To
The Members of Sujana Universal Industries Limited,
(A Company under Corporate Insolvency Resolution Process by NCLT order
No. CP(IB)No. 186/09/HDB/2019).
Your Directors have pleasure in presenting the Thirty First Annual
(31st) Report of your Company together with the Audited Financial Statements of Accounts
for the Financial Year ended 31st March, 2020.
Companys Performance
Your Directors hereby report that the Company has achieved a turnover
of Rs. 3.80 lakhs upto 31.03.2020 as against the turnover of Rs. 276.60 lakhs during the
previous financial year ended 31.03.2019.
The highlights of the Financial Results are as follows :
Rs. in Lakhs
| Particulars |
2019-2020 |
2018-2019 |
| Revenue: Revenue from Operations |
- |
236.32 |
| Other Income |
3.80 |
40.28 |
| Total Income |
3.80 |
276.60 |
| Expenses: Cost of Materials Consumed |
- |
- |
| Purchase of Stock-in-Trade |
- |
- |
| Changes in inventories of Finished Goods,
Work-in-Progress and Stock-in-Trade |
- |
887.45 |
| Employee Benefit Expenses |
65.51 |
111.10 |
| Finance Costs |
866.01 |
2730.16 |
| Depreciation and Amortization Expenses |
1101.10 |
1006.10 |
| Other Expenses |
6827.61 |
68453.30 |
| Total Expenses |
8860.24 |
73188.11 |
| Profit Before Tax |
(8856.44) |
(72911.51) |
| Current Tax |
- |
- |
| Differed Tax |
- |
96.52 |
| Profit for the year |
(8856.44) |
(73008.03) |
Operations & Overall Performance:
During the year under review, your Company reported total income of
Rs.3.80 Lakhs as against Rs.276.60 lakhs of previous year. Your company incurred loss
before tax of Rs.8856.44 lakhs as against loss of Rs.73008.03 lakhs in the previous year.
After making a provision of Rs.866.01 Lakhs towards interest and Rs.1101.10 Lakhs towards
depreciation, the current financial year closed with a net loss of Rs.8856.44 Lakhs as
against net loss of Rs.73008.03 Lakhs last year.
The net worth of the Company as on 31st March, 2020 is Rs. -69076.50
lakhs against Rs. -60178.57 lakhs in 2018-19. Net worth is decreased by Rs. 8897.93 lakhs.
Dividend:
In view of the losses, your Company does not recommend any dividend for
the year under review.
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, 2020 and the date of this report.
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:
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were in ordinary course of business and on arms
length basis. During the year, the Company had not entered into any contract/ arrangement/
transaction with related parties which could be considered material under Regulation 23 of
Listing Regulation. Accordingly, the disclosure of Related Party Transactions as required
under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable. The
Policy on materiality of related party transactions and dealing with related party
transactions as approved by the Board is also posted in the Investors section of the
Companys website www.sujana.com. Your Directors draw attention of the members to Note No.
2.28 to the financial statements which sets out related party disclosures.
Prior omnibus approval is obtained on an annual basis for the
transactions with related parties which are of a foreseeable
and repetitive nature. The transactions entered into pursuant to the
omnibus approval so granted and a statement giving details of all transactions with
related parties are placed before the Audit Committee and Board of Directors for their
review on a periodic 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:
Corporate Social Responsibility Policy framed 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 Companys website. The Company is not falling under any of the
applicability criterias of CSR as mentioned under the provisions of Section 135 of the
Companies Act, 2013 as amended by the Companies Amendment Act, 2019. Reporting as required
under the aforesaid Section, for the FY 2019-20 as Annexure- I 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 -II attached
hereto and forms part of this Report.
Auditors:
(a) Statutory Auditors
M/s. J.Singh & Associates, Chartered Accountants (FRN No. 110266W),
are the Statutory Auditors of the Company and they hold the office till the conclusion of
the 33rd Annual General Meeting of the Company in the year 2022.
Notes to the accounts as referred in the Auditors Report are
self-explanatory and does not contain any qualification and therefore, do not call for any
further comments or explanations.
During the year under review, the Auditors of the Company have not
reported any fraud as specified under Section 143 (12) of the Companies Act, 2013 to the
Audit Committee.
Statutory Auditors Qualification / Comment / Explanations on the
Companys Standalone / Consolidated Financial Statements
a) The Company has defaulted in repayment of dues to Banks/Financial
Institutions and all loans outstanding were classified as NPAs by the banks. Provision
for interest (excluding penal interest) amounting to Rs. 61.95 Cr. and Rs.236.81 Cr for
the quarter ended 31st March 2020 and Year ended on such date respectively on its Working
Capital Loan and Term Loan has not been made in the books by the Company, as those Loan
Accounts were classified as NPA by the Lending Banks and Financial Institutions. The loss
of the Company has been understated by Rs.61.95 Cr for the quarter ended 31st March 2020
and Rs. 236.81 Cr for the year ended on such date in view of non-provision of Interest
amount.
As on 31.3.2020, the outstanding secured loans stand at Rs. 1170.79
cr., and the Company is pursuing with the lenders a viable restructuring package. As
almost all the Banks/Financial Institutions, the lenders have classified our loan accounts
as NPAs and in view of the Companys efforts with the lenders for settlement of dues in
the form of OTS/Resolution of debts by takeover by strategic investors, the Company has
not provided in the books of account unpaid interest amounting to Rs.236.81 cr., for the
current financial year 2019-20.
b. In absence of technical and costing evaluation of current and
noncurrent assets, impact of impairments, if any, on their economic value, we cant
comment on the realizable value of same.
The amounts in current assets and non current assets advance paid for
services etc., and in the opinion of the management, they are good and recoverable in cash
or in kind. Hence, provision has not been made.
c. The Trade receivables could not be verified as the confirmation of
balances have not been received. The Company has made a provision for bad and doubtful
debts for trade receivables amounting to Rs.502.31 Cr during the Year ended 31st March
2020. The realizability of remaining trade receivables amounting to Rs.506.88 Cr is in
doubt and the company has not made any provision for Bad and Doubtful Debts in respect of
this trade receivables.
The Company has sent letters to the debtors requesting for confirmation
of balance as on 31.03.2020. The Company is following up with the Debtors for the
confirmations. The company has made provision for bad and doubtful debts to the extent of
Rs.502.31 crore and is confident of realizing the balance amount of Rs.506.88 crore. Hence
provision has not been made for the amount.
d. Loans and advances of Rs. 44.11 Cr has been given to various
sub-contractors, suppliers and other parties are old advances. Having regard to the age of
this advances, in our opinion, this are doubtful of recovery. The company is yet to assess
the change in risk of default and resultant expected credit allowance on such Loan and
advances. Had the aforesaid Loans and advances has been provided for impairment, loss of
the company for the quarter ended 31st March 2020 and year ended on such date would have
been higher by Rs. 44.11 Cr.
The amount of Rs.44.11 Cr., has been paid as advance for supply of
goods/ services and in the opinion of the management, they are good and recoverable in
cash or in kind. Hence, provision has not been made.
e. The Companys Net worth has been eroded on account of losses
incurred by the company during the year ended 31st March 2020 and previous financial year
and the net worth of the company is negative. The Current Liabilities of the company
exceeded the current assets of the company as at 31st March 2020 by Rs.831.07 Cr. It would
cast doubt on the Companys ability to continue as a going concern basis.
The company has been making efforts for settlement of the dues of
banks/ Financial Institutions in the form of OTS/ Resolution of debts through takeover by
strategic investors. The company expects its net worth to become positive in the process
and hence can continue as a going concern.
Note No. e in Independent consolidated audit report
f. Except Sun Trading Net worth of the companies in the Group has been
eroded on account of losses incurred during current financial year ended 31st March 2020
and previous financial year and the net worth of the company is negative. It would cast
doubt on the Companys ability to continue as a going concern basis
Due to adverse conditions in the international market for steel and
allied products and other problems, the subsidiaries incurred losses and their Net Worth
has been eroded. It may be observed from the net worth of all the subsidiaries excepting
Sun Trading Ltd has been eroded fully. Since the company management was of the opinion
that the impairment of valuation of the subsidiaries excepting Sun Trading Ltd was
permanent, a provision for impairment to the extent of Rs.174.97 crore (book value of
investment in subsidiaries excepting Sun Trading Ltd) was made in books.
(b) Cost Auditors:
M/s. B V R Associates & Co, Cost Accountants, have been appointed
as the Cost Auditor of the Company for financial year 2019-20 pursuant to provisions of
Section 148 and other applicable provisions of the Companies Act 2013. 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, 2020.
The Company is in process of filing the Cost Audit Report, for the
financial year 2019-20 with the Central Government.
(c) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules framed there under, the Board of Directors has appointed Anand Kumar C Kasat,
Practicing Company Secretaries, Mem. No. 42078, CP. No. 17420 to undertake the secretarial
audit of the Company. The secretarial audit report issued by Anand Kumar C Kasat,
Practicing Company Secretary for the financial year ending 31st March, 2020 is given in
the Annexure-III-A 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.
(d) Secretarial Compliance Report
Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure
Requirement) Regulations 2015 the Company has obtained annual Secretarial Compliance
Report for the financial year ended 31st March, 2020. The report has been annexed herewith
as "Annexure - III-B".
(e) . The Company could not appoint Company Secretary under Section
203 of Companies Act, 2013 reading Rule 8A of Companies (Appointment and Remuneration of
Key Managerial Personnel) Rules, 2014 in spite of its efforts and the Company is taking
further steps to comply with the provisions for appointment of Company Secretary.
Since the appointment of Company Secretary could not be made, the
Company could not file Form INC 22A and consequently, the Company has been classified as
Non Compliant Company by the Ministry of Corporate Affairs.
Share Capital
The paid up equity share capital as on 31st March, 2020 was Rs.16884.11
Lakhs. During the year 2019-20, there was no change in the share capital of the Company.
The Company has not issued any share with differential voting rights
nor has granted any stock options or sweat equity as on 31st March, 2020. 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 -IV 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 -V attached hereto and forms part of this Report.
Meetings:
During the year under review 4 (Four) board meetings were held on May
29th, 2019, August 14th, 2019, November 14th, 2019 and February 14th, 2020 The maximum
time gap between any two consecutive meetings was within the period prescribed under the
Companies Act, 2013 and and SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015.
Directors:
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(DIN: 00118801), Director of the Company will retire by rotation at the ensuing Annual
General Meeting and, being eligible, offers himself for re-appointment.
Independent Directors existing prior to the Commencement of Corporate
Insolvency Resolution Process (CIRP), will continue as such irrespective of their tenure
since the provisions of IBC Override the provisions of Companies Act,2013.
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 following persons are Key Managerial Personnel of the Company:
Shri G Srinivasa Raju : Managing Director Shri S Hanumantha rao : Whole
time Director Shri S Rengaraj : Chief Financial Officer
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, are attached and forms part of this Report.
Board Evaluation:
The Board of Directors evaluated the annual performance of the Board as
a whole, its committees 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 Boards 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 Committees 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,
2020 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-VI 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- VII 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-VIII 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 :
Details of the subsidiaries are given below :
Your Company has the following Wholly Owned Subsidiaries:
PAC Ventures Pte Ltd, Singapore was set up in the year 2007 with a
view to expand the Companys business of general wholesale trade(including general imports
and exports) in the overseas markets and the Company has achieved revenue of Rs. 132.86 cr
during the year
Sujana Holdings Ltd, Dubai was set up in the year 2006 for carrying
on
the business of investments and trading and its revenue during the year
is nil Further, Sujana Holdings has expanded its operations in Sharjah UAE by forming a
subsidiary namely Empire Gulf FZE, Sharjah, UAE.
Nuance Holdings Ltd, Hong Kong was set up in the year 2006 for
carrying on the business of investments and trading and its revenue during the year was
Rs. Nil.
Nuance Holdings Ltd has expanded its operations by forming a subsidiary
namely Selene Holdings Ltd, Mauritius.
Sun Trading Ltd, Cayman Islands was set up in the year 2008 for
carrying on the business of general wholesale trade which includes general imports and
exports and its consolidated revenue was Rs.
Nil. Sun Trading Ltd has a subsidiary namely Sun global Trading Pte.
Ltd, Singapore.
Hestia Holdings Ltd, Mauritius has became subsidiary of the Company
w.e.f. 27th December 2010, with the object of carrying on the business of general trade
which includes general imports and exports.
A separate statement containing the salient features of the Financial
Statement for the financial year ended 31st March, 2020 of the aforesaid subsidiary
companies are included in the Annual Report as Form AOC-1 as an Annexure -IX. 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 2019-20, 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 Companys 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.
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
Companys 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 Companys 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 Companys 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.
|
For SUJANA UNIVERSAL
INDUSTRIES LIMITED |
|
G. Srinivasa Raju, Managing
Director |
|
TAKEN ON RECORD |
|
Ramakrishnan Sadasivan |
|
Resolution Professional |
|
(IP Registration No.
IBBI/IPA-001/IP-P00108/2017-18/10215) |
|
Sujana Universal Industries
Limited |
|
(A Company under Corporate
Insolvency Resolution Process by |
| PLACE: Hyderabad |
NCLT order No. CP(IB)No.
186/09/HDB/2019) |
| DATE: 7th December, 2020 |
|
+91-9892691696
