Surana Telecom and Power Ltd Directors Report.

To the Members of

Surana Telecom and Power Limited

The Directors have pleasure in presenting the 29th Annual Report of your Company together with the Audited Balance Sheet as at 31st March 2018 and Statement of Profit and Loss for the year ended 31st March, 2018.

FINANCIAL RESULTS

The performance of the Company during the year has been as under:

Particulars

Standalone Results

Consolidated Results

2017-18 2016-17 2017-18 2016-17
Sales and other Income 255,927,521 275,122,174 357,401,412 344,522,335
Profit before Depreciation and Interest 140,637,163 135,944,838 232,689,430 193,840,864
LESS :
Depreciation & Amortization 71,867,146 74,127,977 138,390,864 105,124,324
Interest 39,287,415 39,379,813 69,485,997 63,128,885
Profit for the year 29,482,602 22,437,048 24,812,569 25,587,655
Prior period Adjustments -- --
Profit before Taxation 29,482,602 22,437,048 24,812,569 25,587,655
Provision for Taxation : Current Tax 6,015,000 43,70,000 6,630,000 44,49,068
Deferred Tax 408,000 4,53,000 (585,480) 2,46,862
Income Tax in respect of earlier years -- -- --
Profit after Tax 23,059,602 17,614,048 18,768,049 20,891,725
Add: Other Comprehensive Income 32,048,459 (3,308,032) 32,048,459 (3,308,032)
Total Comprehensive Income for the year 55,108,061 14,306,016 50,816,508 17,583,693
Less: Minority Interest (Current years Profit/(loss) -- -- (3,865,795) 15,50,948
Add: Share in Net Profit of Associate Company 24,707,141 24,251,053
Surplus brought forward from previous year 218,868,588 204,562,572 242,157,525 201,873,727
Balance carried forward to Balance Sheet 273,976,649 218,868,588 321,546,969 242,157,525

Note: The previous years figures regrouped and rearranged wherever necessary in order to make them comparable as per Ind-AS.

PERFORMANCE

During the year under review, the Income from Operations is 23,53,45,624 as against 26,65,32,956 for the corresponding previous year. The Profit Before Tax stood at 2,94,82,602 as against 2,24,37,048 for the previous year. The Profit After Tax stood at 2,30,59,602 as against 1,76,14,048 for the corresponding period. The Basic Earnings Per Share for the year ended 31.03.2018 is 0.17 as against 0.13 for the corresponding previous year ended 31.03.2017.

OPERATIONS

The Companys 5 MW Solar Power Project is situated at Gujarat Solar Park, Charanka Village, Santalpur Taluq, Patan District is generating steady income.

M/s.Surana Solar Systems Pvt. Ltd., a subsidiary company is successfully operating its 5 MW Solar Power Plant situated at Shankapur Village, Shankarampet Mandal, Medak District, Telangana.

M/s.Aryavaan Renewable Energy Pvt. Ltd., a subsidiary of the Company has successfully commissioned its grid connected 5 MW Solar Power Plant at Barhara Village, Sarila Tehsil, Hamirpur District, Uttar Pradesh on 08.02.2017 and since then successfully injecting power to the grid. For sale of power, the Company has entered into long term Power Purchase Agreement with Uttar Pradesh Power Corporation Ltd.

Pursuant to the Scheme of Arrangement, the 5 MW Solar Power Project located at Munipally Village, Sadashivpet, Medak District of M/s Bhagyanagar India Limited has transferred to the Company. The project is running successfully. The power is being sold to M/s.Tata Communications Ltd., through Open Access route.

M/s.Tejas India Solar Energy Pvt. Ltd., a Subsidiary Company has completed erection of 3 MW grid connected Solar Power Plant at Gajwel Mandal, Medak District, Telangana. The power will be sold under Open Access to third party. The Company is awaiting approvals from the authorities for synchronization of the plant with the grid, which is expected by the end of July, 2018.

SUBSIDIARIES

Your company has 4 subsidiary companies as on 31.03.2018 as mentioned below. Further there has been no material change in the nature of business of the subsidiaries.

Name of the Subsidiary Percentage of Shareholding
1. Globecom Infotech Private Limited 100%
2. Surana Solar Systems Private Limited 51%
3. Tejas India Solar Energy Private Limited 51%
4. Aryavaan Renewable Energy Private Limited 51%

During the year under review, your company has divested 51% equity stake, held in Celestial Solar Solutions Private Limited which has set up 10 MW solar power project in the State of Karnataka, to NVR infrastructure and Services Pvt Ltd, since the outline investment for executing 10 MW solar power project was done by NVR infrastructure and Services Pvt Ltd, which was holding 49% stake in the said company.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed Form AOC-1, which forms part of the annual report. Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements prepared and annexed in accordance with the Accounting Standards 21 and 23 as prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 and Guidelines issued by Securities and Exchange Board of India (“SEBI”) also forms part of this Annual Report.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.suranatele.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request.

SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

SHARECAPITAL

The paid-up Share Capital of the Company as on 31st March, 2018 is 13,57,59,963 divided into 13,57,59,963 equity shares of Re.1/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Listing Regulations, is presented in a separate section forms part of the Annual Report as Annexure-II.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) That the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the directors 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 31st March, 2018 and of the profit and loss of the company for that period;

(c) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) That the directors have prepared the annual accounts for the financial year 31st March, 2018 on a going concern basis; and

(e) That the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The Independent Directors have submitted the declaration of independence, as required pursuant to sub-section (7) of section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub- section(6) of Section 149.

NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel

and Senior Management of the Company. The details of Nomination and Remuneration Committee and Policy are stated in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR SECURITIES OR INVESTMENTS

The details of Loans, Guarantees Securities and Investments made during the financial year ended 31st March, 2018 are given in the notes to the Financial Statements in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arms length basis and 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. All Related Party Transactions are placed before the Audit Committee and 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 and the Board of Directors on a quarterly basis. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of the Companies (Accounts) Rules, 2014 and the same is annexed herewith as “Annexure-IN” to this Report.

DIVIDEND

The Board of Directors have not recommended the dividend for the financial year 2017-18 due to low profitability and to retain maximum possible cash in the system to meet the financial commitments.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 are enclosed as Annexure - IV to this Report.

PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in the Annexure-I forming part of this Report.

RISK MANAGEMENT POLICY

In terms of the requirement Section 134(3)(n) and Regulation 21 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with relevant provisions of the Companies Act 2013 the Company has developed and implemented the Risk Management Policy. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report. At present the Company has not identified any element of risk which may threaten the existence of the company.

BOARD EVALUATION

During the year under review, pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the evaluation of performance of all Directors is undertaken annually. The company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprise evaluation criteria taking into consideration various performance related aspects.

The Board of Directors has expressed their satisfaction with the valuation process.

DIRECTORS

Ms. Vinita Surana, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Shri D.Venkata Subbaiah and Dr.R.N.Sreenath, Independent Directors of the Company who attained the age above 75 years are being appointed as Non-Executive Independent Directors through Special Resolution by shareholders at this Annual General Meeting pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

The brief particulars of the Directors seeking appointment/ re-appointment at this Annual General Meeting are being annexed to the Corporate Governance Report.

Pursuant to the provisions of Section 203 of the Act, the appointment of Shri Narender Surana, Managing Director and Shri Devendra Surana, Director and Ms.Vinita Surana, Whole-time Director and Shri Baunkara Shekarnath, Wholetime Director and Shri. Srinivas Dudam, Company Secretary were formalized as the Key Managerial Personnel of the Company.

MEETINGS

During the financial year under review, 5 (Five) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period of 120 days as prescribed under the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations, 2015.

DEPOSITS

The Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

STATUTORY AUDITORS

M/s. Luharuka & Associates, Chartered Accountants were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 26th September, 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. M/s. Luharuka & Associates, Chartered Accountants have confirmed that they are not disqualified from continuing as Auditors of the Company.

AUDITORS REPORT

There are no qualifications, reservations or adverse remarks made by M/s. Luharuka & Associates, Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31st March, 2018.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s Sekhar & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the Financial Year ended 31st March, 2019.

COST AUDITORS

The Board of Directors, subject to the approval of the Central Government, re-appointed M/s BVR & Associates, Cost Accountants, holding certificate of practice No.16851, as a Cost Auditor for conducting the Cost Audit for the financial year 2018-19. Subject to section 148 of the Companies Act,

2013 read with Companies (Cost Records and Audit) Rules,

2014 issued by the MCA, the Audit Committee recommended their re-appointment. The Company has also received a letter from the Cost Auditor, stating that the appointment, if made, will be within the limits prescribed pursuant to the section 141 of Companies Act, 2013.

CORPORATE GOVERNANCE

The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance as per the requirements of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

A separate report on corporate governance practices followed by the Company together with a Certificate from the Companys Auditors confirming compliances forms an integral part of this Report.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of vigil mechanism is available on the Companys website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Rakhi Agarwal, Company Secretary in Practice as Secretarial Auditors to conduct Secretarial audit of the company for the financial year ended March 31, 2018.

The Secretarial Audit Report issued by Ms. Rakhi Agarwal, Company Secretary in Practice in Form MR-3 is enclosed as Annexure - V to this Annual Report.

The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks.

PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

PARTICULARS OF REMUNERATION

The remuneration and perquisites provided to the employees and Management are at par with the industry levels. The remunerations paid to the Managing Director and senior executives are reviewed and recommended by the Nomination and Remuneration Committee.

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Name of the Director Ratio to Median Remuneration
Shri Narender Surana, Managing Director 46.67
Shri Devendra Surana, Director 0
Ms.Vinita Surana, WTD 16.33
Shri Baunakar Shekarnath, WTD 0

(ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name of Person % increase in remuneration
Shri Narender Surana, Managing Director 0
Shri Devendra Surana, Director 0
Ms.Vinita Surana, WTD 0
Shri Baunakar Shekarnath, WTD 0
Shri. Srinivas Dudam, CS 5.53

(iii) The percentage increase in the median remuneration of employees in the financial year - (24.04%)

(iv) The number of permanent employees on the rolls of company - 19.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average increase in salaries of employees other than managerial personnel in 2017-18 was 6.23%. Percentage increase in the managerial remuneration for the year was Nil.

(vi) Affirmation that the remuneration is as per the remuneration policy of the company - Yes.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year 31st March, 2018 to which the financial statements relates and the date of signing of this report.

HUMAN RESOURCES

The industrial relations of the Company continued to be harmonious during the year under review.

ISO 9001-2008 CERTIFICATION

Your Company continues to hold ISO 9001-2008 Certification by meeting all the requirements of Certification from time to time.

POLICY ON SEXUAL HARRASSEMENT

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Internal Complaints Committee(ICC) has been setup to redress Complaints received regarding sexual Harassment. During the period under the review, no complaints were received by ICC.

APPRECIATION

Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry, despite increased competition from several existing and new players.

CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Directors take this opportunity to place on record their sincere thanks to the suppliers, customers, strategic partners, Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere and dedicated services of the employees and workmen at all levels.

For and on behalf of the Board of Directors
NARENDER SURANA DEVENDRA SURANA
MANAGING DIRECTOR DIRECTOR
(DIN-00075086) (DIN-00077296)
Place: Secunderabad
Date: 06.08.2018