Mar 31, 2016
To
The Members of Sujana Metal Products Limited,
The Directors have pleasure in presenting the Twenty Sixth Annual Report of your Company together with the Audited Financial Statements of Accounts for the Financial Year ended 31st March, 2016.
Companyâs Performance:
Your Directors hereby report that the Company has achieved a turnover of Rs. 348297.76 lakhs up to 31.03.2016 as against the turnover of Rs. 345159.78 lakhs during the previous financial year ended 31.03.2015.
The highlights of the financial results are as follows:
(Rs. In Lakhs)
Particulars |
2015-2016 |
2014-2015 |
Profit Before Depreciation & Interest |
12099.88 |
26052.58 |
Financial Costs |
22661.43 |
21589.50 |
Depreciation |
3512.26 |
3896.73 |
Profit/Loss Before Tax |
(14095.61) |
537.89 |
Provision for Tax |
||
- Current Tax |
- |
199.67 |
- Deferred Tax |
(3672.44) |
244.46 |
Profit/Loss After Tax |
(10423.17) |
93.76 |
Balance of profit brought forward from earlier years |
11116.84 |
11040.67 |
Add: Excess Provision for IT written off |
||
Profit available for appropriation |
693.67 |
11134.41 |
Appropriations: |
||
Proposed Dividend: |
||
- Equity |
- |
- |
- Preference |
- |
14.93 |
- Dividend Tax |
- |
2.64 |
Balance of Profit |
693.67 |
11116.84 |
Operations & Overall Performance:
During the year under review, your Company reported total income of Rs.349485.62 Lakhs as against Rs. 346188.86 lakhs of previous year. Your company incurred loss before tax of Rs. 14073.81 lakhs as against profit of Rs.566.35 lakhs in the previous year. After making a provision of Rs.22661.43 Lakhs towards interest and Rs.3512.26 Lakhs towards depreciation, the current financial year closed with a net loss of Rs.10423.17 Lakhs as against net profit of Rs.93.76 Lakhs last year.
The net worth of the Company as on 31st March, 2016 is Rs 62877.08 lakhs against Rs.69691.17 lakhs in 2014-15. Net worth is decreased by Rs. 6814.09 lakhs.
Consolidated turnover of Rs.414343.80 lakhs as against Rs.394248.21 lakhs in the previous year and Consolidated Loss before Tax of Rs.13602.74 lakhs as against Profit of Rs.1473.98 lakhs in the previous year.
Despite adverse Global as well as Indian economy, your Company performed moderately and Sujana Metal looks ahead to a hopeful further systematic robustness in the business and operation. Your Directors continue to identify opportunities to leverage and introduce technology to improve our performance, be it in operations, people management, and knowledge management and to strengthen proactive stakeholder relations.
Dividend:
In the absence of profit, your directors are unable to declare any dividend for the financial year 2015-16.
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.
Prospects:
The Government is undertaking proactive policy initiatives for Infrastructure development and Industrial growth, which will accelerate steel demand in line with economic growth. However, concerns like poor availability of iron ore and inconsistent quality as well as high import dependency of coking coal need to be addressed.
Material Changes and Commitments:
There is no material change and commitment has occurred, affecting the financial position of the Company, between the end of the financial year of the Company i.e. 31st March, 2016 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 Companyâs operations in future:
Company petition (C.P. 175/2013) filed by Standard Bank (Mauritius) Limited (SBML) against the Company u/s 433 of the Companies Act, 1956, in connection with the corporate guarantee furnished by the Company on behalf of its step down subsidiary Optimix Enterprises Limited, Mauritius was admitted by the Honâble High Court of Judicature at Hyderabad for the State of Telangana and The State of Andhra Pradesh. The Company has preferred appeal OSA 12 of 2015 against the said admission and the Company Petition No.175 of 2013 is pending for disposal. The Company is also exploring the process of settlement with Standard Bank (Mauritius) Limited.
Except the above , there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company and the Companyâs operations in future.
Deposits
Your Company has not accepted Deposits from Public or Members under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 for the year under review.
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 Companyâs website.
All Related Party Transactions that were entered into during the financial year were on an armâs 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, where ever 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 on a quarterly basis.
None of the Directors, other than to the extent of their shareholding, receipt of remuneration / commission, has any pecuniary relationships or transactions vis-a-vis the Company.
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 Companyâs website.
The Annual Report on CSR activities is annexed herewith as Annexure - II and forms part of this report.
Directorsâ Responsibility Statement:
Directorsâ 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.
Auditors:
(a) Statutory Auditors:
The Companyâs Statutory Auditors, M/s T. Raghavendra & Associates, Chartered Accountants [Registration No.003329S], Hyderabad will retire at the ensuing Annual General Meeting of the Company and being eligible offers themselves for re-appointment for a term of 4 (Four) years i.e., from the conclusion of this Annual General Meeting to the conclusion of the 30th Annual General Meeting in accordance with Section 139 of the Companies Act, 2013.
M/s T. Raghavendra & Associates, has furnished written consent and a certificate of their eligibility obtained as required under second proviso of Section 139(1) of the Companies Act, 2013 read with the rules made thereunder. In terms of the Listing Regulations, they have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.
Your Board of Directors recommended the re-appointment of M/s T. Raghavendra & Associates, Chartered Accountants (Registration No. 003329S), Hyderabad, as Statutory Auditors of your Company. Your approval for such appointment is solicited. Notes to the accounts as referred in the Auditorâs Report are self-explanatory and does not contain any qualification and therefore, do not call for any further comments or explanations.
(b) Cost Auditors:
The Board of your Company has reappointed M/s. Nageswara Rao & Co, Cost Accountants [Firm No.000332] as the Cost Auditor of the Company for financial year 2016-17 pursuant to provisions of Section 148 and other applicable provisions of the Companies Act 2013. The said Auditors have confirmed that their appointment, if made, shall be within the limits as prescribed under Section 141(3) of the Companies Act, 2013. The Cost Audit Report shall be submitted along with full information and explanation on every reservation or qualification contained therein, if any, and Annexure to the Central Government within stipulated time period.
As required by Section 148 of the Companies Act,2013, necessary resolution has been included in the notice convening the Annual General Meeting seeking ratification by the members to the remuneration proposed to be paid to the cost auditors for the financial year ending 31st March,2017.
The Cost Audit Reports the financial year ended March 31, 2015 were filed within the prescribed period.
(c) 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 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, 2016 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.
Share Capital
The paid up equity share capital as on 31st March, 2016 was Rs.15050.54 Lakhs.
In pursuance of Special Resolution passed by the shareholders of the company through postal ballot on 20th March, 2015, to issue 9,95,60,000 equity shares of Rs.5/- each at par [as the price calculated in accordance with the Regulations for Preferential Issue under SEBI (ICDR) Regulations is less than the face value] to the promoters/promotersâ group against the Promotersâ contribution brought in the form of unsecured loans of Rs.49.78 Crores (Rupees Forty Nine Crores and Seventy Eight Lakhs only) as per the CDR package, by way of preferential allotment, the Company allotted 9,95,60,000 equity shares of Rs.5/- each to the promoters on 19.01.2016.
The Company has not issued any share with differential voting rights nor has granted any stock options or sweat equity as on 31st March, 2016. None of the Directors 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 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.
Meetings:
During the year under review 6 (Six) board meetings were held on May 27th, 2015, August 12th, 2015, August 28th, 2015, November 14th, 2015, December 28th, 2015 and February 12th, 2016. The maximum time gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Directors:
During the year under review, the members of the Company at their Annual General Meeting held on September 30th , 2015 appointed Smt B.Sandhyasri as Independent Directors under Section 149 of the Act to hold office for 5 (Five) consecutive years w.e.f March 30, 2015 and re-appointed Shri S. Hanumantha Rao, as the Director - Finance of the Company for a period a 5 (Five) years w.e.f. May 27th, 2015.
During the year, Smt B.Sandhyasri, an Independent and Non Executive Director of the Company resigned from the Board of Directors with effect from May 30th , 2016. The Board placed on record its sincere appreciation and thanks to Smt B. Sandhyasri for her support and guidance provided from time to time during her tenure as Director of the Company. Shri S.Hanumantha Rao, resigned from the position of Director-Finance of the Company and continues as Non-Executive Director of the Company w.e.f: 28.12.2015
The Board has appointed Smt. A. Syamala Reddy as Additional Director (Independent Director) w.e.f August 27th, 2016 and now it is recommended her appointment to be regularized and be appointed for a period of 5(Five) years i.e from September 30th, 2016 to September 30th, 2021. Her appointment on the Board shall also fulfill the requirement of a Woman Director on the Board of the Company as required under the Companies Act, 2013 and Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with 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 reappointment.
The Resolutions proposing their re-appointment/ appointments as 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 Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
None of the Directors of your Company is disqualified under Section 162 (2) of the Companies Act, 2013. As required by law, this position is also reflected in the Auditorsâ Report.
The following persons are Key Managerial Personnel of the Company:
Shri R.K. Birla : Managing Director
Shri Ch. Narayana Rao : Chief Financial Officer
Shri Shaik Ibraheem : Company Secretary
During the year there is no change in the role of the aforesaid KMP.
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 Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, forms part of this Report.
Board Evaluation:
The Board of Directors evaluated the annual performance of the Board as a whole, its committeeâs and the directors individually in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 in the following manner:
Structured evaluation forms, after taking into consideration inputs received from the Directors, covering various aspects of the Boardâs 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 Committeeâs 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, 2016 to evaluate the performance of the Chairman, the Non Independent Directors, the Board and flow of information from management.
Particulars of Employees:
The information required pursuant to the provision of Section 197 read with Rule, 5 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.
Management Discussion and Analysis Report:
Management Discussion and Analysis, forming part of this report as required under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is attached hereto as Annexure-VIII and forms part of this Report.
Corporate Governance:
Your Company is committed to principles of good Corporate Governance. The Board of Directors ensures that your Company is in compliance with all the applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 pertaining to Corporate Governance. A detailed report on Corporate Governance is attached as Annexure-IX and forms part of this report. Certificate from the Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is attached to this report.
Subsidiaries of the Company:
Details of the subsidiaries are given below:
S. No |
Name of the Company |
Status |
Nature of Business |
Country of Incorporation |
Percentage of ownership interest |
1 |
Glade Steel Private Limited |
Subsidiary |
It is engaged in the business of manufacturing, distributing, supplying, selling and other wise dispose of Rounds, Flats, Squares, Angles, Channels, Girders and Allied Products with installed capacity of 75,000 MT/per annum of rerolling and 50,000 MT/per annum of MS ingots |
India |
51.15% |
2 |
Asian Tide Enterprises Limited |
Wholly Owned Subsidiary (WOS) |
It was incorporated in Hong Kong for carrying on the business of trading of goods and services with accent on procuring raw materials (in bulk) for manufacturing activities of the Company (melting scarp for its rolling division) and sale surplus in the market. |
Hong Kong |
100% |
3 |
Alpha Ventures Limited |
Wholly Owned Subsidiary(WOS) |
Alpha Ventures Limited has been promoted to carry out any object not prohibited by the Companies Law (2004) Revision, or as the same may be revised from time to time, or any other law of the Cayman Islands. As per the law prevailing in Cayman Islands |
Cayman Islands |
100% |
4 |
Optimix Enterprises Limited |
Stepdown Subsidiary (WOS of Asian Tide Enterprises Limited) |
It was incorporated in Mauritius for carrying on the business or businesses which are not prohibited under the laws for the time being in force in the Republic of Mauritius. This includes (inter alia) to engage in the business of all forms of investments including but not limited to venture capital and private equity investments whether directly, indirectly through any special purpose vehicles or otherwise. |
Mauritius |
100% |
A separate statement containing the salient features of the Financial Statement for the financial year ended 31st March, 2016 of the aforesaid subsidiary companies are included in the Annual Report as Form AOC-1 as an âAnnexure -Xâ. The Financial statements of the said Subsidiaries Companies are available for inspection by the Shareholders at the Registered office of your Company. Your Company undertakes that the Financial statements of the Subsidiaries Companies shall be made available to the Shareholders of the Company on demand.
Consolidated Financial Statements:
The consolidated financial statements of your Company for the financial year 2015-16, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Regulations as prescribed by the Securities and Exchange Board of India (SEBI).
The consolidated financial statements have been prepared on the basis of audited financial statements of the Company and its subsidiaries.
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.
Internal Control Systems and their adequacy:
Your Company has an effective Internal Control System to prevent fraud and misuse of Companyâs resources and protect shareholdersâ 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 along with audit findings and tracking of process improvements & compliances is presented for review to the Audit Committee of Board of Directors.
The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Corporate Social Responsibility Policy, Risk Management
Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Monitoring and Reporting of Trading by Insiders, Code of Internal Procedures and Conduct for Regulating, Code of Practices and Procedures for Fair Disclosures and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
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 Companyâs website www.sujana.com.
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.
Risk Management :
The Risk Management programme at the Company 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 Companyâs 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.
Industrial Relations:
Your directors are happy to report that the Industrial Relations have been extremely cordial at all levels throughout the year.
Sexual Harassment Policy:
The Company as required under the provisions of âThe Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013â 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.
Environment and Social Obligation:
The Companyâs 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.
Human Resource Management:
The Company believes that Human Resource is its most valuable resource, which has to be nurtured well and equipped to meet the challenges posed by the dynamics of Business Developments. The Company has a policy of continuous training of its employees both in-house. The staff is highly motivated due to good work culture, training, remuneration packages and the values, which the company maintains. Your Directors would like to place on record their deep appreciation of all employees for rendering quality services and to every constituent of the Company be its customers, shareholders, regulatory agencies or creditors. Industrial relations have remained harmonious throughout the year.
Insurance:
All the properties and insurable assets of the Company, including Building, Plant and Machinery, stocks etc., wherever necessary and to the extent required, have been adequately the covered.
Quality:
Your Company accorded high priority to quality, safety, training, development, health and environment. The Company endeavours to ensure continuous compliance and improvements in this regard.
Appreciations:
The Board of Directors take this opportunity to express their deep sense of gratitude to the Central, State Government and Local Authorities, Financial Institutions, Banks, Customers, Dealers, Vendors and all the stakeholders for their continued cooperation and support to your Company.
The Board of Directors wishes to express its appreciation to all the employees of the Company for their outstanding contribution to the successful operations of the Company.
The Board specially thank to the shareholders for their continued confidence and faith in the Company.
BY ORDER OF THE BOARD
R.K.BIRLA S.HANUMANTHA RAO
Managing Director Director
DIN:00118776 DIN:00118801
Place : Hyderabad
Date : August 27th 2016
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Twenty Fifth Annual
Report of your Company together with the Audited Financial Statements
of Accounts for the Financial Year ended 31st March, 2015.
Company 's Performance
Your Directors hereby report that the Company has achieved a turnover
of Rs. 345159.78 lakhs upto 31.03.2015 as against the turnover of Rs.
284441.87 lakhs during the previous financial year ended 31.03.2014.
The highlights of the Financial Results are as follows :
(Rs. In Lakhs)
Particulars 2014-2015 2013-2014
Profit Before Depreciation & Interest 26052.58 17952.84
Financial Costs 21589.50 17255.64
Depreciation 3896.73 3828.66
Profit Before Tax 566.35 (3131.46)
Provision for Tax
* Current Tax 199.67 2.23
* Deferred Tax 244.46 681.88
Profit After Tax 9376 (3815.56)
Balance of profit brought forward from 11040.67 14873.62
earlier years
Add: Excess Provision for IT written off -
Profit available for appropriation 11134.41 11058.06
Appropriations:
Proposed Dividend:
* Equity - -
* Preference 14.93 14.93
- Dividend Tax 2.64 2.54
Balance of Profit 11116.84 11040.59
Operations & Overall Performance:
During the year under review, your Company reported total income of
Rs.346189.69 Lakhs as against Rs.286561.90 lakhs of previous year. Your
company posted profit before tax of Rs.566.35 lakhs as against loss of
Rs.3131.46 lakhs in the previous year. After making a provision of
Rs.21589.50 Lakhs towards interest and Rs.3896.73 Lakhs towards
depreciation, the current financial year closed with a net profit of
Rs.93.76 Lakhs as against net loss of Rs.3815.56 Lakhs last year.
The net worth of the Company as on 31st March, 2015 is Rs 69691.17
lakhs against Rs.69360.00 lakhs in 2013-14. Net worth is increased by
Rs. 331.17 lakhs.
Consolidated turnover of Rs.394248.21 lakhs as against Rs.337328.53
lakhs in the previous year and Consolidated Profit before Tax of
Rs.1473.98 lakhs as against loss of Rs.2057.74 lakhs in the previous
year.
Despite adverse Global as well as Indian economy, your Company
performed moderately and Sujana Metal looks ahead to a hopeful further
systematic robustness in the business and operation. Your Directors
continue to identify opportunities to leverage and introduce technology
to improve our performance, be it in operations, people management, and
knowledge management and to strengthen proactive stakeholder relations.
Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No:2592/SASF/CBO and 5938/SASF/CBO dated 28.06.2005
and 29.10.2005 respectively, your Company is required to pay the
dividend of Rs. 14.93 Lakhs (Previous year Rs.14.93 Lakhs) which
represents 1% on 14,93,365 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. 2.64 Lakhs
(Previous year Rs.2.53 Lakhs)
In view of the current steel scenario, the Board of Directors are of
the opinion that Cash flow should be conserved and hence decided to
plough back the entire profit earned by the Company and have not
recommended any dividend.
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.
Prospects:
The Government is undertaking proactive policy initiatives for
Infrastructure development and Industrial growth, which will accelerate
steel demand in line with economic growth. However, concerns like poor
availability of iron ore and inconsistent quality as well as high
import dependency of coking coal need to be addressed.
Material Changes and Commitments:
There is no material change and commitment has occurred, affecting the
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.175/2013) 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 Optimix Enterprises Limited,
Mauritius was admitted by the Hon 'ble High Court of Judicature at
Hyderabad for the State of Telangana and The State of Andhra Pradesh.
However, the Company has filed appeals before the appropriate judicial
authority and also exploring the process of settlement with Standard
Bank (Mauritius) Limited. 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.
Deposits
Your Company has not accepted Deposits from Public or Members under
Chapter V of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014 for the year under review.
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, where ever 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 on a quarterly basis.
None of the Directors, other than to the extent of their shareholding,
receipt of remuneration / commission, has any pecuniary relationships
or transactions vis-a-vis the Company.
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 Annual Report on CSR activities is annexed herewith as Annexure- II
and forms part of this report.
Directors ' Responsibility Statement:
Directors' Responsibility Statement as required under the provisions of
Section 134(3)(c) of the Companies Act, 2013, is given in the Annexure
-III attached hereto and forms part of this Report.
Auditors:
(a) Statutory Auditors:
The term of office of the Company's existing Statutory Auditors M/s.
CRK & Associates, Chartered Accountants, Hyderabad, will come to an end
at the conclusion of the ensuing Annual General Meeting of the Company.
It is proposed to appoint M/s T. Raghavendra & Associates, Chartered
Accountant (Registration No. 003329S ), Hyderabad, as Statutory
Auditors of the Company for the financial year 2015-16 at such
remuneration as may be fixed by the Board of Directors. Your Board of
Directors recommended the appointment of M/s T. Raghavendra &
Associates, Chartered Accountants (Registration No.003329S), Hyderabad,
as Statutory Auditors of your Company. Your approval for such
appointment is solicited. M/s T. Raghavendra & Associates, has
furnished written consent and a certificate of their eligibility
obtained as required under second proviso of Section 139(1) of the
Companies Act, 2013 read with the rules made thereunder. In terms of
the Listing Agreement, they have confirmed that they hold a valid
certificate issued by the Peer Review Board of the ICAI.
Notes to the accounts as referred in the Auditor's Report are
self-explanatory and does not contain any qualification and therefore,
do not call for any further comments or explanations.
(b) Cost Auditors:
The Board of your Company has reappointed M/s. Nageswara Rao& Co, Cost
Accountants [Firm No.000332] as the Cost Auditor of the Company for
financial year 2015-16 pursuant to provisions of Section 148 and other
applicable provisions of the Companies Act 2013. The said Auditors have
confirmed that their appointment, if made, shall be within the limits as
prescribed under Section 141(3) of the Companies Act, 2013. The Cost
Audit Report shall be submitted along with full information and
explanation on every reservation or qualification contained therein, if
any, and Annexure to the Central Government within stipulated time
period.
As required by Section 148 of the Companies Act,2013, necessary
resolution has been included in the notice convening the Annual General
Meeting seeking ratification by the members to the remuneration
proposed to be paid to the cost auditors for the financial year ending
31st March,2016.
The Cost Audit Reports the financial year ended March 31, 2014 were
filed within the prescribed period.
(c) 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 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.
Share Capital:
The paid up equity share capital as on 31st March, 2015 was Rs.10072.54
Lakhs.
In pursuance of Special Resolution passed by the shareholders of the
company through postal ballot on 10th October 2014, to issue
10,46,60,000 equity shares of Rs.5/- each at par [as the price
calculated in accordance with the Regulations for Preferential Issue
under SEBI (ICDR) Regulations is less than the face value] to the
promoters/promoters' group against the Promoters' contribution brought
in the form of unsecured loans of Rs.52.33 Crores (Rupees Fifty Two
Crores and Thirty Three Lakhs only) as per the CDR package, by way of
preferential allotment, the Company allotted 51,00,000 equity shares of
Rs.5/- each to the promoters on 14.02.2015.
The Company has not issued any share with differential voting rights
nor has granted any stock options or sweat equity as on 31st March,
2015. None of the Directors 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 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.
Meetings:
During the year under review 5 (Five) board meetings were held on May
30th, 2014, August 12th, 2014, August 28th, 2014, November 13th, 2014
and February 14th, 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 of the Company at the AGM
held on September 30th, 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 Sandhyasri, as Additional Director
(Independent Director) w.e.f March 30th, 2015 and now it is recommended
her appointment to be regularized and be appointed for a period of 5
(Five) years i.e from March 30th , 2015 to March 29th, 2020. Her
appointment on the Board shall also fulfill the requirement of a Woman
Director on the Board of the Company as required under the Companies
Act, 2013 and clause 49 of the Listing Agreement.
The Board of Directors of the Company, on the recommendation of the
Nomination and Remuneration Committee, re-appointed Shri S.Hanumantha
Rao as a Director-Finance of the Company with effect from May 27th,
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. R.K.Birla, Managing
Director of the Company will retire by rotation at the ensuing Annual
General Meeting and, being eligible, offers himself for re-appointment.
The Resolutions proposing their reappointment/ appointments as
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 subsection (6) of Section
149 of the Companies Act, 2013 and under Clause 49 of the Listing
Agreement with the Stock Exchanges.
Shri Y.S.Chowdary, a Chairman and Promoter-Non Executive Director of
the Company resigned from the Board of Directors with effect from
October 15th, 2014. The Board placed on record its appreciation for the
outstanding contributions made by Shri Y.S.Chowdary during his tenure.
None of the Directors of your Company is disqualified under Section 162
(2) of the Companies Act, 2013. As required by law, this position is
also reflected in the Auditors ' Report.
The following persons are Key Managerial Personnel of the Company:
Shri R.K.Birla : Managing Director
Shri Ch.Narayana Rao: Chief Financial Officer
Shri Shaik Ibraheem : Company Secretary
During the year there is no change in the role of the aforesaid KMP.
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 report.
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 Chairman, the Non
Independent Directors, the Board and flow of information from
management.
Particulars of Employees:
The information required pursuant to the provision of Section 197 read
with Rule, 5 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.
Management Discussion and Analysis Report:
Management Discussion and Analysis, forming part of this report as
required under Clause 49 (VIII)(D) of the Listing Agreement with the
Stock Exchanges is attached hereto as Annexure- VIII and forms part of
this Report.
Corporate Governance:
Your Company is committed to principles of good Corporate Governance.
The Board of Directors ensures that your Company is in compliance with
all the applicable provisions of the Clause 49 (as amended) of the
Listing Agreement pertaining to Corporate Governance. A detailed report
on Corporate Governance is attached as Annexure-IX and forms part of
this report. Certificate from the Practicing Company Secretary
confirming the compliance with the conditions of Corporate Governance
as stipulated under Clause 49 of the listing agreement is attached to
this report.
Subsidiaries of the Company:
Details of the subsidiaries are given below:
S. Name of the
No. Company Status Nature of Business
1 Glade Steel Subsidiary It is engaged in the business
Private Limited of manufacturing, distributing,
supplying, selling and other
wise dispose of Rounds, Flats,
Squares, Angles, Channels,
Girders and Allied Products
with installed capacity of
75,000 MT/per annum of re-rolling
and 50,000 MT/per annum of MS
ingots
2 Asian Tide Wholly Owned It was incorporated in Hong
Enterprises Subsidiary Kong for carrying on the
Limited (WOS) business of trading of goods
and services with accent on
procuring raw materials (in bulk)
for manufacturing activities of
the Company (melting scarp for
its rolling division) and sale
surplus in the market.
3 Alpha Ventures Wholly Owned Alpha Ventures Limited has been
Limited Subsidiary promoted to carry out any object
(WOS) Islands not prohibited by the
Companies Law (2004) Revision,
or as the same may be revised
from time to time, or any other
law of the Cayman Islands. As per
the law prevailing in Cayman
Islands
4 Optimix Stepdown It was incorporated in Mauritius
Enterprises Subsidiary for carrying on the business
Limited (WOS of or businesses which are not
Asian Tide prohibited under the laws for
Enterprises the time being in force in the
Limited) Republic of Mauritius. This
includes (inter alia) to engage
in the business of all forms of
investments including but not
limited to venture capital and
private equity investments
whether directly, indirectly
through any special purpose
vehicles or otherwise.
S. Name of the Country of Percentage of
No. Company Incorporation ownership interest
1 Glade Steel India 51.15%
Private Limited
2 Asian Tide Hong Kong 100%
Enterprises
Limited
3 Alpha Ventures Cayman 100%
Limited
4 Optimix Mauritius 100%
Enterprises
Limited
A separate statement containing the salient features of the Financial
Statement for the financial year ended 31st March, 2015 of the
aforesaid Subsidiary Companies are included in the Annual Report as
Form AOC-1 as an 'Annexure -X '. The Financial statements of the said
Subsidiary Companies are available for inspection by the Shareholders
at the Registered office of your Company. Your Company undertakes that
the Financial statements of the Subsidiaries Companies shall be made
available to the Shareholders of the Company on demand.
Consolidated Financial Statements:
The consolidated financial statements of your Company for the financial
year 2014-15, are prepared in compliance with applicable provisions of
the Companies Act, 2013, Accounting Standards and Listing Agreement as
prescribed by the Securities and Exchange Board of India (SEBI).
The consolidated financial statements have been prepared on the basis
of audited financial statements of the Company and its subsidiaries.
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.
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.
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.
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.
Risk Management :
The Risk Management programme at SMPL 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.
Industrial Relations:
Your directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
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.
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.
Human Resource Management:
The Company believes that Human Resource is its most valuable resource,
which has to be nurtured well and equipped to meet the challenges posed
by the dynamics of Business Developments. The Company has a policy of
continuous training of its employees both in-house. The staff is highly
motivated due to good work culture, training, remuneration packages and
the values, which the company maintains. Your Directors would like to
place on record their deep appreciation of all employees for rendering
quality services and to every constituent of the Company be its
customers, shareholders, regulatory agencies or creditors. Industrial
relations have remained harmonious throughout the year.
Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately the covered.
Quality:
Your Company accorded high priority to quality, safety, training,
development, health and environment. The Company endeavours to ensure
continuous compliance and improvements in this regard.
Appreciations:
The Board of Directors take this opportunity to express their deep
sense of gratitude to the Central, State Government and Local
Authorities, Financial Institutions, Banks, Customers, Dealers, Vendors
and all the stakeholders for their continued cooperation and support to
your Company.
The Board of Directors wishes to express its appreciation to all the
employees of the Company for their outstanding contribution to the
successful operations of the Company.
The Board specially thank to the shareholders for their continued
confidence and faith in the Company.
BY ORDER OF THE BOARD
R.K.BIRLA S.HANUMANTHA RAO
Place: Hyderabad Managing Director Director-Finance
Date: August 28th 2015 DIN:00118776 DIN:00118801
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Twenty Fourth Annual
Report of your Company together with the Audited Statement of Financial
Accounts for the Financial Year ended 31st March, 2014 comprising of 12
months from 01.04.2013 to 31.03.2014.
1. Company''s Financial Results:
The highlights of the financial results are as follows:
(Rs. In Lakhs)
2013-2014 2012-2013
Particulars (12 Months) (12 Months)
Net sales/Income from Operation 284441.87 364985.48
Other Income 2116.89 1541.59
Total Income 286558.76 366527.07
Operating Profit before 17952.84 20176.62
Depreciation & Interest
Interest 17255.64 18099.73
Depreciation 3828.66 4123.01
Profit /loss before tax (3131.46) (2046.12)
Provision for tax 684.10 (20.01)
Profit/loss before extra-ordinary (3815.56) (2026.11)
items
Extra-ordinary items 0.00 0.00
Profit/loss after extra-ordinary (3815.56) (2026.11)
items
2. Operations & Overall Performance:
During the year under review, your Company reported total income of
Rs.286558.78 Lakhs as against Rs.366527.07 lakhs of previous year. The
operating EBIDTA for the year was Rs.17952.84 lakhs as against
Rs.20176.62 lakhs in the previous year. After making a provision of
Rs.17255.64 Lakhs towards interest and Rs.3828.66 Lakhs towards
depreciation, the current financial year closed with a net loss of
Rs.3815.56 Lakhs as against net loss of Rs.2026.11 Lakhs last year.
The net worth of the Company as on 31st March, 2014(consisting of 12
months) is Rs 69360.00 lakhs against Rs. 73192.96 lakhs in 2012-13
(consisting of 12 months). Net worth is decreased by Rs. 3832.96 lakhs
due to losses.
Despite adverse Global as well as Indian economy, your Company
performed moderately and Sujana Metal looks ahead to a hopeful further
systematic robustness in the business and operation. Your Directors
continue to identify opportunities to leverage and introduce technology
to improve our performance, be it in operations, people management, and
knowledge management and to strengthen proactive stakeholder relations.
3. Industrial Relations:
Your directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
4. Prospects:
With the restructuring of its debt and implementation of the CDR
package as approved by the CDR Cell, your Company believes that it will
gradually be able to progress in its operations towards profitability.
Your Company has been extremely fortunate to have full support of its
employees during this period and all efforts are being made to garner
support from the customers of the Company.
The Government is undertaking proactive policy initiatives for
Infrastructure development and Industrial growth, which will accelerate
steel demand in line with economic growth. However, concerns like poor
availability of iron ore and inconsistent quality as well as high
import dependency of coking coal need to be addressed.
5. Withdrawal of Scheme of Amalgamation:
Scheme of Amalgamation between (1) M/s Lakshmi Gayatri Industries
Private Limited, (2) M/s Glade Steel Private Limited, (3) M/s Sri Ganga
Steel Enterprises Private Limited and (4) M/s Topaz Steel India Limited
with M/s. Sujana Metal Products Limited was withdrawn by the Company
and the order on withdrawal of the Company''s petition was issued by the
Hon''ble High Court, AP on 17.12.2013.
6. Subsidiaries of the Company:
Details of the subsidiaries are given below:
S. Name of the
No Company Status Nate of Business
1 Glade Steel Subsidiary It is engaged in the business of
Private manufacturing, distributing,
Limited supplying, selling and other
wise dispose of Rounds,Flats,
Squares, Angles, Channels,
Girders and Allied Products with
installed capacity of 75,000 MT/per
annum of re-rolling and 50,000 MT/per
annum of MSingots
2 Asian Tide Wholly It was incorporated in Hong Kong for
Enterprises Owned carrying on the
Limited Subsidiary business of trading of goods and
services with accent
on procuring raw materials (in bulk)
for manufacturing activities of the
Company (melting scarp for its rolling
division) and sale surplus in the
market.
3 Alpha Wholly Alpha Ventures Limited has been
Ventures Owned promoted to carry out
Limited Subsidiary any object not
(WOS) prohibited by the Companies Law
(2004) Revision, or as the same
may be revised from time to time, or
any other law of the Cayman Islands.
As per the law prevailing in Cayman
Islands
4 Optimix Stepdown It was incorporated in Mauritius for
Enterprises Subsidiary carrying on the business or businesses
Limited (WOS of which are not prohibited under the
Asian Tide laws for the time being in force inthe
Enterprises Republic of Mauritius. This includes
Limited) (inter alia) to engage in the business
of all forms of investments including
but not limited to venture capital and
private equity investments whether
directly, indirectly through any
special purpose vehicles or otherwise.
S. Name of the Country of percentage
No Company Incorporation of ownership
Intrest
1 Glade Steel India 51.15%
Private
Limited
2 Asian Tide Hong Kong 100%
Enterprises
Limited
3 Alpha Cayman 100%
Ventures Islands
Limited
4 Optimix Mauritius 100%
Enterprises
Limited
Your Company has availed the general exemption from attaching a copy of
the Balance Sheet, Profit and Loss Account, Directors'' Report and
Auditors'' Report of the subsidiary Companies and other documents
required to be attached under Section 212(1) of the Companies Act,
1956, to the Balance Sheet of your Company. The said exemption is
granted vide Circular No. 5/12/2007-Cl-III issued by Ministry of
Corporate Affairs dated 08.02.2011.
Accordingly, the said documents of subsidiary Companies are not being
attached with the Balance sheet of the Company. A gist of the financial
performance of the subsidiary Companies is contained in the report. The
annual accounts of the subsidiary Companies are open for inspection by
any member/ investor at the Company''s Registered office and the Company
will make available these documents and the related detailed
information upon request by any investor of the Company or any investor
of its subsidiary Companies who may be interested in obtaining the
same. A statement containing brief financial details of the Company''s
subsidiaries for the financial year ended March 31, 2014 is annexed to
this Report.
In terms of Clause 32 of the Listing Agreement with the Stock Exchanges
and as prescribed by Accounting Standard 21 notified by the Government
of India under Section 211(3C) of the Companies Act, 1956, the Audited
Consolidated Financial Statements are annexed.
7. Corporate Governance:
Your Company is committed to principles of good Corporate Governance.
The Board of Directors ensures that your Company is in compliance with
all the applicable provisions of the Clause 49 (as amended) of the
Listing Agreement pertaining to Corporate Governance. A detailed report
on Corporate Governance is attached and forms part of this report.
Certificate from the Practicing Company Secretary confirming the
compliance with the conditions of Corporate Governance as stipulated
under Clause 49 of the listing agreement is attached to this report.
8. Management Discussion and Analysis Report:
The Management Discussion and Analysis Report forms part of the Annual
Report.
9. Directors:
In accordance with the provisions of Section 152 of the Companies Act,
2013 and in terms of the Articles of Association of the Company, Shri
Y.S. Chowdary and Shri G. Srinivasa Raju, Directors retire by rotation
at the forthcoming Annual General Meeting and being eligible, offers
themselves for re- appointment.
ln terms of the Companies Act, 2013 (''Act'') Independent Directors are
required to be excluded while computing the number of directors to
retire by rotation. Accordingly, it is proposed to change the terms of
office of Shri S. Hanumantha Rao and Shri R.K. Birla from non-retiring
to retiring by rotation.
As of the date of this Report, Shri J. Ramakrishnan, Dr. K. Srinivasa
Rao and Dr. V. Malakonda Reddy are Independent Directors as per Clause
49 of the Listing Agreement and were appointed under the Companies Act
1956 as Directors liable to retire by rotation. In order to give effect
to the applicable provisions of sections 149 and 152 of the Act, it is
proposed that these Directors be appointed as Independent Directors, to
hold office for five consecutive years, for a term up to September 29,
2019.
Further Shri. Chintapalli Srinivasu was appointed as IDBl Nominee
Director of the Company in place of Shri. Ashok Kumar De, w.e.f.
30.05.2014 and Shri Vimlesh Kumar was appointed as PNB Nominee Director
of the Company w.e.f. 28.08.2014.
The Board places on record its appreciation for the valuable services
rendered by Shri Ashok Kumar De during association as a Nominee
Director of the Company.
10. Directors'' Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating management,
confirm that-
a. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and loss of the Company
for that year;
c. that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. That they have prepared the annual accounts on a going concern
basis.
11. Disclosures under Section 217(1)(d) of the Companies Act, 1956:
Material changes and commitments which can affect the financial
position of the Company occurred between the end of the financial year
of the Company and date of this report:
S.No Particulars (Yes/No)
(a) The purchase, sale or destruction of a plant
or the destruction of inventories. No
(b) A material decline in the market value of
inventories or investments No
(c) The expiration of a patent which had given the No
Company a virtual monopoly in the sale of its
principal products.
(d) The settlement of tax liabilities of prior period No
and the settlement of any legal or other proceedings
either favourably or adversely, if they were pending at the
balance-sheet date
(e) The institution of importance proceedings against No
the Company.
(f) Material change in the capital structure in the No
resulting from the issuance, retirement or conversion
of share capital or stock .
(g) The disposal of a substantial part of the No
undertaking or the profits or loss whether
of a capital or revenue nature.
(h) Alteration in the wage structure arising out of No
Union Negotiations.
(i) Incurring or any reduction of long-term indebtedness. No
(j) Entering into or cancellation of contracts. No
(k) Refund of taxes or completion of assessments No
12. Statutory Auditors:
The Company''s Statutory Auditors, M/s CRK & Associates, Chartered
Accountants [Registration No.010004S], Hyderabad will retire at the
ensuing Annual General Meeting of the Company and being eligible offers
themselves for re-appointment.
The Company has received necessary certificates from the Auditor
pursuant to Section 139 and 141 of the Companies Act, 1956, regarding
their eligibility for re-appointment. Accordingly, the approval of the
Shareholders for the re-appointment of M/s. CRK & Associates, Chartered
Accountants as Auditors of the Company is being sought at the ensuing
Annual General Meeting.
Your Board recommends the appointment of M/s. CRK & Associates,
Chartered Accountants as Auditors of the Company to hold office from
the conclusion of this Annual General Meeting until the conclusion of
the next Annual General Meeting of the Company.
13. Cash Flow Analysis:
In conformity with the provisions of Clause 32 of the Listing Agreement
the Cash Flow Statement for the year ended 31st March, 2014 is included
in the annual accounts.
14. Personnel:
The relations with employees continued to be cordial throughout the
year. The Board appreciates the willful co-operation and team spirit in
the Management Cadre and other employees of the Company.
Information required to be furnished under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended is annexed to this report.
15. Human Resource Management:
The Company believes that Human Resource is its most valuable resource,
which has to be nurtured well and equipped to meet the challenges posed
by the dynamics of Business Developments. The Company has a policy of
continuous training of its employees both in-house. The staff is highly
motivated due to good work culture, training, remuneration packages and
the values, which the company maintains. Your Directors would like to
place on record their deep appreciation of all employees for rendering
quality services and to every constituent of the Company be its
customers, shareholders, regulatory agencies or creditors. Industrial
relations have remained harmonious throughout the year.
16. Dividend:
In the absence of profit, your directors are unable to declare any
dividend for the year 2013-2014.
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No:2592/SASF/CBO and 5938/SASF/ CBO dated 28.06.2005
and 29.10.2005 respectively, your Company is required to pay the
dividend of Rs. 14.93 Lakhs (Previous year Rs.14.93 Lakhs) which
represents 1% on 14,93,365 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. 2.43 Lakhs
(Previous year Rs.2.42 Lakhs).
17. Quality:
Your Company accorded high priority to quality, safety, training,
development, health and environment. The Company endeavours to ensure
continuous compliance and improvements in this regard.
18. Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately the covered.
19. Listing of Company''s Securities:
Your Company''s shares are currently listed on Bombay Stock Exchange
Limited, National Stock Exchange of India Limited and Madras Stock
Exchange Limited.
20. Dematerialization of Shares:
Your Company shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSIL).
21. Fixed Deposits:
Your Company has not accepted any fixed deposits from the public and is
therefore, not required to furnish information in respect of
outstanding deposits under Non-banking, Non-financial Companies
(Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits)
Rules, 1975 and the provisions of the Companies Act,2013 are not
applicable.
22. Cost Auditors:
M/s. Nageswara Rao & Co, Cost Accountants [Firm No.000332], Hyderabad,
have been duly appointed as Cost Auditors for conducting audit of Cost
Accounting Records in respect of steel products manufactured by the
Company for the year 2014-15. They were also the cost auditors for the
previous year 2013-14. As required by Section 148 of the Companies Act,
2013, necessary resolution has been included in the notice convening
the Annual General Meeting seeking ratification by the members to the
remuneration proposed to be paid to the cost auditors for the financial
year ending 31st March, 2015.
The Cost Audit Reports are required to filed within 180 days from the
end of the financial year. The Cost Audit Reports the financial year
ended March 31, 2013 were filed within the prescribed period. The Cost
Audit Reports for the financial year ended March 31st, 2014 will be
filed within the prescribed time period.
23. Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The details regarding Energy Conservation, Technology Absorption,
Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of the
particulars in the report of the Board of Directors) Rules, 1988 are
given in the Annexure 1 and forms part of this report.
24. Corporate Social Responsibility:
Pursuant to the provisions of Section 135 the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules,
2014, your Company has constituted the Corporate Social Responsibility
Committee to monitor the Corporate Social Responsibility Policy of the
Company from time to time and to recommend the amount of expenditure to
be incurred on the activities related to CSR.
Your Company is committed socially not only to compliances of all the
statutory laws and regulations but also actively participates in the
improvement of quality of life of society at large. Your Company has a
strong sense of community responsibility. Your Company follows the
policy which is more and more beneficial to the society at large by
promoting and encouraging economic, social and educational development
and also giving active support to local initiatives around its area of
operation thereby promoting upliftment of people in varied arenas of
life.
Your Company has retained collective focus
on the various areas of corporate sustainability that impact people,
environment and the society at large. Founded on the philosophy that
society is not just another stakeholder in its business, but the prime
purpose of it, your Company, across its various operations is committed
to making a positive contribution.
25. Code of conduct for Independent Directors:
As the New Companies Act, 2013 has been made effective from 01st April,
2014 which replaces the erstwhile Companies Act, 1956 (to the extent of
notified sections) and the provision of Section 149(8) requires that
the company and independent directors shall abide by the provisions
specified in Schedule IV (i.e Code of Conduct for Independent
Directors).
Your Company has adopted the Code of Conduct for Independent Directors
vide resolution passed by the Board of Directors under Section 149(8)
of the Companies Act, 2013 at their meeting held on 30.05.2014.
26. Whistle Blower Policy and Vigil Mechanism:
Your Company recognizes the value of transparency and accountability in
its administrative and management practices. The Company promotes the
ethical behavior in all its business activities. The Company has
adopted the Whistle blower Policy and Vigil Mechanism in view to
provide a mechanism for the directors and employees of the Company to
approach Audit Committee of the Company to report existing/probable
violations of laws, rules, regulations or unethical conduct.
27. Reconstitution of various committees of Board of Directors:
Board of Directors of the Company, in accordance with Section 177 and
178 of the Companies Act, 2013 read with Companies (Meetings of Board
and its Powers) Rules, 2014 and amended Clause 49 of the Listing
Agreement, has reconstituted and widened the various Committees of the
Board.
Accordingly, the Company has renamed its existing Remuneration
Committee as Nomination and Remuneration Committee and have delegated
to it powers as required under section 178 of the Act. Pursuant to
Clause 49 (VI) of the listing agreement , your Company has constituted
Risk Management Committee for framing, implementing and monitoring the
risk management plan for the Company.
The scope of Audit Committee has been widened so as to bring it in
accordance with the requirement of the Section 177 of the Companies
Act, 2013. The Company has also constituted a Corporate Social
Responsibility Committee as required under Section 135 of the Companies
Act, 2013.
28. Explanations to qualifications in Auditors'' Report:
There are no qualifications in the Auditors'' Report dated 30th May,
2014. Your Board of Directors wish to state that the relevant notes
forming part of the Company''s Accounts are self-explanatory and hence
do not require any further explanation from the Board.
29. Appreciations:
The Board of Directors of the Company extends their sincere
appreciation to the Government, Bankers, Financial Institutions and
others for their kind support. On behalf of the Company, the Board of
Directors thanks the Employees for their valuable efforts and the
shareholders for their undaunted faith in the Company.
BY ORDER OF THE BOARD
R.K.BIRLA S.HANUMANTHA RAO
MANAGING DIRECTOR
PLACE: Hyderabad DIRECTOR (FINANCE)
DATE: 28.08.2014
Mar 31, 2013
To The Members of Sujana Metal Products Limited,
The Directors have pleasure in presenting the Twenty Third Annual
Report of your Company together with the Audited Statement of Financial
Accounts for the Year ended 31st March, 2013.
1. Company''s Performance:
Your Directors hereby report that the Company has achieved a turnover
of Rs. 364,985.48 lakhs upto 31.03.2013 consisting of Twelve (12)
months, as against the turnover of Rs. 353,836.35 lakhs during the
previous financial year ended 31.03.2012 consisting of Twelve (12)
months.
The highlights of the financial results are as follows:
(Rs. In Lakhs)
2012-2013 2011-12
Particulars
(12 Months) (12 Months)
Operating Profit 18635.03 22122.24
before Depreciation & Interest
Interest 18099.73 17228.30
Depreciation 4123.01 4694.62
Operating Profit after (3587.71) 199.32
depreciation and Interest
Other Income 1541.59 2332.66
Profit before tax (204 6.12) 2531.98
Provision for tax (20.01) 448.98
Profit before extra- (2026.11) 2083.00
ordinary items
Extra-ordinary items 0.00 0.00
Profit after extra- (2026.11) 2083.00
ordinary items
2. Review of Operations:
During the financial year 2012-13, your Company has incurred a net loss
of Rs.2026.11 lakhs. The Management on its part filed an application
with CDR Cell, Mumbai for restructuring of its debts under Corporate
Debt Restructuring (CDR) Scheme so that it can help the Company to
improve its financial position so as to imrpove the service to the
lenders in future and also modernize, expand and diversify in order to
come out of problem.
The Company is pleased to inform that CDR package has been approved by
the CDR Empowered Group, Mumbai vide its letter dated: 28.03.2013 and
various requirements are being complied with respect to the said
corporate debt restructuring.
3. Industrial Relations:
Your directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
4. Prospects:
Your Company had made a reference to the Corporate Debt Restructuring
(CDR) cell constituted by Reserve Bank of India for restructuring of
its financial debt. The CDR Cell positively considered the request of
the Company and has approved the debt restructuring proposal given by
the Company. For the purpose of implementation of the approved package
as also to comply with the post-implementation requirements, Punjab
National Bank the lead consortium bank of the Company has been
appointed as Monitoring Institution (MI) by the CDR Cell. To facilitate
the process of monitoring of progress of sanction and implementation of
the approved package by respective lenders and to revive the
performance of the Company/ restructuring package on a continuous
basis, a Monitoring Committee (MC), comprising of representatives of
Punjab National Bank, State Bank of Patiala, Bank of Baroda and Bank of
India has also been constituted.
With the restructuring of its debts and implementation of the CDR
package as approved by the CDR Cell, your Company believes that it will
gradually be able to progress in its operations towards profitability.
Your company has been extremely fortunate to have full support of its
employees during this period and all efforts are being made to garner
support from the customers of the Company.
5. Scheme of Amalgamation:
Board of Directors of the Company at their meeting held on 12th
November, 2010 approved the Scheme of amalgamation between (1) M/s
Lakshmi Gayatri Industries Private Limited, (2) M/s Glade Steel Private
Limited, (3) M/s Sri Ganga Steel Enterprises Private Limited and (4)
M/s Topaz Steel India Limited with M/s. Sujana Metal Products Limited
w.e.f: 01.10.2009. The Amalgamation would result in synergy of
operations and also reduce the overhead and administrative costs
substantially, by combining these units it will meet the competition in
the domestic and international market and also helps to meet the
international standards and it will also reduce the inventory levels
which will result in significant savings in procurement of inventory
and carrying costs of the inventory.
Necessary approvals from the Bombay Stock Exchange Limited (BSE),
National Stock Exchange of India Limited (NSE) and Madras Stock
Exchange Limited (MSE) have been obtained vide their Letter Nos DCS/
AMAL/NTP/24(f)/983/2010-11 dated:24th December, 2010,NSE/LIST/153641-Z
dated : 14thDecember, 2010 and MSE/LD/ PSK/738/593/10 dated:16th
December, 2010 respectively.
The Company Law Board, Southern Region Bench, Chennai has approved the
shifting of registered office of M/s Sriganga Steel Enterprises Private
Limited(Third Transferor Company) from the state of Tamilnadu to Andhra
Pradesh on 17th February, 2011 .
By an order dated: 28.03.2011, the Hon''ble High Court of Andhra Pradesh
, Hyderabad has directed that meetings of the Shareholders and Secured
Creditors of the Company be held at Anjuman Hall, Hotel Taj Banjara,
Road No.1, Banjara Hills, Hyderabad-500034 on Thursday the 28th day of
April, 2011 at 2.30 P.M. and 3.30 P.M respectively for the purpose of
considering and approving the proposed scheme of amalgamation.
On 28.04.2011, Shareholders and Secured creditors of the Company passed
the resolution for approving the Scheme of Amalgamation with requisite
majority. The petition under Section 394 read with Section 391(2) of
the Companies Act, 1956 for sanction of Scheme of amalgamation was
filed with the Hon''ble High Court of Judicature at Andhra Pradesh on
15.06.2011 and admitted on 15.07.2011. As on the date of this report,
the Company has not yet received the order from Hon''ble High Court of
Judicature at Andhra Pradesh.
6. Subsidiaries of the Company:
Details of the subsidiaries are given below:
Indian Subsidiaries:
(a) Glade Steel Private Limited
M/s Glade Steel Private Limited, Hyderabad, is a subsidiary of the
Company. It is engaged in the business of manufacturing, distributing,
supplying, selling and other wise dispose of Rounds, Flats, Squares,
Angles, Channels, Girders and Allied Products with installed capacity
of 75,000 MT/per annum of re-rolling and 50,000 MT/per annum of MS
ingots.
Overseas Subsidiaries
(a) Alpha Ventures Limited
Alpha Ventures Limited is a Wholly Owned Subsidiary Company
incorporated on 6 March 2007 in Cayman Islands. Alpha Ventures Limited
has been promoted to carry out any object not prohibited by the
Companies Law (2004) Revision, or as the same may be revised from time
to time, or any other law of the Cayman Islands. As per the law
prevailing in Cayman Islands, Financial Statements of M/s Alpha Venture
Limited are not required to be audited.
(b) Asian Tide Enterprises Limited
Asian Tide Enterprises Limited, is a Wholly Owned Subsidiary Company.
It was incorporated on 3 July 2007 in Hong Kong for carrying on the
business of trading of goods and services with accent on procuring raw
materials (in bulk) for manufacturing activities of the Company
(melting scarp for its rolling division) and sale surplus in the
market.
(c) Optimix Enterprises Ltd
Optimix Enterprises Ltd, is a Wholly Owned Subsidiary of Asian Tide
Enterprises Limited,Hong Kong and step down subsidiary of your Company.
It was incorporated on 22nd August, 2011 in Mauritus for carrying on
the business or businesses which are not prohibited under the laws for
the time being in force in the Republic of Mauritius. This includes
(inter alia) to engage in the business of all forms of investments
including but not limited to venture capital and private equity
investments whether directly, indirectly through any special purpose
vehicles or otherwise.
Statement pursuant to Section 212(1)(e) of the Companies Act,1956
relating to Subsidiary Companies, as at 31st March,2013, is also
annexed to this report.
7. Consolidated Financial Statements:
Your Company has availed the general exemption from attaching a copy of
the Balance Sheet, Profit and Loss Account, Directors'' Report and
Auditor''s Report of the subsidiary Companies and other documents
required to be attached under Section 212(1) of the Companies Act,
1956, to the Balance Sheet of your Company. The said exemption is
granted vide Circular No. 5/12/2007-CL-III issued by Ministry of
Corporate Affairs dated 08.02.2011.
Accordingly, the said documents of subsidiary Companies are not being
attached with the Balance sheet of the Company. A gist of the financial
performance of the subsidiary Companies is contained in the report. The
annual accounts of the subsidiary Companies are open for inspection by
any member/investor at the Company''s Registered office and the Company
will make available these documents and the related detailed
information upon request by any investor of the Company or any investor
of its subsidiary Companies who may be interested in obtaining the
same. A statement containing brief financial details of the Company''s
subsidiaries for the financial year ended March 31, 2013 is annexed to
this Report.
In terms of Clause 32 of the Listing Agreement with the Stock Exchanges
and as prescribed by Accounting Standard 21 notified by the Government
of India under Section 211(3C) of the Companies Act, 1956, the Audited
Consolidated Financial Statements are annexed.
8. Corporate Governance:
Your Company has complied with the requirements of Clause 49 of the
listing agreement regarding Corporate Governance. A detailed repor t on
Corporate Governance is attached and forms part of this report. A
Certificate from the Practicing Company Secretary confirming the
compliance with the conditions of Corporate Governance as stipulated
under Clause 49 of the listing agreement is attached to this report.
9. Management Discussion and Analysis Report:
A separate Management Discussion and Analysis Report is also attached
and forms part of this report.
10. Directors:
In accordance with the provisions of the Companies Act, 1956 and the
Company''s Articles of Association, Shri Y.S. Chowdary and Dr. K.
Srinivasa Rao, Directors retire by rotation at the forthcoming Annual
General Meeting and being eligible, offers themselves for
re-appointment.
11. Directors'' Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating management,
confirm that-
a. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and loss of the Company
for that year;
c. that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. That they have prepared the annual accounts on a going concern
basis.
12. Disclosures under Section 217(1)(d) of the Companies Act, 1956:
Material changes and commitments which can affect the financial
position of the Company occurred between the end of the financial year
of the Company and date of this report:
Change
S.No Particulars (Yes/No)
(a) The purchase, sale or destruction of a plant or the
destruction of inventories. No
(b) A material decline in the market value of
inventories or investments No
(c) The expiration of a patent which had given the No
Company a virtual monopoly in the sale of its
principal products.
(d) The settlement of tax liabilities of prior period No
and the settlement of any legal or other proceedings
either favourably or adversely, if they were pending
at the balance-sheet date.
(e) The institution of importance proceedings against
the Company. No
(f) Material change in the capital structure in the No
resulting from the issuance, retirement or conversion
of share capital or stock .
(g) The disposal of a substantial part of the undertaking No
or the profits or loss whether of a capital or
revenue nature.
(h) Alteration in the wage structure arising out of Union
Negotiations. No
(i) Incurring or any reduction of long-term indebtedness. No
(j) Entering into or cancellation of contracts. No
(k) Refund of taxes or completion of assessments No
13. Code of conduct
The Board has laid down a Code of Conduct for all Board Members and
Senior Management of the Company. The Code of Conduct has been posted
on the Company''s website. Board Members and Senior Management personnel
have affirmed compliance with the Code for the financial year 2012- 13.
A separate declaration to this effect is made out in the Corporate
Governance Report.
14. Statutory Auditors:
The Company''s Statutory Auditors, M/s CRK & Associates, Chartered
Accountants, Hyderabad (Regn. No. 010004S) will retire at the ensuing
Annual General Meeting of the Company and being eligible offers
themselves for re-appointment.
The Company has received necessary certificates from the Auditor
pursuant to Section 224(1B) of the Companies Act, 1956, regarding their
eligibility for re-appointment. Accordingly, the approval of the
Shareholders for the re-appointment of M/s. CRK & Associates, Chartered
Accountants as Auditors of the Company is being sought at the ensuing
Annual General Meeting.
Your Board recommends the appointment of M/s. CRK & Associates,
Chartered Accountants as Auditors of the Company.
15. Cash Flow Analysis:
In conformity with the provisions of Clause 32 of the Listing Agreement
the Cash Flow Statement for the year ended 31st March 2013 is included
in the annual accounts.
16. Personnel:
The relations with employees continued to be cordial throughout the
year. The Board appreciates the willful co-operation and team spirit in
the Management Cadre and other employees of the Company.
Information required to be furnished under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended is annexed to this report.
17. Human Resource Management:
With the size of expansion going in the Company, human resources assume
greater importance and have a significant place in the Organizational
Structure. Your Company has been able to create a favorable work
environment that encourages innovation and meritocracy. Your Company
has put in place a scalable recruitment and human resource management.
The efforts of your Company in the area of employee management and HR
practices have been proved effective in Human Resource Management.
Emphasis is given to the overall development of the personality of
individual employee. Welfare schemes for employees and their families
are run in the factories.
18. Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No:2592/ SASF/CBO and 5938/SASF/CBO dated 28.06.2005
and 29.10.2005 respectively, your Company is required to pay the
dividend of Rs. 14.93 Lakhs (Previous year Rs.14.93 Lakhs) which
represents 1% on 14,93,365 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. 2.42 Lakhs
(Previous year Rs.2.48 Lakhs)
19. Quality:
Your Company accorded high priority to quality, safety, training,
development, health and environment. The Company endeavours to ensure
continuous compliance and improvements in this regard.
20. Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately covered.
21. Listing of Company''s Securities:
Your Company''s shares are currently listed on Bombay Stock Exchange
Limited, National Stock Exchange of India Limited and Madras Stock
Exchange Limited and The Global Depository Receipts are currently
listed at the Luxembourg Stock Exchange.
22. Dematerialization of Shares:
Your Company shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSIL).
23. Fixed Deposits:
The Company has not accepted any fixed deposits and the provisions of
Section 58A of the Companies Act, 1956 are not applicable.
24. Cost Auditors:
In pursuance of Section 233B of the Companies Act, 1956 read with
circular no. 52/26/CAB Â 2010 the Company has appointed M/s Nageswara
Rao & Co, Cost Accountants, Secunderabad (Firm No. 332) as the Cost
Auditors for conducting audit of Cost Accounting Records in respect of
steel products manufactured by the Company for the year 2012-13. The
approval of the Central Government for the appointment has been
received. The Company has reappointed them as Cost Auditors for the
financial year 2013- 2014.
Cost accounting records for the year ended 31st March, 2013 were
maintained as per the Companies (Cost Audit Report) Rules, 2011. The
Cost Auditor shall submit the report along with their observations and
suggestions, and Annexure to the Central Government within stipulated
time period.
25. Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The details regarding Energy Conservation, Technology Absorption,
Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of the
particulars in the report of the Board of Directors) Rules, 1988 are
given in the Annexure 1 and forms part of this report.
26. Explanations to any qualifications in Auditors'' Report:
There are no qualifications in the Auditors'' Report dated 28th May,
2013. Your Board of Directors wish to state that the relevant notes
forming part of the Company''s Accounts are self-explanatory and hence
do not require any further explanation from the Board.
However, the management views on some of the comments to annexure to
the Auditor''s report are as follows:
1. Paragraph (vii) (a) in annexure to the Audit Report, according to
the records of the company, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees''
State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom
Duty, Excise Duty, cess to the extent applicable and any other
statutory dues have generally been regularly deposited with the
appropriate authorities. According to the information and explanations
given to us there were no outstanding statutory dues except Income Tax
as on 31st of March, 2013 for a period of more than six months from the
date they became payable.
Management View:
The Company is in the process of amalgamation of the companies i.e. M/s
Lakshmi Gayatri Industries Private Limited, M/s Glade Steel Private
Limited, M/s Sri Ganga Steel Enterprises Private Limited and M/s Topaz
Steel India Limited with Sujana Metal Products Limited w.e.f.1.10.2009.
The Scheme under the consideration of the Honorable High Court of
Andhra Pradesh, upon the scheme of amalgamation which is becoming
effective, no liability is arises.
2. Paragraph (vii) (b) in annexure to the Audit Report, according to
the information and explanations given to us, there are amounts payable
in respect of income tax, sales tax, customs duty and excise duty which
have not been deposited on account of disputes. They are detailed as
follows.
F.Y to which Amount in
Name of the Statute matters pertain Rs. (Lakhs)
Income Tax Act,1961 2005-06 1517.25
2009-10
Central Excise 1995-2010 1771.26
Act,1944 2012-13 246.46
Customs Act,1962 1998-99 308.28
2008-09 215.08
2012-13 15.27
Foreign Exchange 1995-1996 630
Regulation Act,1973
APGST Act,1957 2002-03 438.18
2003-04 768.88
Central Sales Tax Act, 2005-08 51.91
1956 2006-07 241.34
Tamilnadu Value 2006-07 194.92
Added Tax Act,2006 2012-13 200.00
Name of the Statute Forum where matter is pending
Income Tax Act,1961 Income Tax Appellate Tribunal,
Commissioner of Income Tax (Appeal)
Central Excise Act,1944 Central Excise &Service Tax Appellate
Tribunal, Commissioner of Central
Excise
Customs Act,1962 Commissioner (Customs), Sea Port,
Chennai, CESTAT Bangalore
Foreign Exchange Hon''ble High Court of Delhi
Regulation Act,1973
APGSt Act,1957 Sales Tax Appellate Tribunal,
Commercial Tax Officer
Central Sales Tax Appellate Deputy Commissioner,
Hon''ble High Court of Andhra Pradesh
Tamilnadu Value Hon''ble High Court of Tamilnadu
Added Tax Act, 2006
Management View:
As the liabilities are disputed and the matters are pending with the
respective statutory authorities, the Company has not remitted the
same. The Company has taken an opinion from leading tax practitioners''
who are in respective fields and opined that the Company has a good
chance of getting favorable verdict in all these cases. However, the
same were disclosed as contingent liabilities in the notes on accounts
of financial statements.
3. Paragraph (ix) in annexure to the Audit Report, Based on our audit
procedures and on the information and explanations given by the
management, we are of the opinion that, there have been delays in
repayment of dues to financial institutions.
Maximum Amount Maximum Remarks
Banks Default (Rs. in Period of
lakhs) Default
SASF Chennai (IDBI)
Principal 736.00 304 CDR scheme not
Interest 352.08 335 approved by SASF
SASF Vizag (IDBI)
Principal 515.25 212 CDR scheme not
approved by SASF.
Interest 325.24 335
Due to CDR approval, Repayment schedule is postponed .So the Company
does not fall under default in repayment for the banks namely IOB,BOI,
ANDHRA BANK & PNB (LONG TERM) as per CDR in this current period of
2012-2013.
Management View:
Your Company had received approved letter from SASF dated 18th July,
2013 stating that they are participating CDR scheme along with other
Banks.
27. Appreciations:
The Board of Directors of the Company extends their sincere
appreciation to the Government, Bankers, Financial Institutions and
others for their kind support. On behalf of the Company, the Board of
Directors thanks the Employees for their valuable efforts and the
shareholders for their undaunted faith in the Company.
BY ORDER OF THE BOARD
PLACE: Hyderabad R.K.BIRLA S.HANUMANTHA RAO
DATE : 13.08.2013 MANAGING DIRECTOR DIRECTOR (FINANCE)
Mar 31, 2012
To The Members of Sujana Metal Products Limited,
The Directors have pleasure in presenting the Twenty Second Annual
Report of your Company together with the Audited Statement of Financial
Accounts for the Financial Year ended 31st March, 2012 comprising of 12
months from 01.04.2011 to 31.03.2012.
1. Company's Performance:
Your Directors hereby report that the Company has achieved a turnover
of Rs. 353836.35 lakhs upto 31.03.2012 consisting of Twelve (12)
months, as against the turnover of Rs. 425400.18 lakhs during the
previous financial year ended 31.03.2011 consisting of Eighteen (18)
months.
The highlights of the financial results are as follows:
(Rs. In Lakhs)
2011-12 2009-2011
Particulars (12 Months) (18 Months)
Operating 22122.24 32139.98
Profit before
Depreciation &
Interest
Interest 17228.30 19430.77
Depreciation 4694.62 7069.95
Operating Profit 199.32 5639.26
after depreciation
and Interest
Other Income 2332.66 898.65
Profit before tax 2531.98 6537.91
Provision for tax 448.98 2669.22
Profit before extra- 2083.00 3868.69
ordinary items
Extra-ordinary -- --
items
Profit after extra- 2083.00 3868.69
ordinary items
2. Review of Operations:
Growth in Revenue and Profit During the period under review, your
Company recorded a total income of Rs.356169.01 lakhs, compared to Rs.
426298.83 lakhs (annualized total income Rs.284199.22) in the previous
financial period, which represents a 25.32 % annualized growth. The net
profit for the year stands at Rs. 2083.00 lakhs as compared to the net
profit of Rs. 3868.69 lakhs (annualized net profit Rs.2579.13) in the
previous period, which represents a 19.24 % annualized decrease over
the previous period.
3. Industrial Relations:
Your directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
4. Prospects:
Indian GDP is estimated at 7.6% in F.Y.2012- 13 as per Prime
Minister's Economic Advisory Council (PMEAC). Indian steel demand is
also expected to track GDP growth supported by easing interest rate
cycle and resultant revival in infrastructure, construction, industrial
and manufacturing sectors. Prediction of good monsoon in the current
year, declining commodity prices globally, lower interest rates are
positive to spur economic activity in the country. Notwithstanding,
fragile recovery in US, sovereign debt crisis in Europe and slow down
in china, domestic demand/ consumption is one of the primary drivers of
Indian Economy, to be optimistic to show a GDP growth of above 7%.
While continuing its growth thrust on secondary steel segment, your
Company is actively contemplating forward as well as backward
integration in the steel sector, all along the value chain from mining
of ore to manufacture of steels and also actively exploring overseas
expansion in steel.
5. Scheme of Amalgamation:
Board of Directors of the Company at their meeting held on 12th
November, 2010 approved the Scheme of amalgamation between (1) M/s
Lakshmi Gayatri Industries Private Limited, (2) M/s Glade Steel Private
Limited, (3) M/s Sri Ganga Steel Enterprises Private Limited and (4)
M/s Topaz Steel India Limited with M/s. Sujana Metal Products Limited
w.e.f: 01.10.2009. The Amalgamation Would result in synergy of
operations and also reduce the overhead and administrative costs
substantially, by combining these units it will meet the competition in
the domestic and international market and also helps to meet the
international standards and it will also reduce the inventory levels
which will result in significant savings in procurement of inventory
and carrying costs of the inventory.
Necessary approvals from the Bombay Stock Exchange Limited (BSE),
National Stock Exchange of India Limited (NSE) and Madras Stock
Exchange Limited (MSE) have been obtained vide their Letter Nos
DCS/AMAL/NTP/24(f)/983/2010-11 dated : 24th December, 2010,
NSE/LIST/153641-Z dated : 14thDecember, 2010 and MSE/LD/ PSK/738/593/10
dated : 16th December, 2010 respectively.
The Company Law Board, Southern Region Bench, Chennai has approved the
shifting of registered office of M/s Sriganga Steel Enterprises Private
Limited(Third Transferor Company) from the state of Tamilnadu to Andhra
Pradesh on 17th February, 2011.
By an order dated : 28.03.2011, the Hon'ble High Court of Andhra
Pradesh , Hyderabad has directed that meetings of the Shareholders and
Secured Creditors of the Company be held at Anjuman Hall, Hotel Taj
Banjara, Road No.1, Banjara Hills, Hyderabad-500034 on Thursday the
28th day of April, 2011 at 2.30 P.M. and 3.30 P.M respectively for the
purpose of considering and approving the proposed scheme of
amalgamation.
On 28.04.2011, Shareholders and Secured creditors of the Company passed
the resolution for approving the Scheme of Amalgamation with requisite
majority. The petition under Section 394 read with Section 391(2) of
the Companies Act, 1956 for sanction of Scheme of amalgamation was
filed with the Hon'ble High Court of Judicature at Andhra Pradesh on
15.06.2011 and admitted on 15.07.2011. As on the date of this report,
the Company has not yet received the order from Hon'ble High Court of
Judicature at Andhra Pradesh.
6. Subsidiaries of the company:
Details of the subsidiaries are given below:
Indian Subsidiaries: (a). Glade Steel Private Limited
M/s Glade Steel Private Limited, Hyderabad, is a subsidiary of the
Company. It is engaged in the business of manufacturing, distributing,
supplying, selling and other wise dispose of Rounds, Flats, Squares,
Angles, Channels, Girders and Allied Products with installed capacity
of 60,000 MT/per annum of re-rolling and 50,000MT/per annum of MS
ingots.
Overseas Subsidiaries;
(a). Alpha Ventures Limited
Alpha Ventures Limited is a Wholly Owned Subsidiary Company
incorporated on 6th March 2007 in Cayman Islands. Alpha Ventures
Limited has been promoted to carry out any object not prohibited by the
Companies Law (2004) Revision, or as the same may be revised from time
to time, or any other law of the Cayman Islands. As per the law
prevailing in Cayman Islands, Financial Statements of M/s Alpha Venture
Limited are not required to be audited.
(b). Asian Tide Enterprises Limited
Asian Tide Enterprises Limited, is a Wholly Owned Subsidiary Company.
It was incorporated on 3rd July 2007 in Hong Kong for carrying on the
business of trading of goods and services with accent on procuring raw
materials (in bulk) for manufacturing activities of the Company
(melting scarp for its rolling division) and sale surplus in the
market.
(c) Optimix Enterprises Ltd
Optimix Enterprises Ltd, is a Wholly Owned Subsidiary of Asian Tide
Enterprises Limited, Hong Kong and step down subsidiary of your
Company. It was incorporated on 22nd August, 2011 in Mauritus for
carrying on the business or businesses which are not prohibited under
the laws for the time being in force in the Republic of Mauritius. This
includes (inter alia) to engage in the business of all forms of
investments including but not limited to venture capital and private
equity investments whether directly, indirectly through any special
purpose vehicles or otherwise. Statement pursuant to Section 212(1)(e)
of the Companies Act,1956 relating to Subsidiary Companies, as at 31st
March, 2012, is also annexed to this report.
7. Consolidated Financial Statements:
Your Company has availed the general exemption from attaching a copy of
the Balance Sheet, Profit and Loss Account, Director's Report and
Auditor's Report of the subsidiary Companies and other documents
required to be attached under Section 212(1) of the Companies Act,
1956, to the Balance Sheet of your Company. The said exemption is
granted vide Circular No. 5/12/2007-CL-III issued by Ministry of
Corporate Affairs dated 08.02.2011.
Accordingly, the said documents of subsidiary Companies are not being
attached with the Balance sheet of the Company. A gist of the financial
performance of the subsidiary Companies is contained in the report. The
annual accounts of the subsidiary Companies are open for inspection by
any member/ investor at the Company's Registered office and the
Company will make available these documents and the related detailed
information upon request by any investor of the Company or any investor
of its subsidiary Companies who may be interested in obtaining the
same. A statement containing brief financial details of the
Company's subsidiaries for the financial year ended March 31, 2012 is
annexed to this Report.
In terms of Clause 32 of the Listing Agreement with the Stock Exchanges
and as prescribed by Accounting Standard 21 notified by the Government
of India under Section 211(3C) of the Companies Act, 1956, the Audited
Consolidated Financial Statements are annexed.
8. Corporate Governance:
Your Company has complied with the requirements of Clause 49 of the
listing agreement regarding Corporate Governance. A detailed report on
Corporate Governance is attached and forms part of this report.
Certificate from the Practicing Company Secretary confirming the
compliance with the conditions of Corporate Governance as stipulated
under Clause 49 of the listing agreement is attached to this report.
9. Management Discussion and Analysis Report:
A separate Management Discussion and Analysis Report is also attached
and forms part of this report.
10. Directors:
In accordance with the provisions of the Companies Act, 1956 and the
Company's Articles of Association, Shri G.Srinivasa Raju and Shri
J.Ramakrishnan, Directors retire by rotation at the forthcoming Annual
General Meeting and being eligible, offers themselves for
re-appointment.
11. Directors' Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating management,
confirm that-
a. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
c. that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act,1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. That they have prepared the annual accounts on a going concern
basis.
12. Disclosures under Section 217(1)(d) of the Companies Act, 1956:
Material changes and commitments which can affect the financial
position of the Company occurred between the end of the financial year
of the Company and date of this report:
S. Change
Particulars
No (Yes/No)
(a) The purchase, sale or destruction of a plant or
the destruction of inventories. No
(b) A material decline in the market value of
inventories or investments No
(c) the expiration of a patent which had given the
Company a virtual monopoly No
in the sale of its principal products.
(d) The settlement of tax liabilities of prior
period and the settlement of any No
legal or other proceedings either
favourably or adversely, if they were
pending at the balance-sheet date.
(e) The institution of importance proceedings
against the company. No
(f) Material change in the capital structure in the
resulting from the issuance, No
retirement or conversion of share capital or stock .
(g) the disposal of a substantial part of the
undertaking or the profits or loss No
whether of a capital or revenue nature.
(h) Alteration in the wage structure arising
out of Union Negotiations. No
(i) Incurring or any reduction of long-term indebtedness. No
(j) Entering into or cancellation of contracts. No
(k) Refund of taxes or completion of assessments No
13. Code of conduct:
The Board has laid down a Code of Conduct for all Board Members and
Senior Management of the Company. The Code of Conduct has been posted
on the Company's website. Board Members and Senior Management
personnel have affirmed compliance with the Code for the financial year
2011-12. A separate declaration to this effect is made out in the
Corporate Governance Report.
14. Statutory Auditors:
The term of office of the Company's existing Statutory Auditors M/s.
Deloitte Haskins & Sells, Chartered Accountants, Hyderabad, will come
to an end at the conclusion of the ensuing Annual General Meeting of
the Company. It is proposed to appoint M/s CRK & Associates, Chartered
Accountants, Hyderabad as Statutory Auditors of the Company for the
financial year 2012-13 at such remuneration as may be fixed by the
Board of Directors.
Your Board of Directors recommended the appointment of M/s CRK &
Associates, Chartered Accountants, Hyderabad, as Statutory Auditors of
your Company. Your approval for such appointment is solicited.
Your Company has received a letter from M/s CRK & Associates, Chartered
Accountants, Hyderabad, to the effect that their appointment as
Statutory Auditors, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956 and they are not
disqualified for such appointment.
15. Cash Flow Analysis:
In conformity with the provisions of Clause 32 of the Listing Agreement
the Cash Flow Statement for the year ended 31st March 2012 is included
in the annual accounts.
16. Personnel:
The relations with employees continued to be cordial throughout the
year. The Board appreciates the willful co-operation and team spirit in
the Management Cadre and other employees of the Company.
Information required to be furnished under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended is annexed to this report.
17. Human Resource Management:
With the size of expansion going in the Company, human resources assume
greater importance and have a significant place in the Organizational
Structure. Your Company has been able to create a favorable work
environment that encourages innovation and meritocracy. Your Company
has put in place a scalable recruitment and human resource management.
The efforts of your Company in the area of employee management and HR
practices have been proved effective in Human Resource Management.
Emphasis is given to the overall development of the personality of
individual employee. Welfare schemes for employees and their families
are run in the factories.
18. Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No:2592/ SASF/CBO and 5938/SASF/CBO dated 28.06.2005
and 29.10.2005 respectively, your Company is required to pay the
dividend of Rs. 14.93 Lakhs (Previous period Rs.25.08 Lakhs) which
represents 1% on 14,93,365 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. 2.48 Lakhs
(Previous period Rs. 4.16 Lakhs).
19. Quality:
Your Company accord to high priority to quality, safety, training,
development, health and environment. The Company endeavours to ensure
continuous compliance and improvements in this regard.
20. Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately covered.
21. Listing of Company's Securities:
Your Company's shares are currently listed on Bombay Stock Exchange
Limited, National Stock Exchange of India Limited and Madras Stock
Exchange Limited and The Global Depository Receipts are currently
listed at the Luxembourg Stock Exchange.
22. Dematerialization of Shares:
Your Company shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSIL).
23. Fixed Deposits:
The Company has not accepted any fixed deposits and the provisions of
Section 58A of the Companies Act, 1956 are not applicable.
24. Cost Auditors:
In pursuance of Section 233B of the Companies Act, 1956 read with
circular no. 52/26/CAB - 2010 the Company has appointed M/s. Nageswara
Rao & Co., Cost Accountants, Secunderabad as the Cost Auditors for
conducting audit of Cost Accounting Records in respect of steel
products manufactured by the Company for the year 2011-12. The approval
of the Central Government for the appointment has been received. The
Company has reappointed them as Cost Auditors for the financial year
2012-13.
Cost accounting records for the year ended 31st March, 2012 were
maintained as per the Companies (Cost Audit Report) Rules, 2011. The
Cost Auditor shall submit the report along with their observations and
suggestions, and Annexure to the Central Government within stipulated
time period.
25. Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The details regarding Energy Conservation, Technology Absorption,
Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of the
particulars in the report of the Board of Directors) Rules, 1988 are
given in the Annexure 1 and forms part of this report.
26. Explanations to qualifications in Auditors' Report:
The Statutory Auditors of the Company M/s Deloitte Haskins & Sells have
made the following comments in their report for the year 2011-12.
Auditors Comments:
1. Paragraph (viii) (b) in Annexure to the Audit Report, details of
undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom
Duty, Excise Duty, Cess and Other material statutory dues which were in
arrears as at March 31, 2012 for a period of more than six months from
the date they became payable are given below:
Year to
Nature of Nature of Amount which the Date of
(Rupees in Due date
Statute Dues amount Payment
relates
Income Tax Income Tax 192.87 2011-2012 June 15,
2011 and Not paid
Act, 1961 September
15, 2011
Company Explanation:
The Company is in the process of amalgamation of the companies i.e. M/s
Lakshmi Gayatri Industries Private Limited, M/s Glade Steel Private
Limited, M/s Sri Ganga Steel Enterprises Private Limited and M/s Topaz
Steel India Limited with Sujana Metal Products Limited w.e.f
1.10.2009.The Scheme under the consideration of the Honorable High
Court of Andhra Pradesh, upon the scheme of amalgamation which is
becoming effective, no liability is arises.
2. Paragraph (viii) (c) in Annexure to the Audit Report , details of
dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty and Cess which have not been deposited as on March 31, 2012
on account of disputes are given below:
Financial
Year Amount
Name of the Statute to which matter (Rupees in
Forum where matter is
pending
pertains Lakhs)
Income Tax
Act, 1961 2008-2009 837.08 Asst. commissioner of
Income Tax
Central
Excise Act, 1995-2009 1209.90 Custom Excise &
Service Tax
1944 1995-1997 1 00 Appellate Tribunal
Commissioner of
Customs (Appeals)
Customs Act, 1962 1998-1999 306.28 Commissioner of
Customs (Sea
2008-2009 214.90 Port)
Custom Excise &
Service Tax
Appellate Tribunal
Foreign Exchange 1995-1996 530.00 Hon'ble High Court
of Delhi
Regulation Act, 1973
APGST Act, 1957 2002-2003 438.13 Sales Tax Appellate
Tribunal
2003-2004 786.88 Commercial Tax Officer
Central Sales
Tax Act, 2005-2008 51.91 Appellate Deputy
Commissioner
1956 2006-2007 241.34 Hon'ble High Court
of Andhra
Pradesh and
Appellate Deputy
Commissioner
Tamilnadu
Value Added 2006-2007 194.92 Hon'ble High Court
of Tamilnadu
Tax Act, 2006
Company Explanation:
As the liabilities are disputed and the matters are pending with the
respective statutory authorities, the Company has not remitted the
same. The Company has taken an opinion from leading tax
practitioners' who are in respective fields and opined that the
Company has a good chance of getting favorable verdict in all these
cases. However, the same were disclosed as contingent liabilities in
the notes on accounts of financial statements.
27. Appreciations:
The Board of Directors of the Company extends their sincere
appreciation to the Government, Bankers, Financial Institutions and
others for their kind support. On behalf of the Company, the Board of
Directors thanks the Employees for their valuable efforts and the
shareholders for their undaunted faith in the Company.
BY ORDER OF THE BOARD
PLACE: Hyderabad R.K.BIRLA S.HANUMANTHA RAO
DATE: 16.07.2012 MANAGING DIRECTOR DIRECTOR (FINANCE)
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting you the Twenty First Annual
Report of your Company together with the Audited Accounts for the
financial period ended 31st March, 2011 comprising 18 months from
01.10.2009 to 31.03.2011.
1. Company's Performance:
Your Directors hereby report that the Company has achieved a turnover
of Rs. 425400.18 lakhs upto 31.03.2011 consisting of Eighteen (18)
Months, as against the turnover of Rs. 192985.70 lakhs during the
previous financial year ended 30.09.2009 consisting of Twelve (12)
months.
The highlights of the financial results are as follows:
(Rs. In Lakhs)
2009-2011 2008-2009
(18 (12
Months) Months)
Operating 32,139.98 14,580.70
Profit before Depreciation & Interest
Interest 19,430.77 8,882.42
Depreciation 7,069.95 2,766.19
Operating Profit 5,639.26 2,932.09
after depreciation and Interest
Other Income 898.65 820.13
Profit before tax 6,537.91 3,752.22
Provision for tax 2,669.22 1,235.40
Profit before extra- 3,868.69 2,516.82
ordinary items
Extra - ordinary 0.00 0.00
items
Profit after extra- 3,868.69 2,516.82
ordinary items
Add:Profit brought 11,497.99 9,526.17
forward
Profit available for 15,366.68 12,042.99
appropriation
2. Review of Operations:
Growth in Revenue and Profit during the period under review. Your
Company recorded a total income of Rs. 426298.83 lakhs (annualised
total income Rs. 284199.22), compared to Rs. 193805.83 lakhs in the
previous financial year, which represents a 119.96% growth (annualised
growth 46.64%). The net profit for the period stands at Rs. 3868.69
lakhs (annualised net profit Rs. 2579.13) as compared to the net profit
of Rs. 2516.82 lakhs in the previous year, which represents a 53.70%
(annualised 2.48%) increase over the previous year
3. Extension of Financial Year of the Company:
The Financial year of your Company extended upto 31.03.2011 consisting
of 18 months from 01.10.2009 to 31.03.2011 vide approval of the
Registrar of Companies, Hyderabad dated: 04.10.2010.
The Company has received the approval for extension of time for the
purpose of holding Annual General Meeting on or before 26.09.2011 vide
approval of the Registrar of Companies, Hyderabad dated: 02.05.2011.
4. Change of Registered office of the Company :
During the financial period 2009-11 the Registered office of the
Company has been shifted from Survey No. 296/7/9, IDA, Bollaram,
Jinnaram Mandal, Medak Dist. to Plot No. 18, Nararjuna Hills,
Panjagutta, Hyderabad - 500 082 vide resolution passed by the members
of the Company through Postal Ballot on 24th December, 2010.
5. Industrial Relations:
Your Directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
6. Further Issue of Securities of the Company:
(a) Allotment of 2,44,62,857 equity shares of Rs. 5/- each of the
Company on preferential basis to Promoters and Non-promoters:
In pursuance of special resolution passed by the members of the Company
at their Extraordinary General Meeting held on 24th October, 2009, to
issue 2,44,62,857 Equity shares of Rs.5/- each at a price determined as
per the provisions of SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2009, of Rs.17.50/- per share to the
Promoters or Promoter Group members and/or non-promoters for meeting
the capital expenditure in respect of expansion programme, general
corporate expenditure and also to part finance the working capital
requirements. The Company allotted 2,44,62,857 equity shares of Rs.5/-
each to the promoters& Non-promoters on 19.11.2009 the proceeds of the
issue have been utilized for the purpose for which they have been
raised.
(b). Allotment of 5,26,31,500 equity shares of Rs. 5/- each at a
premium of Rs. 21.676 per share underlying 52,63,150 Global Depository
Receipts (GDRs) :
Pursuant to the special resolution passed by the members of the Company
at the Extraordinary General Meeting held on 24th October, 2009, your
Company had successfully completed the issue and allotment of
5,26,31,500 equity shares of Rs. 5/- each at a premium of Rs. 21.676
per share underlying 52,63,150 Global Depository Receipts (GDRs)
representing 10 equity shares per GDR, aggregating US$ 30.00 Millions.
Your Company invested the funds raised through GDRs, in it's Wholly
Owned Subsidiaries. The Global Depository Receipts have been listed on
the Luxembourg Stock Exchange.
(c). Allotment of 5,00,00,000 convertible warrants of Rs. 5/- each at a
price of Rs. 21/- per warrant on preferential basis to the Promoters
and Promoters Group:
In pursuance of special resolution passed by the members of the Company
through Postal Ballot on 24.12.2009, to issue 5,00,00,000 convertible
warrants of Rs.5/- each at a price determined as per the provisions of
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009,
of Rs.21/- per share to the Promoters and Promoter Group for meeting
the capital expenditure in respect of expansion programme, general
corporate expenditure, to part finance the working capital requirements
and also to part finance acquisition of steel units. The Company
allotted 5,00,00,000 Convertible Warrants to the promoters & promoters
group on 04.01.2010. These warrants are compulsorily convertible into
equity shares within a period of eighteen months from the date of
allotment i.e., 04.01.2010. As on the date of this report, there are
no outstanding warrants for conversion. The proceeds of the issue have
been utilized for the purpose for which they have been raised.
7. Scheme of Amalgamation
Board of Directors of the Company at their meeting held on 12th
November, 2010 approved the Scheme of amalgamation between (1) M/s
Lakshmi Gayatri Industries Private Limited, (2) M/s Glade Steel Private
Limited, (3) M/s Sri Ganga Steel Enterprises Private Limited and (4)
M/s Topaz Steel India Limited with M/s Sujana Metal Products Limited
w.e.f: 01.10.2009. The Amalgamation would result in synergy of
operations and also reduce the overhead and administrative costs
substantially, by combining these units it will meet the competition in
the domestic and international market and also helps to meet the
international standards and it will also reduce the inventory levels
which will result in significant savings in procurement of inventory
and carrying costs of the inventory.
Necessary approvals from the Bombay Stock Exchange Limited (BSE),
National Stock Exchange of India Limited (NSE) and Madras Stock
Exchange Limited (MSE) have been obtained vide their letter nos.
DCS/AMAL/NTP24(f)/983/2010-11 dated : 24th December, 2011,
NSE/LIST/153641-Z dated : 14th December, 2010 and MSE/LD/
PSK/738/593/10 dated : 16th December, 2010 respectievely.
The Company Law Board Southern Region Bench, Chennai has approved the
shifting of Registered office of M/s. Sri Ganga Steel Enterprises
Private Limited (Third transferor Company) from the state of Tamilnadu
to Andhra Pradesh on 17th February 2011.
By an order dated: 28.03.2011, the Hon'ble High Court of Andhra Pradesh
Hyderabad directed that meetings of the Shareholders and Secured
Creditors of the Company be held at Anjuman Hall, Hotel Taj Banjara,
Road No.1, Banjara Hills, Hyderabad-500034. on Thursday the 28th day of
April, 2011 at 2.30 P.M. and 3.30 P.M respectively for the purpose of
considering and approving the proposed scheme of amalgamation.
On 28.04.2011, Shareholders and Secured creditors of the Company passed
a resolution for approving the Scheme of Amalgamation with requisite
majority. The petition under Section 394 read with Section 391(2) of
the Companies Act, 1956 for sanction of Scheme of amalgamation was
filed with the Hon'ble High Court of Judicature at Andhra Pradesh on
15.06.2011 and admitted on 15.07.2011. As on the date of this report,
the Company has not yet received the order from Hon'ble High Court of
Judicature at Andhra Pradesh.
8. Subsidiaries of The Company
As on 31.03.2011, the Company had the following Subsidiaries:
(a) Glade Steel Private Limited
During the Financial year 2007-08, your Company has acquired 100% share
holding of M/s. Glade Steel Private Limited by making investment of Rs.
6,74,514.00 as on the date of this report your Company holding 51.15%
share holding in M/s. Glade Steel Private Limited. M/s. Glade Steel
Private Limited, incorporated on 12th May 2005 for carrying on the
business of manufacture, distribute, supply, sell and other wise
dispose of Rounds, Flats, Squares, Angles, Channels,Grinders and Allied
Products with installed capacity of 60,000 MT/per annum of re- rolling
and 50,000MT/per annum of MS ingots.
(b) Alpha Ventures Limited
Alpha Ventures Limited, is a wholly owned subsidiary company
incorporated on 6 March 2007 in Cayman Islands. Alpha Ventures Limited
has been promoted to carry out any object not prohibited by the
Companies Law (2004) Revision, or as the same may be revised from time
to time, or any other law of the Cayman Islands. As per the law
prevailing in Cayman Islands, Financial Statements of M/s Alpha Venture
Limited are not required to be audited.
(c ) Asian Tide Enterprises Limted
Asian Tide Enterprises Limted, is a wholly owned subsidiary company
incorporated on 3rd July 2007 in Hong Kong for carrying on the business
trading of goods and services with accent on procuring raw materials
(in bulk) for manufacturing activities of the Company (melting scrap
for its rolling division) and sale surplus in the market.
The aforesaid subsidiary incorporated a wholly owned subsidiary Company
named M/s Optimix Enterprises Ltd. at Mauritius on 22.08.2011 which
will be the stepdown subsidiary for Sujana Metal Products Ltd.
Statement pursuant to Section 212(1)(e) of the Companies Act,1956
relating to Subsidiary Companies, As at 31st March,2011, is also
annexed to this report.
9. Consolidated Financial Statements:
Your Company has availed the general exemption from attaching a copy of
the Balance Sheet, Profit and Loss Account, Directors' Report and
Auditor's Report of the subsidiary Companies and other documents
required to be attached under Section 212(1) of the Companies Act,
1956, to the Balance Sheet of your Company. The said exemption is
granted vide Circular No. 5/12/2007-CL-III issued by Ministry of
Corporate Affairs dated 08.02.2011.
Accordingly, the said documents of subsidiary Companies are not being
attached with the Balance sheet of the Company. A gist of the financial
performance of the subsidiary Companies is contained in the report. The
annual accounts of the subsidiary Companies are open for inspection by
any member/ investor at the Company's Registered office and the Company
will make available these documents and the related detailed
information upon request by any investor of the Company or any investor
of its subsidiary Companies who may be interested in obtaining the
same. A statement containing brief financial details of the Company's
subsidiaries for the financial year ended March 31, 2011 is annexed to
this Report.
In terms of Clause 32 of the Listing Agreement with the Stock Exchanges
and as prescribed by Accounting Standard 21 notified by the Government
of India under Section 211(3C) of the Companies Act, 1956, the Audited
Consolidated Financial Statements are annexed.
10. Postal Ballot:
During the period 2009-11, the Company conducted two postal ballot
exercises to obtain members approval for, inter alia:
- Issue of convertible warrants on preferential basis to promoters and
promoter group.
- Increasing the borrowing powers of the Company.
- To increase the limit of making loan, investment, security, guarantee
under Section 372A of the Companies Act, 1956.
- Shifting the registered office of the Company from Survey No:296/7/9,
IDA Bollaram, Jinnaram Mandal, Medak District to Plot No:18, Nagarjuna
Hills, Panjagutta, Hyderabad-500082.
- Issue of equity shares and/or any securities linked to, convertible
into or exchangeable for equity shares including without limitations
through Global Depository Receipts (GDR)/ Foreign Currency Convertible
Bonds (FCCBs)/ Foreign Currency Exchangeable Bonds(FCEB)/American
Depository Receipts (ADR), Qualified Institutional Placements (QIP)
The complete details of postal ballot exercises are provided in the
Corporate Governance Report attached and forming part of this report.
11. Corporate Governance:
Your Company's Report on Corporate Governance is attached and forms
part of this report. Certificate from the Practicing Company Secretary
confirming the compliance with the conditions of Corporate Governance
as stipulated under Clause 49 of the listing agreement is attached to
this report.
12. Management Discussion and Analysis Report:
A separate Management Discussion and Analysis Report is also attached
and forms part of this report.
13. Directors:
In accordance with the provisions of the Companies Act, 1956 and the
Company's Artciles of Association, Shri Y.S. Chowdary and
Dr.V.Malakonda Reddy, Directors retire by rotation at the forthcoming
Annual General Meeting and being eligible, offer themselves for
re-appointment.
Further, Shri S.Hanumantha Rao, whose term as Executive Director
expires on 30.09.2010, was re-appointed as Director (Finance) of the
Company with effect from 13th August, 2010 for a period of 5 years at
the Board Meeting held on 13th August, 2010 subject to the approval of
the members. Separate resolution has been put up for consideration by
the members.
14. Directors' Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating management,
confirm that- a. in the preparation of the annual accounts, the
applicable accounting standards have been followed and that no material
departures have been made from the same;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
c. that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. That they have prepared the annual accounts on a going concern
basis.
15. Disclosures under Section 217(1)(d) of the Companies Act, 1956:
Material changes and commitments which can affect the financial
position of the Company occurred between the end of the financial year
of the Company and date of this report :
Change
S.
No. Particulars
(Yes/No)
(a) The purchase, sale or destruction of a plant or the
destruction of No
inventories.
(b) A material decline in the market value of inventories or
investments No
(c) the expiration of a patent which had given the Company a
virtual monopoly No
in the sale of its principal products.
(d) The settlement of tax liabilities of prior period and the
settlement of any No
legal or other proceedings either favourably or
adversely, if they were pending at the balance-sheet date.
(e) The institution of importance proceedings against the
Company. No
(f) Material change in the capital structure in the resulting
from the issuance, No
retirement or conversion of share capital or stock .
(g) the disposal of a substantial part of the undertaking or
the profits or loss No
whether of a capital or revenue nature.
(h) Alteration in the wage structure arising out of Union
Negotiations. No
(i) Incurring or any reduction of long-term indebtedness. No
(j) Entering into or cancellation of contracts and. No
(k) Refund of taxes or completion of assessments Yes
16. Code of conduct
The Board has laid down a Code of Conduct for all Board Members and
Senior Management of the Company. The Code of Conduct has been posted
on the Company's website. Board Members and Senior Management personnel
have affirmed compliance with the Code for the financial period
2009-11. A separate declaration to this effect is made out in the
Corporate Governance Report.
17. Promoter Group Companies:
Pursuant to intimation from promoters, names of Promoters and Companies
comprising the "Group" as defined in the Monopolies and Restrictive
Trade Practices ("MRTP") Act, 1969, have been disclosed on page No. 37
in the Annual Report of the Company.
18. Statutory Auditors:
Your Company's Statutory Auditors M/s. Deloitte Haskins & Sells,
Chartered Accountants, Hyderabad, who retire at the ensuing Annual
General Meeting of your Company, being eligible, offer themselves for
reappointment.
Your Board of Directors recommended the appointment of M/s. Deloitte
Haskins & Sell, Chartered Accountants, Hyderabad, as Statutory Auditors
of your Company. Your approval for such appointment is solicited.
Your Company has received a letter from M/s. Deloitte Haskins & Sells,
Chartered Accountants, Hyderabad, to the effect that their appointment
as Statutory Auditors, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956 and they are not
disqualified for such appointment.
19. Cash Flow Analysis
In conformity with the provisions of clause 32 of the listing
agreement, the cash flow statement for the period ended 31st March,
2011 is included in the annual account.
20. Personnel
The relations with employees continued to be cordial throughout the
year. The Board appreciates the willing co-operation and team spirit
displayed by the Management Cadre and other employees of the Company.
Information required to be furnished under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended is annexed to this report.
21. Human Resource Management:
With the size of expansion going in the Company, human resources assume
greater importance and have a significant place in the Organizational
Structure. Your Company has been able to create a favorable work
environment that encourages innovation and merit. Your Company has put
in place a scalable recruitment and human resource management. The
efforts of your Company in the area of employee management and HR
practices have proved effective in Human Resource Management. Emphasis
is given to the overall development of the personality of individual
employee. Welfare schemes are run in the factories. for employees and
their families.
22. Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No:2592/SASF/CBO and 5938/SASF/ CBO dated 28.06.2005
and 29.10.2005 respectively, your Company is required to pay the
dividend of Rs. 25.08 Lakhs (Previous year Rs.35.32 Lakhs) which
represents 1% on 3531625 (on 19.11.2009, 20,38,260 CRPS which was
issued in the name of Stressed Assets Stabilization Fund(SASF), Mumbai
redeemed as the terms and conditions as mentioned in the letters No:
SASF/ Sujana Metal/No:706 dated:25.06.2008 and SASF/SMPL(Sujana)/
No.2(2008-09) dated:06.12.2008 issued by Stressed Assets Stabilisation
Fund have been fulfilled with the issue and allotment of 1,27,48,571
equity shares of Rs.5/- each to SASF) Cumulative Redeemable Preference
Shares(CRPS) of Rs.100/- each to the holders of Cumulative Redeemable
Preference Shares for the period under review, Further your Company
also provided a provision of dividend tax to the extent of Rs.4.16
Lakhs (Previous year Rs.6.00 Lakhs)
23. Quality and Safety:
Your Company accords high priority to quality, safety, training,
development, health and environment. The Company endeavours to ensure
continuous compliance and improvements in this regard.
24. Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately the covered.
25. Listing of Company's Securities:
Your Company's shares are currently listed on Bombay Stock Exchange
Limited, National Stock Exchange of India Limited and Madras Stock
Exchange Limited and The Global Depository Receipts are currently
listed at the Luxembourg Stock Exchange.
26. Dematerialization of Shares:
Your Company shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSIL).
27. Fixed Deposits:
Your Company has not accepted any fixed deposits and the provisions of
Section 58A of the Companies Act, 1956 are not applicable.
28. Cost Auditors:
In terms of the directives of Ministry of Corporate Affairs under
Section 233B of the Companies Act, 1956 vide its General Circular
No:15/2011 and circular F.No:52/26/CAB-2010 on 11.04.2011 and
03.05.2011 respectively, the Company has appointed the qualified Cost
Accountant for conducting audit of Cost Accounting Records in respect
of steel products manufactured by the Company for the year 2011-12.
29. Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The details regarding Energy Conservation, Technology Absorption,
Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of the
particulars in the report of the Board of Directors) Rules, 1988 are
given in the Annexure 1 and forms part of this report.
30. Explanations for the qualifications in Auditors' Report:
The Statutory Auditors of the Company M/s Deloitte Haskins & Sells have
made the following comments in their report for the period 2009-11.
Auditor's Comments:
1. Paragraph (viii) (b) in Annexure to the Audit Report, details of
undisputed amounts payable in respect of Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
Other material statutory dues which were in arrears as at March 31,
2011 for a period of more than six months from the date they became
payable are given below:
Amount Year to which
Nature of Nature of Date of
(Rupees
in the amount Due date
Statute Dues Payment
Lakhs) relates
Income Tax Income Tax 462.32 2010-2011 June 15, 2010
and Not paid
Act, 1961 2.74 2001-2002 September 15,
2010
4.20 2002-2003 June, September,
December and
March of each
year / period
Income Tax Fringe 7.56 2006-2007 January 23,2010 Not Paid
Act, 1961 Benefit Tax 8.51 2007-2008 February 24,2010
Wealth Tax Wealth Tax 0.88 2008-2009 September 30,
2009 Not paid
Act,1957 1.08 2009-2010 September 30,
2010
Company Explanation:
The Company is in the process of amalgamation of the companies i.e. M/s
Lakshmi Gayatri Industries Private Limited, M/s Glade Steel Private
Limited, M/s Sri Ganga Steel Enterprises Private Limited and M/s Topaz
Steel India Limited with Sujana Metal Products Limited w.e.f
1.10.2009.The Scheme under the consideration of the Honorable High
Court of Andhra Pradesh, upon the scheme of amalgamation which is
becoming effective, no liability is arises.
2. Paragraph (viii) (c) in Annexure to the Audit Report , details of
dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty and Cess which have not been deposited as on March 31, 2011
on account of disputes are given below:
Financial
Year Amount
Name of the Statute to which
matter (Rupees in Forum where matter is
pending
pertains Lakhs)
Central Excise
Act, 1944 1995-2009 1,384.30 Custom Excise & Service
Tax
1995-1997 1.00 Appellate Tribunal
Commissioner
of Customs (Appeals)
Customs Act, 1962 1998-1999 302.69 Commissioner of Customs
(Sea
2008-2009 214.90 Port)
Custom Excise & Service Tax
Appellate Tribunal
Foreign Exchange
Regulation 1995-1996 530.00 Hon'ble High Court of Delhi
Act, 1973
APGST Act, 1957 2002-2003 488.13 Sales Tax Appellate
Tribunal
2003-2004 786.88 Appellate Deputy
Commissioner
Central Sales Tax
Act, 1956 2002-2003 2,213.11 Commercial Tax Officer
2004-2005 13.38 Sales Tax Appellate
Tribunal
2005-2008 58.58 Appellate Deputy
Commissioner
2006-2007 241.34 Hon'ble High Court of
Andhra Pradesh and
Appellate Deputy
Commissioner
Tamilnadu Value
Added Tax 2006-2007 194.92 Hon'ble High Court of
Tamilnadu
Act, 2006
Company Explanation:
As the liabilities are disputed and the matters are pending with the
respective statutory bodies, the Company has not remitted the same. The
Company has taken opinion from leading tax practitioners' in respective
fields, who opined that the Company has a good chance of getting
verdict its favour in all these cases. However, the same were disclosed
as contingent liabilities in the notes on accounts.
31. Appreciations:
The Board of Directors of the Company extend their sincere appreciation
to the Government, Bankers, Financial Institutions and others for their
kind support. On behalf of the Company, the Board of Directors thank
the Employees for their valuable efforts and the shareholders for their
valued trust in the Company.
By order of the Board
R.K. Birla S. Hanumantha Rao
Managing Director Director (Finance)
Place: Hyderabad
Date: 29.08.2011
Sep 30, 2009
The Directors have pleasure in presenting you the Twentieth Annual
Report of your Company together with the Audited Accounts for the
Financial Year ended 30th September, 2009 comprising of 12 months from
01.10.2008 to 30.09.2009.
Companys Performance:
Your Directors hereby report that the Company has achieved a turnover
of Rs. 192985.69 lakhs upto 30.09.2009 consisting of twelve (12)
months, as against the turnover of Rs.189214.80 lakhs during the
previous financial year ended 30.09.2008 consisting of fifteen (15)
months.
The highlights of the financial results are as follows:
(Rupees in Lakhs)
2008-2009 2007-2008
(12 Months) (15 Months)
Operating Profit before 14580.67 11896.95
Depreciation & Interest
Interest 8882.41 4561.54
Depreciation 2766.19 2202.82
Operating Profit after
depreciation and Interest 2932.07 5132.59
Other Income 820.13 348.44
Profit before tax 3752.20 5481.03
Provision for tax 1235.40 2399.22
Profit before extra-ordinary 2516.80 3081.81
items
Extra-ordinary items -- 740.71
Profit after extra-ordinary 2516.80 3822.52
items
Add: Profit brought forward 9526.17 6259.85
Profit available for 12042.97 10082.37
appropriation
Review of Operations:
Growth in Revenue and Profit During the year under review, your Company
recorded a total income of Rs. 193805.82 lakhs, compared to Rs.
189563.24 lakhs in the previous financial year, which represents a
2.24% growth. The net profit for the year stands at Rs. 2516.80 lakhs
as compared to the net profit of Rs. 3822.52 lakhs (annualized Rs.
3058.02 lakhs) in the previous year, which represents a 21.50% decrease
(annualized) over the previous year, due to 100% depreciation provided
on moulds.
Industrial Relations:
Your directors are happy to report that the Industrial Relations have
been extremely cordial at all levels throughout the year.
Allotment of 6,05,00,000 convertible warrants of Rs. 5/- each at a
price of Rs. 36/- per warrant to the promoters and promoters group:
In pursuance of special resolution passed by the members of the Company
at their 18th Annual General Meeting held on 31.12.2007, to issue
6,05,00,000 convertible warrants of Rs. 5/- each at a price determined
as per the provisions of SEBI (Disclosure and Investor Protection)
Guidelines 2000, of Rs.36/- per share to the Promoters and Promoter
Group, the Company allotted 6,05,00,000 Convertible Warrants to the
promoters & promoters group on 28.01.2008. These warrants are
compulsorily convertible into equity shares within a period of eighteen
months from the date of allotment i.e., 28.01.2008.
During the previous year 32,00,000 warrants out of 6,05,00,000 warrants
had been converted into 32,00,000 equity shares of Rs. SI- each of the
Company and subsequently listed in BSE.
During the year under review 60,00,000 warrants out of 6,05,00,000
warrants had been converted into 60,00,000 equity shares of Rs. 5/-
each of the Company and subsequently listed in BSE.
5,13,00,000 convertible warrants out of 6,05,00,000 convertible
warrants issued to the Promoter Group on 28.01.2008 through
preferential allotment at a price of Rs.36/- per warrant including a
premium of Rs.31/- per warrant have lapsed since the respective
allottees had informed the Company that they would not be exercise the
option of converting the outstanding warrants into equity shares.
The proceeds of the issue have been utilized for the purpose for which
they have been raised.
Subsidiaries of the Company
Your Company formed the following Wholly Owned Subsidiaries:
(a) Glade Steel Private Limited
Glade Steel Private Limited, incorporated on 12th May 2005, is having
its registered office at 18, Nagarjuna Hills, Punjagutta, Hyderabad.
Glade has been promoted with an object to purchase or other wise
acquire,manufacture, distribute, supply, sell and other wise dispose of
Rounds, Flats, Squares, Angles, Channels,Grinders and Allied Products
with installed capacity of 60,000 MT/per annum of re-rolling and
50,000MT/per annum of MS ingots.
Audited financial statements, Directors Report and Auditors Report of
M/s Glade Steel Private Limited for the financial year ended 31.3.2009
pursuant to Section 212(1) are given from Page No. 63 to 77 and forming
part of this report.
(b) Alpha Ventures Limited
Alpha Ventures Limited, incorporated on 6th March 2007, is having its
registered office at PO Box 309GT, Ugland House, South Church Street,
George Town, Grand Cayman, Cayman Islands. The Company has been
promoted to carry out any object not prohibited by the Companies Law
(2004) Revision, or as the same may be revised from time to time, or
any other law of the Cayman Islands.
As per the law prevailing in Cayman Islands, Financial Statements of
M/s Alpha Venture Limited are not required to be audited.
However, the Audit of the financials is conducted by M/s. T.
Raghavendra & Associates, Chartered Accountants, Hyderabad, for the
purpose of consolidation and the Audited accounts, Directors report,
Auditors report and other related information of M/s Alpha Venture
Limited for the financial year ended: 30.09.2009 pursuant to Section
212(1) are given from Page No. 78 to 88 and forming part of this
report.
(c ) Asian Tide Enterprises Limted
Asian Tide Enterprises Limted, incorporated on 3rd July 2007, is having
its registered office at Suite 1402,1 Duddell Street, Central, Hong
Kong. Asian has been promoted with an object to trade goods.
Your Companys Financial year is not coinciding with the Financial Year
of M/s. Asian Tide Enterprises Limited.
Audited financial statements, Directors Report and Auditors Report of
M/s. Asian Tide Enterprises Limited for the financial year ended
31.03.2009 pursuant to Section 212(1) are not provided here since the
Company has not carried on any business during the year.
Statement pursuant to Section 212(1)(e) of the Companies Act, 1956
relating to Subsidiary Companies, As at 30th September, 2009, is given
as Annexure -1 on Page No. 12.
Consolidated Financial Statements:
The Consolidated financial statements of the Company and its
subsidiaries, prepared and presented in accordance with Accounting
Standard (AS-21) and pursuant to Clause 32 of the Listing agreement,
consisting of the annual audited accounts of your Company for the year
ended 30th September 2009 and audited/un- audited financial statements
of the respective subsidiary companies as mentioned above have been
annexed to the Annual Report.
Corporate Governance:
A report on Corporate Governance along with Practicing Company
Secretary certificate on compliance with the conditions of Corporate
Governance as stipulated in Clause 49 of the listing agreement, is
provided separately in the Annual Report and forming part of this
Annual Report.
Management Discussion and Analysis Report:
Management Discussion and Analysis Report is provided separately in the
Annual Report and forming part of this Annual Report.
Directors:
Shri G. Srinivasa Raju and Dr.K.Srinivasa Rao, Directors of the
Company, are liable to retire by rotation in the forthcoming Annual
General Meeting of the Members of the Company and being eligible offers
themselves for reappointment.
Shri K. Kameswara Rao, Director of the Company had resigned from the
Board of Directors of the Company w.e.f. 01.09.2009.
Directors Responsibility Statement:
Pursuant to Section 217{2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating management,
confirm that-
a. in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
c. that they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. That they have prepared the annual accounts on a going concern
basis.
Code of conduct
The Board has laid down a Code of Conduct for all Board Members and
Senior Management of the Company. The Code of Conduct has been posted
on the Companys website. Board Members and Senior Management personnel
have affirmed compliance with the Code for the financial year 2008-09.
A separate declaration to this effect is made out in the Corporate
Governance Report.
Promoter Group Companies:
Pursuant to intimation from promoters, names of Promoters and Companies
comprising the "Group" as defined in the Monopolies and Restrictive
Trade Practices ("MRTP") Act, 1969, have been disclosed on Page No. 20
in the Annual Report of the Company.
Statutory Auditors:
The Companys Statutory Auditors M/s. Deloitte Haskins & Sells,
Chartered Accountants, Hyderabad, who retire at the ensuing Annual
General Meeting of your Company, being eligible offers themselves for
reappointment.
Your Board of Directors recommended the re- appointment of M/s.
Deloitte Haskins & Sells, Chartered Accountants, Hyderabad, as
Statutory Auditors of your Company. Your approval for such appointment
is solicited.
The Company has received a letter from M/s. Deloitte Haskins & Sells,
Chartered Acountants, Hyderabad, to the effect that their appointment
as Statutory Auditors, if made, would be within the prescribed limits
under Section 224(1 B) of the Companies Act, 1956 and they are not
disqualified for such appointment.
Personnel
The relations with employees continued to be cordial through out the
year. The Board appreciates the willful co-operation and team spirit in
the Management Cadre and other employees of the Company.
Information required to be furnished under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 given as Annexure - 2 to this report.
Human Resource Management:
With the size of expansion going in the Company, human resources assume
greater importance and have a significant place in the Organizational
Structure. Your Company has been able to create a favorable work
environment that encourages innovation and meritocracy. Your Company
has put in place a scalable recruitment and human resource management.
The efforts of your Company in the area of employee management and HR
practices have been proved effective in Human Resource Management.
Emphasis is given to the overall development of the personality of
individual employee. Welfare schemes for employees and their families
are run in the factories.
Dividend:
As per the terms of issue of Cumulative Redeemable Preference Shares
(CRPS) vide letter No. 2592/SASF/CBO and 5938/SASF/ CBO dated
28.06.2005 and 29.10.2005 respectievely, your Company is required to
pay the dividend of Rs. 35,31,625 (Previous year Rs.44,14,531 consists
of 15 months period) which represents 1 % on 35,31,625 Cumulative
Redeemable Preference Shares 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.6,00,200 (Previous year Rs. 8,38,192 consists of 15 months
period)
Quality:
High quality standards are maintained in all areas and review of the
same is also made constantly in view of the rapid changes that are
taking place in the global markets
Insurance:
All the properties and insurable assets of the Company, including
Building, Plant and Machinery, stocks etc., wherever necessary and to
the extent required, have been adequately the covered.
Listing of Companys Securities:
Your Companys shares are currently listed on Bombay and Madras Stock
Exchanges and The
Global Depository Receipts are currently listed at the Luxumberg Stock
Exchange.
The Company also made an application with National Stock Exchange of
India Limited (NSE) Mumbai for listing of its equity shares and the
same is under consideration of NSE.
Dematerialization of Shares:
Your Company shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSIL).
Fixed Deposits:
The Company has not accepted any fixed deposits and the provisions of
Section 58A of the Companies Act, 1956 are not applicable.
Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The details regarding Energy Conservation, Technology Absorption,
Foreign Exchange Earnings and Outgo as required by Section 217(1 )(e)
of the Companies Act, 1956 read with the Companies (Disclosure of the
particulars in the report of the Board of Directors) Rules, 1988 are
given in the Annexure 3 and forming part of this report.
Explanations to the qualifications in Auditors Report:
The Statutory Auditors of the Company M/s Deloitte Haskins & Sells have
made the following comments in their report for the year 2008-09.
1. Auditors Comments:
Paragraph (iv) in Annexure to the Audit Report, "there are adequate
internal control systems commensurate with the size of the Company and
the nature of its business for the purchase of inventory and fixed
assets and for the sale of goods and services except that such systems
need to be strengthened in respect of certain locations of the company
in order to make it commensurate with the size and nature of its
business. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal
controls systems".
Company Explanation:
The Company is in regular touch with the Statutory Auditors and the
Internal Auditors to improve Internal Control Systems, and procedures
commensurate with the increased level of operations. The Company has
identified bench mark procedures and systems in the industry and the
same are being implemented in all the locations of the Company in order
to strengthen the systems and procedures. The Company has identified a
proven system of Fixed Assets software which is expected to be
implemented in due course. The Company is also in the process of
implementation of an ERP system in all units, with Chennai unit as
pilot plant which will be carried to other units once it stabilizes in
the first location. The Company has also initiated many steps to
strengthen the internal controls in the areas of inventory and fixed
assets.
2. Auditors Comments:
Paragraph (ix) (a) in Annexure to the Audit Report, "Except for delays
in deposit of provident fund dues, employee state insurance dues, taxes
deducted at source, advance payment of income taxes and wealth tax, the
Company has been regular in depositing undisputed statutory dues
including investor education and protection fund, custom duty, excise
duty, cess, sales tax, service tax and any other material statutory
dues applicable to it with the appropriate authorities during the
year".
Company Explanation:
The delay in payment of statutory dues are limited to one location and
the delay is due to non remittance on due dates on some occasions.
However, the Company has cleared all the statutory dues in time with
necessary late payment fees and the company has taken appropriate steps
to avoid delay in future.
3. Auditors Comments:
Paragraph (ix) (b) in Annexure to the Audit Report "details of
undisputed amounts payable in respect of provident fund, investor
education and protection fund, income tax, sales tax, wealth tax,
service tax, custom duty, excise duty and any other material statutory
dues which were in arrears as at September 30, 2009 for a year of more
than six months from the date they became payable are given below".
Nature Nature of Amount Year to Due Date of
of Dues (Rupees) which the date Payment
Statute amount
relates
Income Income 112,502,016 1999-2009 July, Not
Tax Act, Tax and September, Paid
1961 Fringe December
Benefit Tax and March
of each
year/period.
Company Explanation:
The Company is in the process of reconciling the differences in the
amounts payable to the Income Tax Department in the previous years. In
the process of reconciliation the company has claimed an amount Rs.
42,685,445 as refund relating to earlier Assessment years and has
requested the IT dept. to adjust the same towards various demands from
the Income Tax Department for the Assessment years 1999- 00 to 2008-09.
The Department adjusted an amount of Rs. 33,007,404. Further the
company has made payment of Rs. 43,405,064 subsequent to the Balance
sheet date. Hence as on date the existing liability is amounting to Rs.
36,089,548. The company will be remitting the amount to the IT dept.
once the final reconciliation with them is completed..
4. Auditors Comments:
Paragraph (ix) (c) in Annexure to the Audit Report "details of dues of
sales tax, income tax, custom duty, wealth tax, service tax, excise
duty and cess which have not been deposited as on September 30, 2009 on
account of any dispute are given below"
Name of Financial Amount Forum where
the Statute Year to (Rupees) matter is
which matter pending
pertains
Central 1995-2009 37,045,115 Custom Excise &
Excise Act, Service Tax
1944 Appellate Tribunal
1993-2009 23,889,623 Commissioner of
Customs and Central
Excise
Customs 1998-1999 28,928,336 Commissioner of
Act, 1962 Customs (Sea Port)
Foreign 1995-1996 37,500,000 Honble High
Exchange Court of Delhi
Regulation
Act, 1973
APGST 2002-2005 164,087,562 Honble High Court
Act, 1957 of Andhra Pradesh
2003-2004 78,688,077 Appellate Oeputy
Commissioner
AP Value 2005-2008 686,274,557 Honble High Court
Added of Andhra Pradesh
Tax Act,
2005
Central 2002-2003 221,311,181 Commercial Tax
Sales Tax Officer
Act, 1956
2002-2006 1,337,612 Appellate Deputy
Commissioner
Tamilnadu 2006-2007 19,491,531 Honble High
Value Court of Tamilnadu
Added Tax
Act, 2006
Income 1996-1998 26,701,045 Commissioner of
Tax Act, Income Tax
1961 (Appeals)
Company Explanation:
As the liabilities are disputed and the matters are pending with the
respective statutory bodies, the company has not remitted the same. The
company has taken opinion from leading tax practitioners in respective
fields, who opined that the Company has a good chance of getting
verdict its favour in all these cases. In respect of disputes under
APGST Act and AP Value Added Tax Act, the Honorable High Court of AP
has since (subsequent to the balance sheet date) set aside all these
demands. The company has obtained legal opinion on the orders of
Honorable Court who stated conclusively that no liability exists under
these demands as on date. However, the same were disclosed as
contingent liabilities in the notes on accounts, as the judgments were
delivered after the balance sheet date..
5. Auditors Comments:
Paragraph (xi) in Annexure to the Audit Report "there have been delays
in repayment of dues
to a bank and financial institution. Such delays have been summarized
below indicating the maximum amount of delay and the maximum period,
with the year end corresponding amount reflected against each".
Lender Maximum Maximum Remarks
amount of period of
Default Default
(Rs.) (Days)
IDBI Bank Ltd.
Principal 13,532,074 86 --
Interest 14,584,532 32
Stressed
Assets As per agreement,
Stabilization 16,62,857 Equity
Fund(SASF) Shares of Rs.5 at
Principal 17,719,750 121 Premium of Rs.12.50
were allotted to SASF
Interest 14,331,095 456 on November 19,2009
Company Explanation:
The Company is regular in payment of interest and installments except
in a few occasions. The delay is ranging from 32 days to maximum of 86
days and subsequently the company has paid all dues as on balance sheet
date. In case of liability to SASF, SASF had approved discharge of the
interest liability by issuance of equity, which was delayed due to
delay in receiving the regulatory approvals like approval by the
General Body and in principle listing approval of BSE. The company has,
subsequent to the balance sheet date, entered into an agreement with
SASF for settling the entire loan amount partly in cash and balance by
issuing equity. As this proposal was under the consideration of SASF,
the amounts as per earlier repayment schedule was not paid.
Appreciations:
The Board of Directors of the Company extends their sincere
appreciation to the Government, Bankers, Financial Institutions and
others for their kind support. On behalf of the Company, the Board of
Directors thanks the Employees for their valuable efforts and the
shareholders for their undaunted faith in the Company.
BY ORDER OF THE BOARD
PLACE: Chennai Y.S.CHOWDARY
DATE: 03.03.2010 CHAIRMAN
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article