual General Meeting to be held in 2017. Members
are requested to ratify the same at the ensuing Annual General Meeting
of the company, in accordance with Section 139 of the Companies Act,
2013.
The Audit Report issued by the Statutory Auditors for the financial
year ended 31st March, 2015 forms part of this Report. There are no
qualifications, or adverse remarks made by the Statutory Auditors which
requires explanation or comments from the Board.
Cost Auditors:
M/s. BVR & Associates, Cost Accountants, (Membership Number: M/16851)
Hyderabad were re-appointed as Cost Auditors of the Company for the
Year 2015-16 as per the provisions of the Companies Act, 2013 and the
rules made there under.
The Cost Auditors has submitted the report along with their
observations and suggestions, and Annexure to the Central
Government/stipulated authority within stipulated time period.
Members are requested to ratify the remuneration payable to the Cost
Auditors at the ensuing Annual General Meeting of the Company, in
accordance with Section 148 of the Companies Act, 2013.
Secretarial Audit:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and
rules framed there under, the Board of Directors, on recommendation of
the Audit Committee, appointed Shri Y Ravi Prasada Reddy, Practicing
Company Secretary (CP No.5360) to undertake the Secretarial Audit of the
Company. The secretarial audit report issued by Shri Y Ravi Prasada
Reddy, Practicing Company Secretary for the financial year ending 31st
March, 2015 is given in the Annexure-IV attached hereto and forms part
of this Report. There are no qualifications, reservations or adverse
remarks made by the secretarial auditor and the observation made is self
explanatory and requires no further explanation from the Board.
Extract of Annual Return:
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and
rules framed there 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 Exchange Earnings and Outgo:
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 134 of the Companies Act, 2013, read with the Companies
(Accounts) Rules, 2014 are given in the Annexure-VI attached hereto and
forms part of this Report.
Environment and Social Obligation:
The Company's plants comply with all norms set up for clean and better
environment by the competent authorities. The Company undertakes
regular checks / inspections including certification for the
maintenance of the environment. The Company values environmental
protection and safety as the major considerations in its functioning.
The Company has adequate effluent Treatment Plants to prevent
pollution. The Company is continuously endeavoring to improve the
health and quality of life in the communities surrounding its
industrial complexes.
Particulars of Employees:
The information required pursuant to the provision of Section 197 read
with 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-VII of this Report.
Vigil Mechanism:
The Board of Directors, on recommendation of the Audit Committee,
established a vigil mechanism by framing a Whistle Blower Policy to
deal with instance of fraud and mismanagement, if any. The Vigil
Mechanism framework ensures that strict confidentiality is maintained
whilst dealing with concerns and also that no discrimination shall 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 confirmed incident of fraud/misconduct.
Remuneration Policy:
The Board of Directors, on recommendation of the Nomination and
Remuneration Committee framed a Nomination and Remuneration policy for
selection, appointment and remuneration of Directors, KMP and Senior
Management and matters covered u/s 178(3) of the Companies Act, 2013.
The details of the same are provided in the Corporate Governance
Report.
The Policy is also posted in the Investors section of the Company's
website www.sujana.com.
Board Evaluation:
The Board of Directors evaluated the annual performance of the Board as
a whole, its committee's and the directors individually in accordance
with the provisions of the Companies Act, 2013 and Clause 49 of the
Listing Agreement in the following manner:
* Structured evaluation forms, after taking into consideration inputs
received from the Directors, covering various aspects of the Board's
functioning such as adequacy of the composition of the Board and its
Committees, Board culture, execution and performance of specific
duties, obligations and governance, for evaluation of the performance
of the Board, its Committee's and each director were circulated to all
the members of the Board along with the Agenda Papers.
* The members of the Board were requested to evaluate by filling the
evaluation forms and the duly filled in evaluation forms were required
to be sent to the Company Secretary in a sealed envelope or personally
submitted to the Chairman at the concerned meeting.
* The Board also provided an individual feedback to the concerned
director on areas of improvement, if any.
A separate meeting of Independent Directors was held on 30th March,
2015 to evaluate the performance evaluation of the Non Independent
Directors, the Board and flow of information from management.
Human Resource Management:
Human Capital has gained prime importance in last few years. Our
Company believes that the human capital is of utmost importance to
sustain the market leadership in all product segments and also to
capture new markets. We have identified the high Performers and
rewarded them appropriately, which has helped to achieve better
employee engagement. Competency based training program has been devised
for High - Potential employees with focus on their Individual
Development Plan & helping them to become future leaders.
Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No: 2587/SASF/ CBO and 5937/SASF(SUIL) dated 28th
June, 2005 and 29th October, 2005 respectively, your Company is
required to pay the dividend of Rs. 20.30 lakhs (Previous year Rs.
24.36 lakhs) which represents 1% on 20,30,166 Cumulative Redeemable
Preference Shares (CRPS) of Rs.100/- each to the holders of Cumulative
Redeemable Preference Shares for the year under review. Further your
Company also provided a provision of dividend tax to the extent of Rs.
3.29 lakhs (Previous year Rs. 3.95 lakhs).
With an unprecedented raise costs and interrupted supplies and power
cuts, operations are severely hit. The Company's operations also
hampered during the year. As a result the profit of the Company was
declined and your director's are not proposing any equity dividend
during the year.
Your Company has always emphasized on achieving operational excellence
and continues to focus on customer satisfaction and delight. Backed by
strong fundamentals and robust plans your Company is fully prepared to
face current challenges and benefit from expected medium and long term
growth in Indian economy.
Quality:
Your Company accord to high priority to quality, safety, training,
development, health and environment. The Company endeavors to ensure
continuous compliance and improvements in this regard.
Material Changes and Commitments:
There is no material change and commitment has occurred, affecting the
financial position of the Company, between the end of the financial
year of the Company i.e. 31st March, 2015 and the date of this report.
Details of significant and material Orders passed by the regulators or
courts or tribunals impacting the going concern status of the Company
and the Company's operations in future:
Company petition (C.P. 174/2013) filed by Standard Bank (Mauritius)
Limited (SBML) against the Company u/s 433 of the Companies Act, 1956,
in connection with the corporate guarantee furnished by the Company on
behalf of its step down subsidiary Selene Holdings Ltd, Mauritius and
Company petition (C.P 169/2013) filed by Mauritius Commercial Limited
(MCB) against the Company u/s 433 of the Companies Act, 1956, in
connection with the corporate guarantee furnished by the Company on
behalf of its subsidiary Hestia Holdings Ltd, Mauritius was admitted by
the Hon'ble High Court of Judicature at Hyderabad for the State of
Telangana and The State of Andhra Pradesh, (High Court). However the
Company has filed appeals before the appropriate judicial authority and
also exploring the process of settlement.
Except the above, there are no significant and material orders passed
by the regulators or courts or tribunals impacting the going concern
status of the Company and the Company's operations in future.
Internal Control Systems and their adequacy:
Your Company has an effective Internal Control System to prevent fraud
and misuse of Company's resources and protect shareholders' interest.
Your Company has an independent Internal Audit Department to monitor
and review and focus on the compliances of various business processes.
The internal audit report alongwith audit findings and tracking of
process improvements & compliances is presented for review to the Audit
Committee of Board of Directors.
Corporate Governance:
Your Company has complied with the requirements of Clause 49 of the
Listing Agreement regarding Corporate Governance. Management Discussion
and Analysis Report are given as Annexure - VIII and Report on the
Corporate Governance practices, the Auditors' Certificate on compliance
of mandatory requirements thereof are given as Annexure IX to this
report.
Acknowledgment:
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Suppliers and other Business
Associates.
The Directors also wish to place on record their appreciation for all
the employees for their commitment and contribution towards achieving
the goals of the Company.
The Directors also thank the Governments of various Countries,
Government of India, State Governments in India and concerned
Government Departments/Agencies for their co-operation.
BY ORDER OF THE BOARD
G. Srinivasa Raju S. Hanumantha Rao
Managing Director Director
Place: Hyderabad
Date: 12th August, 2015
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