BSE: 507753 | NSE: SREERAYALK | ISIN: INE284B01028
Market Cap: [Rs.Cr.] 90.21 | Face Value: [Rs.] 10
Industry: Chlor Alkali / Soda Ash
Your Directors' have pleasure in presenting the Annual Report and the Auditedstatements of Accounts of the Company for the year ended 31st March, 2014.
The turnover for the year under review is Rs.85095 lakhs as compared to Rs.90941 lakhsin the previous year. The decrease is on account of prolonged disturbances in the Stateand severe power cuts in the first quarter.
Division / Segment Wise Operations :
The Caustic unit has produced 136882 MTs of Caustic Soda as against 130773 MTs for theprevious year. As against net sales of Rs.41465 lakhs for previous year, the current yearsales comes to Rs.42635 lakhs representing an increase of 3 %.
The Potassium plant has produced 12483 MTs of Potassium Hydroxide as against 8947 MTsfor the previous year. As against net sales of Rs.6540 lakhs for previous year, thecurrent sales comes to Rs.9297 lakhs representing an increase of 42% attributed to betterrealizations. The Castor Oil Plant has processed 12526 MTs of oil as against 14864 MTs forthe previous year. As against net sales of Rs.13951 lacs for the previous year, thecurrent year sales stood at Rs. 12490 lacs representing a decrease of 10 %.
The Fatty acid plant has processed 13711 MTs for the current year as against 23673 MTsfor the previous year. The net sales of this division has decreased from Rs.16559 lakhs toRs.10245 lakhs representing a decrease of 38 %. There are no commercial operations atBellary Power Plant due to expiry of Power Purchase Agreement (PPA) by KPTCL. The Companyis looking out for other options including its sale or relocation of the Plant. As thereis no activity, previous year figures comparison is not possible. The Wind Farm atRamagiri has generated 29.41 lakh/KWH power in the current year as against previous yeargeneration of 26.01 lakh/KWH representing an increase of 13% when compared to previousyear. All the power generated is wheeled through State Grid to the Company for internaluse.
Outlook for the Current Year :
Segment-wise discussion is furnished in Management Discussion and Analysis annexed tothis report as "ANNEXURE - E".
|FINANCIAL RESULTS||YEAR ENDED|
|Profit before Finance Costs|
|Less: Finance Cost||3420.65||3844.50|
|Profit before Depreciation||6291.96||8065.10|
|Profit (Loss) before Exceptional items and Tax||2738.66||4014.13|
|Less: Exceptional items||1345.71|||
|Profit/Loss Before Tax||1392.95||4014.13|
|Less: - Current Tax||186.49||803.00|
|- Deferred Tax||(231.74)||(561.65)|
|Profit for the period from continuing operations||1438.20||3772.78|
|Less : Loss from discounting operations||961.02|||
|Profit for the period||477.18||3772.78|
|Add: Balance Carried from|
|Profit available for Appropriation||4364.61||6387.43|
|Less: Transfer to General Reserve||1000.00||1500.00|
|Less: Transfer to Capital Redemption reserve||500.00||1000.00|
|Surplus carried to Balance Sheet||2864.61||3887.43|
Profit for the Current year at Rs. 477.18 Lakhs shows a decrease of 87 % compared toprevious year Profit of Rs.3772.78 Lakhs. Reduction in current year profit is due to lossfrom discontinued operations of Bellary Power Project and exceptional items of Rs.1345.71lakhs being the recompense amount paid to Banks and Financial Institutions (FIs) and alsohigh fluctuations in raw materials for oils division not commensurate with finishedproducts prices.
In view of the need for strengthening the financial base of the company, your Directorshave decided not to declare any dividend for the year 2013-14.
Capital Expenditure :
During the year the Company has incurred an amount of Rs.7460 lakhs on CapitalExpenditure which is mainly towards Chloromethane Project and other normal expenditure.The funds required for the above is met from Promoters contribution / Term loans andinternal accruals.
Preferential allotment of Convertible Share Warrants to Promoters : Listing of Equityshares issued to Promoters on conversion of First, Second and Third Tranche Warrants.
The Allotment Committee in its meeting held on 05.04.2014 has allotted 39,36,042 EquityShares of Rs.10/- each at par upon conversion of fully paid Third tranche warrants intoEquity in the ratio 1:1 in dematerialized form to Promoters i.e. 10,00,000 Shares to M/s.Sree Rayalaseema Hi-Strength Hypo Ltd. (SRHHL) and 29,36,042 Shares to M/s. TGV Projects& Inv. Pvt. Ltd. On completion of all formalities by the Company BSE vide its letterRef.No.DCS/ REF/BS/FIP/239/2014-15 dt.10.07.2014 has given In-principle Listing approvalfor these Equity Shares. NSDL vide its letter dt.21.07.2014 and CDSL vide its letterdt.18.07.2014 has credited these shares in demat form. These shares are subject to lock-inprovision of three years. Trading approval in respect of these shares has been issued byBSE vide its letter dated 25.07.2014.
Company's Exit from CDR :
After fulfillment of required formalities, the company has made application with CDRCell for company's exit. CDR Cell vide their letter Ref. No. By.CDR (SSA)/No.1152/2013-14dt.18.03.2014 has given its approval for company's exit. The company has to pay Rs.1345.71lakhs as recompense amount to Banks Consortium and Financial Institutions.
Safety and Environment Protection :
Your Company accords most importance to safety as well as development of greenenvironment. All out effort is being made to ensure round the clock safety in allactivities of the company. The steps taken by the management to develop green environsaround the factory has given desired results. A separate cell has been entrusted with theresponsibility of ensuring safety with a team of officials working with the motto ofcontinuous "SAFETY FOR 3M's i.e., MEN, MACHINES AND MATERIALS". The Company isconducting mock drills and proper training to staff at regular intervals in the safetyaspects. The Company's policy is safety with green environs is not ones responsibility butthe responsibility of every one related to the Company.
Listing Fees :
The Company has paid Listing Fee for the year 2013-14 to Bombay Stock Exchange vide itsletter dtd.17.04.2014.
Assets of the Company are adequately insured.
Fixed Deposits :
The Company has not accepted any fixed deposits during the year and there are no fixeddeposits outstanding at as on 31.3.2014.
Sri G. Krishna Murthy and Sri P.N. Vedanarayanan are retiring by rotation at theensuing Annual General Meeting (AGM). The Company has received necessary deposits fromshareholders proposing their candidature as Independent Director for election in the AGM.Necessary resolutions along with explanatory statement placed in the notice of AGM foryour approval. The Company has also received necessary deposit from a shareholder of thecompany proposing the candidature of Sri O.D. Reddy (existing Director) as an IndependentDirector. Necessary resolution along with explanatory statement placed in the notice ofAGM for your approval. M/s.IFCI Limited vide their letter Ref.No.IFCI/NDC-1/2013-131107033 dtd.06.11.2013 has appointed Mrs. S. Usha as their nominee inplace of Smt. Venus Bhanot. The Board in its meeting held on 11.11.2013 has Co-opted thenominee Director on the Board of the Company. The Board place on record its appreciationfor the valuable advises and suggestions provided by Smt. Venus Bhanot during her term onthe Board and audit committee and authorized the Chairman to convey the message.
Again M/s.IFCI Ltd., intimated vide its letters Ref. No. IFCI/ NDC/2014-140606066, dt.05.06.14 and Ref.No.IFCI/NDC/ 2014-140718311, dt.18.07.14, that Smt. Shalini Soni, DeputyGeneral Manager, Hyderabad Branch of IFCI has been nominated in place of Smt S. Usha. TheBoard of Directors in their meeting held on 30.07.2014 has co-opted Ms. Shalini Soni inplace of Smt S. Usha . The Board has placed on record its appreciation for her activeparticipation and advises during deliberations of Board and audit committee meetingsduring her tenure and authorized Sri T.G.Venkatesh, CMD to convey the message. Sri T.G.Venkatesh has been appointed as Chairman and Managing Director (CMD) of the Company by theBoard in its meeting held on 26.05.2014. A member of the company has deposited requisiteamount at the Regd.Office proposing his candidature to be appointed as Director (whoseposition is subject to retire by rotation). Necessary resolution is placed in the noticeof AGM to carry out the election for your approval.
Industrial Relations :
Your Company's Industrial Relations continue to be harmonious and cordial.
Particulars of Employees :
The information as required under Sec. 217 (2A) of the Companies Act, 1956 and therules framed thereunder was not annexed as none of the employees were in receipt of theremuneration above the limits prescribed thereunder.
Energy Conservation Technology Absorption and Foreign Exchange Earnings And Outgo :
Particulars required to be disclosed under Section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988 are annexed hereto as Annexure -A to this report.
Directors' Responsibility Statement :
As required by the provisions of Section 217(2AA) of the Companies Act, 1956,Directors' Responsibility Statement is attached as Annexure - B.
Corporate Governance :
Pursuant to clause-49 to the Listing Agreement, the mandatory requirements relating toCorporate Governance were to be complied with by your Company. Accordingly your Companyhas taken adequate steps to ensure that all mandatory provisions of Corporate Governancein terms of Clause-49 to the Listing Agreement with the Stock Exchanges, are compliedwith.
Corporate Governance - Clause- 49 of Listing Agreement :
A separate report on Corporate Governance (Annexure - C) is being incorporated as apart of the Annual Report along with a certificate from the Auditors of the Company(Annexure-D) regarding compliance of the conditions of Corporate Governance. The"Annexure C and D" are attached to this report.
Management Discussion and Analysis Report :
Further to comply with Clause-49 of listing agreement "Management Discussion andAnalysis" has been given as "Annexure - E" to the Directors' Report.
M/s. Brahmayya & Co., Chartered Accountants, Adoni, will retire at the conclusionof this Annual General Meeting and are eligible for reappointment. M/s. Brahmayya &Co., are being proposed for reappointment as Auditors to hold office for the current year2014-15. The company has received the consent from M/s.Brahmayya & Co., to act asAuditors of the Company provided their reappointment is approved by shareholders in theAnnual General Meeting (AGM).
Cost Audit :
Products manufactured by the Company are coming under Central Govt. order Letter Ref.Nos. (1) 52/26/CAB-2010 dtd.24.01.2012 for Caustic Soda [Chemicals] (2) 52/26/ CAB-2010dtd.02.05.2011 for Electricity Generation (3) 52/ 26/CAB-2010 dtd.24.01.2012 (4)52/26/CAB-2010 dtd. 06.11.2012 for other Products not covered by the above order. As perthis order Compliance Report (Form-A) has been filed in XBRL format with MCA portal videSRN : S28038636 dt.25.11.2013, with respect to the products covered by above two ordersreference nos. 1 & 2. Cost Audit Report (Form-I) has been filed in XBRL format videSRN: S22596605 dt.27.09.2013 with MCA portal for financial year 2012-13.
An Audit Committee continues to function to comply with provisions of Clause-49 ofListing Agreement and other statutory provisions. The Audit Committee was reconstituted on11.11.2013 with the following members Smt. S. Usha, Sri K. Davidson, Sri G. Krishna Murthyand Sri O.D. Reddy as members with Sri P.N. Vedanarayanan as Chairman of the AuditCommittee. Again the Audit Committee was reconstituted on 30.07.2014 by the Board withfollowing members: Ms. Shalini Soni, Sri K. Davidson, Sri G. Krishna Murthy, Sri O.D.Reddy as members and Sri P.N. Vedanarayanan as Chairman of the Committee to give effect tothe change in Nominee Director of IFCI Ltd.
Your Directors wish to express their sincere thanks to Financial Institutions, Bankers,Distributors and Customers for their continued support to the Company. The Directors alsoacknowledge with gratitude the continued help and support received from the variousdepartments of the Government of India and the Government of Andhra Pradesh and Governmentof Karnataka.
The Directors place on record their appreciation of the sincerity, commitment andcontribution made by the Employees at all levels and this was mainly responsible to carryon the business of the Company during the year.
|On behalf of the Board of Directors|
|Place : Hyderabad||K. KARUNAKAR RAO|
|Date : 30th July, 2014||Executive Director & CEO|
ANNEXURE 'A' TO THE DIRECTORS' REPORT
Particulars pursuant to Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988.
A. Conservation of Energy :
Planning to upgrade BM 2.72 Generation IV (narrow gap) elements to latestgeneration (zero gap) to reduce power consumption.
3 Nos. (4 M V AR) HT capacity banks are installed to improve power factor>0.99.
2 Nos. high energy intensive pumps replaced with latest energy saving pumps incooling tower, threreby saving > 600000 KWH/Annum.
FORM - A
|Disclosure of Particulars with respect to conservation of energy||Current Year||Previous Year|
|A. Power and Fuel Consumption :|
|1. Electricity :|
|a) i) Electricity from APCPDCL|
|Total Amount (Rs. In lakhs) including FSA charges)||17732.31||10953.14|
|ii) Electricity from APGPCL|
|Total Amount (Rs. In lakhs)||595.37||506.64|
|b) Own Generation :|
|i) Through Wind farm|
|ii) Through Co-Gen plant|
|2. Coal :|
|Total amount (Rs. In lakhs)||7001.35||8264.40|
|Average Rate (Rs./MT)||3285||3404|
|3. Husk :|
|Total amount (Rs. In lakhs)||88.38||812.58|
|Average Rate (Rs./MT)||2900||2820|
|4. Fuel Oil :|
|Qty (KL) (consist of HSD & FO)||418||694|
|Total Amount (Rs. In lakhs)||207.45||320.72|
|Average Rate (Rs./MT)||49629||46223|
|B. Consumption per MT of Caustic Soda Lye|
|No. of Units (KWH) (AC Power)||2448||2443|
B. Technology Absorption:
Efforts made in technology absorption are provided in "Form - B" as follows:
FORM - B
Research and Development (R & D) :
1. Specific areas in which R&D carried out by the Company :
Pilot plant studies were carried out to implement single stage brinefiltration instead of conventional clarifier, anthracite filter and precoat filter.Results are encouraging.
Recovery of mercury from mercury nitrate solution used in the analytical worksof Quality Assurance Division by chemical treatment and the same mercury is recycled foruse again in the process.
2. Benefits derived as a result of R & D :
By installing single stage filtration major operations like brine clarifier,anthracite filters and precoat filters will be eliminated, resulting in saving energy andman power.
By recovering mercury from mercury nitrate after analysis will eliminatecontamination of trade effluents with mercury and also reduce inventory of mercury metal.
3. Future Plans :
Planning to install Capacitor banks for LT Transformers to improve power factor.
Replacement of balance high energy intensive pumps with energy saving pumps.
Modification of HCL `E' furnace to generate LP steam and to reduce cooling waterrequirement.
4. Technology Absorption, Adoption and Innovation :
There is no technology innovation, absorption and adoption during the year.
C. Foreign Exchange Earnings and Outgo :
a) Activities relating to exports; initiatives taken to increase exports, developmentof new export markets for products and export plans:
i) Exported Hydrogenated Castor Oil, 12 Hydroxy Stearic Acid, Caustic Potash andplanning to enlarge exports by increasing export quantity and explore export possibilityfor other products.
|b) Total Foreign Exchange used and earned||(Rs. in lakhs)|
|i) Foreign Exchange used||5451.66|
|ii) Foreign Exchange earned||7721.76|
ANNEXURE B' TO THE DIRECTORS' REPORT
Directors' Responsibility Statement Yours Directors Further Confirm that :
(i) In the presentation of the Annual Accounts, applicable Accounting Standards havebeen followed.
(ii) The accounting policies are consistently applied and reasonable, prudent judgmentand estimates are made so as to give a true and fair view of the state of affairs of theCompany at the end of the Financial Year and of the profit of the company for that period.
(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) The Directors had prepared the Annual Accounts on a going concern basis.
|On behalf of the Board of Directors|
|Place : Hyderabad||K. KARUNAKAR RAO|
|Date : 30th July, 2014||Executive Director & CEO|
ANNEXURE C' TO THE DIRECTORS' REPORT
Report on Corporate Governance :
The Management of SRAAC Ltd., hereby confirm and certify that the relevant provisionsof Clause-49 of Listing Agreement dealing with "Corporate Governance" as amendedfrom time to time by SEBI and BSE have been complied for the year 2013-14. The CorporateGovernance compliance details are furnished hereunder:
(1) Company's Philosophy :
The company is firmly committed to fulfill the objective of efficient CorporateGovernance. The company has complied with almost all the provisions of CorporateGovernance before its enactment in the Listing Agreement by BSE on the order of SEBI. Thisshows the commitment of the management of the company for fair and efficient CorporateGovernance. The company's humble philosophy is "SERVING SOCIETY THROUGH HARMONIOUSAND CORDIAL INDUSTRY ACTIVITIES AND RELATIONS" synchronizing socio, economic andhuman objectives which are backed by principles of concern, commitment, ethics, excellenceand learning in all its activities and harmonious relationships with stakeholders,customers, associates and community at large which has always propelled the Companytowards higher horizons.
(2) Board Procedure :
All the mandatory information as mentioned in Annexure - 1A for Clause-49 of ListingAgreement is being placed before the Board during its meetings.
(3) Board of Directors :
The Composition of the Board is in compliance with the guidelines given in Clause-49 ofthe Listing Agreement. The Board comprises of Seven Directors and majority of Directorsare independent/nominee Directors. Except two Executive Directors, the other Directors arenon-Executive Directors. The day-to-day management of the Company is conducted byExecutive Director & CEO and Executive Director (Technical) subject to thesuperintendence and control of the Board of Directors. The details of Directors attendingthe Meetings and Date of the Meetings are further furnished hereunder :
|F.Y. 2013-14 attendance at|
|S. No.||Name of Director||Category||BM||Last AGM||No. of Directorship||Committee Positions|
|1.||Sri G. Krishna Murthy||Director||4||Yes||-||-||-|
|2.||Sri K. Karunakar Rao||E.D & CEO||4||Yes||-||-||-|
|3.||Sri N. Jesvanth Reddy||E.D (Technical)||4||Yes||-||-||-|
|4.||Sri M.P. Murti||Director||-||No||-||-||-|
|5.||Smt. Venus Bhanot||Director||-||No||-||-||-|
|(Upto 11.11.13)||(IFCI Nominee)|
|6.||Smt. S. Usha||Director||1||No||5||-||-|
|(from 11.11.13)||(IFCI Nominee)|
|7.||Sri P. Sitaram||Director||1||No||-||-||-|
|(Upto 29.06.13)||(IDBI Nominee)|
|8.||Sri K. Davidson||Director||1||No||-||-||-|
|9.||Sri P.N. Vedanarayanan||Director||4||Yes||-||-||-|
|10.||Sri O.D. Reddy||Director||4||Yes||1||-||3|
During the financial year ended 31st March, 2014, Four Board Meetings were held on (1)15.05.2013 (2) 07.08.2013 (3) 11.11.2013 and (4) 29.01.2014 respectively.
(4) Audit Committee :
The composition of the Audit Committee is in accordance with the Corporate Governanceguidelines and the provisions of 292A of the Companies Act, 1956. The main terms ofreference of the Audit Committee are;
1. Overseeing of the Company's financial reporting process to ensure that the financialstatement is correct, sufficient and credible.
2. Recommending to the Board with regard to appointment, reappointment, fixation offees etc., of Statutory auditors, Cost Auditors etc.,
3. Reviewing with management the annual Financial Statement before submitting to theBoard with particular reference to Directors Responsibility statement, Changes inAccounting Policies, major accounting entries involving estimates, compliance with otherListing Agreement, disclosure of other related party transactions.
4. Qualifications in draft Audit Report.
5. Reviewing with management quarterly financial statements.
6. The adequacy of internal audit functions.
7. Discussion with statutory auditors before the audit commences.
8. Reviewing the findings of any investigations by the internal auditors etc.,
9. Appointment of CFO.
In addition to quarterly and yearly Un-audited/Audited financial results the Committeedeliberate upon the relevant matters mentioned in Listing Agreement, Companies Act andCost Audit Report rules etc. The Committee is headed by Sri P.N. Vedanarayanan, the Seniormost independent Director. Majority of the committee members are independent Directors or
Nominee Directors of Financial Institutions viz., IDBI and IFCI. The Audit Committeewas reconstituted by the Board in its meeting held on 11.11.2013 with the followingDirectors as its members (1) Sri P.N. Vedanarayanan, Chairman (2) Mrs. S. Usha, Member (3)Sri K. Davidson, Member (4) Sri G. Krishna Murthy, Member and (5) Sri O.D. Reddy, Member.
|Sl. No.||Name of the Director||Designation||No. of Meetings|
|1.||Sri M.P. Murti (upto 07.08.13)||Chairman||2||2|
|2.||Sri P.N. Vedanarayanan||Chairman||4||4|
|3.||Smt. Venus Bhanot (Upto 11.11.13)||Member||4||-|
|4.||Smt. S. Usha (from 11.11.13)||Member||4||1|
|5.||Sri P. Sitaram (Upto 29.06.13)||Member||4||1|
|6.||Sri K. Davidson (from 29.06.13)||Member||4||1|
|7.||Sri G. Krishna Murthy||Member||4||3|
|8.||Sri O.D. Reddy||Member||4||4|
During the financial year ended 31st March, 2014, Four Board Audit Committee Meetingswere held on (1) 15.05.2013 (2) 07
|No Related Research Found|
|No Related Research Found|
P N Vedanarayanan , Director
G Krishna Murthy , Director
O D Reddy , Director
V Radhakrishna Murthy , Company Secretary
Company Head Office / Quarters:
Phone : Andhra Pradesh-91-8518-280006/7/8 / Andhra Pradesh-
Fax : Andhra Pradesh-91-8518-280098 / Andhra Pradesh-
E-mail : email@example.com
Web : http://www.tgvgroup.com
Aarthi Consultants Pvt Ltd
1-2-285 Domalguda, , ,Hyderabad - 500 029