Dear Members,
Your Directors have pleasure in presenting their 22nd Annual Report of the
Company together with the Audited Accounts for the year ended March 31, 2017.
FINANCIAL PERFORMANCE:
|
|
(Rs. in Million) |
| Particulars |
Year ended 31.03.2017 |
Year ended 31.03.2016 |
|
(12 months) |
(12 months) |
| Income from sale of power |
984.50 |
1069.66 |
| Other Income |
--- |
--- |
|
984.50 |
1069.66 |
| Profit before interest and depreciation |
60.42 |
45.16 |
| Interest and Finance Charges |
00.11 |
25.31 |
| Depreciation |
20.37 |
31.94 |
| Profit after interest and depreciation but before exceptional items |
(39.94) |
(12.10) |
| Exceptional Items (Net) |
1139.49 |
86.20 |
| Profit/(loss) before Tax |
(1179.43) |
(98.30) |
| Current Tax |
-- |
-- |
| Mat Credit entitlement |
-- |
-- |
| Profit/(loss) after Tax |
(1179.43) |
(98.30) |
REVIEW OF OPERATIONS:
The Board observed that the Company achieved a turnover of Rs.984.50 million for 12
months (Standalone) as against the previous years turnover of Rs.1069.66 million
(standalone) and there is a decrease in turnover by Rs.85.16 millions, which is a decrease
by 7.96% over last year. The net loss for the year 2016-17 is Rs.1179.43 million as
against the net loss for the previous year 2015-16 of Rs.98.30 million which is due to the
reason of shut down of two of the gen sets at the Power Plant and also the production of
power which was hampered due to the frequent shutting down of another engine for carrying
out overhaul in phases.
DIVIDEND:
Your Directors are unable to recommend any dividend on the Equity Capital of the
Company due to continuous losses.
DIRECTORS:
In accordance with the provisions of the Companies Act, 2013 and Articles of
Association of the Company, Mr. P V Subba Rao, Independent Director and Mr. B P Vijaya
Rao,
Independent Director will retire by rotation at the ensuing Annual General Meeting and
being eligible, offers himself for re-appointment as Directors of the Company.
Further details about the above directors are given in the Corporate Governance Report
as well as in the Notice of the ensuing Annual General Meeting being sent to the
shareholders along with the Annual Report.
During the year Dr. R.S. Murthy, Director resigned from the Board with effect from 24th
July, 2017.
Evaluation of the Boards Performance
In compliance with the Companies Act, 2013, and pursuant to LODR regulations, the
performance evaluation of the Board and of its Committees was carried out during the year
under review. More details on the same are given in the Corporate Governance Report.
Familiarization Program for Independent Directors
The Company has formulated a familiarization program for the Independent Directors to
provide insights into the Company to enable the Independent Directors to understand its
business in depth and contribute significantly to the Company. The details of such program
are available in the Companys website www.suryachakra.in
Statement of declaration by Independent Directors
The Company has received declarations from all the Independent Directors confirming
that they meet the criteria of independence as prescribed both under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.
Nomination & Remuneration Policy
The company follows a policy on remuneration of Directors and Senior Management
Employees. The policy is approved by the Nomination & Remuneration Committee and the
Board. More details on the same are given in the Corporate Governance Report.
Report on the performance and financial position of each of the subsidiaries has been
provided in Form AOC-1 at Annexure - 6.
Note on standalone M/s Suryachakra Power Corporation Limited:
The JERC after going through the written submissions they have issued order dated
13.01.2017 which indicated the company is due of an amount of Rs.9.67 Crores to the A
& N Administration. However the company has appealed against the order dated 13.1.2017
in APTEL and is since admitted.
The Company is now filing an IA in APTEL for the above. The arguments on our Appeal No.
34 of 2017 filed in the APTEL for quashing the impugned JERC order dated 13.01.2017 is
continuing in APTEL and the APTEL in its hearing and order dated 05.04.2017 the APTEL has
asked the Company to file its written submission within 04 weeks i.e. 04.05.2017 and to
the A&N Administration and JERC within 02 weeks thereafter i.e. 19.05.2017 fixing the
next date of hearing on 06.07.2017. Accordingly, the Company has submitted its written
submission on 04.05.2017 in APTEL.
It is also to inform that a tripartite meeting was conducted by Commissioner cum
Secretary (Power) at Port Blair on 16.05.2017 among the Officials of the Company, State
Bank of India /IFB/Kolkata and ED / A&N Administration to discuss the present
precarious financial / operational status of our 20 MW Power Plant and to find out a
solution to keep the Plant operational continuously. The meeting went well and in the
meeting to our request the A&N Administration has agreed to grant extension of the
existing term of the PPA beyond 31.03.2018. Modalities are being worked out by both the
parties for extension of the PPA period.
State Bank of India has agreed to co-operate with the Company if PPA gets extended and
also to consider One Time Settlement as per Banks policy. The matter is in progress.
The company has made a request to bank to assign the debt to an ARC debt, so that the
company will get enough time to repay the debt through ARC out of operational income and
buy out etc.,.
MAINTENANCE OF THE POWER PLANT:
Your Company has been making arrangements for procurement and supply of the required
spares and services with MARES Germany and negotiations with them are going on. Your
Company has submitted to the Electricity Department, A & N Administration the
following Two options.
Option -I to repair the engines and continue the operations till 31.03.2018 up to which
PPA is there.
Option - II for complete overhauling of all the engines, if the PPA is extended for
further 5 more years.
Management Discussion and Analysis Report for the year under review, pursuant to the
LODR regulations, forms part of this Annual Report. The Board reviews the progress of the
Company from time to time and guide the Company towards its corporate goals.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
a] in the preparation of the annual accounts, the applicable Accounting Standards have
been followed along with proper explanations relating to material departures;
b] 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 and of
the profit or loss of the company for that period;
c] the Directors have ensured that proper and sufficient care is taken in the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the company and for preventing and detecting
fraud and other irregularities;
d] the Annual Accounts are prepared on a going concern basis.
E] the directors laid down internal financial controls to be followed by the Company
and that such internal financial controls are adequate and were operating effectively.
F] the directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
Disclosures Under The Companies Act, 2013
i) Extract of Annual Return:
The details forming part of the extract of the annual return is enclosed in Form MGT.9
at Annexure - I.
ii) Number of Board Meetings:
The Board of Directors met 4 times during the year 2016-2017. The details of the board
meetings and the attendance of the Directors are provided in the Corporate Governance
Report.
iii) Composition of Audit Committee:
The Board has constituted the Audit Committee which comprises of Sri P V Subba Rao as
the Chairman and Sri B P Vijaya Rao, and Sri K Vijay Kumar as the members. More details on
the committee are given in the Corporate Governance Report.
iv) Related Party Transactions:
There are no materially significant related party transactions made by the company with
Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict
with the interest of the company at large. Thus disclosure in Form AOC-2 is not required.
v) No Loans/Guarantees / Investments under Section 186 of the Companies Act, 2013 have
been made during the year.
CORPORATE GOVERNANCE
As per the revised Clause 49 of the Listing Agreement on Corporate Governance,
Management Discussion and Analysis Report forms part of the Annual Report (Annexure - 5).
The company has complied with the Corporate Governance requirements under the Companies
Act, 2013, and as stipulated under the listing agreement with the stock exchanges. A
separate section on corporate governance under the Listing Agreement, along with a
certificate from the Practicing Company Secretary confirming the compliance, is annexed
and forms part of the Annual Report (Annexure - 2).
Corporate Social Responsibility Policy: As per Companies Act 2013, Your Company
does not fall under the Corporate Social Responsibility criteria. The Company would ensure
the provisions of the Act as and when the same is applicable.
Risk Management Policy
The Board of Directors has developed and implemented Risk Management Policy for the
Company. It has identified and assessed internal and external risks, with potential impact
and likelihood that may impact the Company in achieving its strategic objectives or may
threaten its existence.
Whistle Blower Policy
The Company has in place a Whistle Blower policy for vigil mechanism for Directors and
employees to report to the management about unethical behavior, fraud, violation of
Companys Code of Conduct. None of the Personnel has been denied access to the audit
committee.
Declaration about Compliance with the Code of Conduct by Members of the Board and Sr.
Management Personnel.
The Company has complied with the requirements about Code of Conduct for Board members
and Sr. Management Personnel.
Disclosure under the sexual harassment of woman at workplace (prevention, prohibition
and redraessal) Act, 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal)
Act, 2013. Internal Complaints Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary and trained)
are covered under the Policy. The following is a summary of sexual harassment complaints
received and disposed off during each Calendar year:
a) No. of Complaints received - NIL
b) No. of Complaints disposed off - NIL
Statutory Auditors:
The Statutory Auditors of the Company viz., M/s M. Bhaskara Rao & Co., Chartered
Accountants, Hyderabad were appointed in the Annual General Meeting on 30.09.2014 for 5
years. As per the provisions of section 139 (1) of the Companies Act, 2013, the
appointment needs to be ratified by the member at the every subsequent Annual General
Meeting. The directors recommend ratification of their appointment.
The Auditors Report to the Shareholders for the year under review contains some
qualifications, to which explanations are given below.
Statement on Impact of Audit Qualifications (for audit report with modified opinion)
submitted along-with Annual Audited Financial Results - (Standalone and Consolidated
separately)
[See Regulation 33/ 52 of the SEBI (LODR) (Amendment) Regulations, 2016]
ANNEXURE I
I. Statement on Impact of Audit Qualifications for the Financial Year ended March
31,2017
| Sl. No. |
Particulars |
Audited Figures (as reported before adjusting for qualifications) |
Adjusted Figures (audited figures after adjusting for qualifications) |
| 1. |
Turnover / Total income |
|
|
| 2. |
Total Expenditure |
|
|
| 3. |
Net Profit/(Loss) |
|
|
| 4. |
Earnings Per Share |
Not determinable |
|
| 5. |
Total Assets |
|
|
| 6. |
Total Liabilities |
|
|
| 7. |
Net Worth |
|
|
| 8. |
Any other financial item(s) (as felt appropriate by the management) |
Refer Emphasis of Matter Paragraph in Auditors Report |
|
II Audit Qualification (each audit qualification separately):
1 Qualification - 1
a. Details of Audit Qualification: Qualification 1:
Note 3(a) of the Statement regarding recognition of rejections / withheld amount by
Andaman and Nicobar Administration (A&NA) - We are unable to comment on the extent of
ultimate recoverability of Rs. 13.95 Lakhs for the quarter ended March 31, 2017 and Rs.
180.68 Lakhs for year ended March 31,2017 (Quarter ended 31st Dec, 2016 Rs.145.73 Lakhs,
Quarter ended March 2016 Rs. 48.87 Lakhs, year ended March 31, 2016 Rs. 600.93 Lakhs) and
the total receivables as at March 31, 2017 - Rs. 1606.69 Lakhs (as at March 31, 2016 -
Rs.1426.01 Lakhs) which are subject to confirmation by the A&NA. Further, the Company,
in earlier years, has also recognized interest aggregating to Rs. 1275.74 Lakhs on such
rejections / with held amounts which is also subject to confirmation by the A&NA.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of qualification: Repetitive - First time reported in 2003-04
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Managements Views: Not applicable
e. For Audit Qualification(s) where the impact is not quantified by the auditor: Not
applicable
i. Managements estimation on the impact of audit qualification: Not determinable
ii. If management is unable to estimate the impact, reasons for the same: Management is
pursuing the matter and is confident of recovering the amount. In this regard, Honorable
Supreme Court of lndia vide its Order dated 10th May 2016, Ordered A & N
Administration to deposit an amount of Rs. 15 Crores with Supreme Court for the purpose of
consideration of interim relief.
iii. Auditors Comments on (i) or (ii) above: Nil
2 Qualification - 2
a. Details of Audit Qualification: Qualification 2 Note 3 (d) of the Statement
regarding capital advances aggregating to Rs.852.66 Lakhs (Previous Year - Rs. 884.28
Lakhs) considered good and fully recoverable for the reasons stated therein. We are unable
to comment on the extent of ultimate recoverability.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of qualification: Repetitive - First time reported in 2014 - 15
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Managements Views: Not applicable
e. For Audit Qualification(s) where the impact is not quantified by the auditor: Not
applicable
i. Managements estimation on the impact of audit qualification: Not determinable
ii. If management is unable to estimate the impact, reasons for the same: The Company
has advanced for the purpose of refurbishment of DG sets for 20 MW Power Plant situated at
Bamboo flat in Andaman & Nicobar Islands. The company is making efforts to carry out
the refurbishment of DG sets.
iii. Auditors Comments on (i) or (ii) above: Nil
3 Qualification - 3
a. Details of Audit Qualification: Qualification 3
Note 3 (e) of the Statement regarding non-accounting of interest expense on borrowings
availed by the Company. We are unable to comment on the extent of shortfall in interest
expense for the quarter and year ended March 31,2017 and also regarding cumulative
liability up to March 31, 2017
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of qualification: Repetitive - First time reported in 2014 - 15
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Managements Views: Not applicable
e. For Audit Qualification(s) where the impact is not quantified by the auditor: Not
applicable
i. Managements estimation on the impact of audit qualification: Not determinable
ii. If management is unable to estimate the impact, reasons for the same: The
management is in touch with Lenders for OTS without interest and they suggested to give a
concrete proposal and the same is under active consideration with the Lenders. Management
is confidant of resolving the issues pertaining to Lenders amicably and hence no provision
of interest has been made.
iii. Auditors Comments on (i) or (ii) above: Nil
4 Qualification - 4
a. Details of Audit Qualification: Qualification 4
Note 3 (f) of the Statement regarding confirmation of balances from Secured /Unsecured
Loan Lenders; Trade Payables; Creditors for Capital works/goods; Loans and Advances given
by the Company. We are unable to comment on the extent of adverse variances, if any.
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of qualification: Repetitive - First time reported in 2014 - 15
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Managements Views: Not applicable
e. For Audit Qualification(s) where the impact is not quantified by the auditor: Not
applicable
i. Managements estimation on the impact of audit qualification: Not determinable
ii. If management is unable to estimate the impact, reasons for the same: The
Management is confident of convincing all secured creditors, trade creditors and to make
OTS and settle their accounts as most of the creditors are known to the management and
they would listen to the versions of the management. Hence, no confirmations have been
obtained from all the creditors.
iii. Auditors Comments on (i) or (ii) above: Nil
Signatories:
• CEO/Managing Director
• CFO
• Audit Committee Chairman
• Statutory Auditor
Place:
Date:
Secretarial Audit:
The Board had appointed M/s L D Reddy & Co, Company Secretaries in Whole-time
Practice, to carry out Secretarial Audit under the provisions of Section 204 of the
Companies Act, 2013 for the financial year 2016-17. The report of the Secretarial Auditor
is annexed to this report as Annexure - 3.
The Secretarial Auditors Report to the Shareholders for the year under review contains
some qualifications, to which explanations are given below.
| Secretarial Auditors Qualification |
Boards explanation |
| An Inquiry was initiated under section 7A of the EPF & MP ACT 1956 against the
company |
Due to non receipt of receivables from our customers, i.e. Electricity Department of
Andaman and Nicobar Administration, there are some defaults and efforts are being made to
regularise the same |
| The company has defaulted in payment of Bank Dues, Therefore SBI Global Factors
Limited has filed a petition before Honble High Court of Andhra Pradesh for winding up of
the company |
Due to non receipt of receivables from our customers, i.e. Electricity Department of
Andaman and Nicobar Administration, there are some defaults and efforts are being made to
regularise the same |
| The company is not regular in paying statutory dues like PF, Gratuity, TDS, Service
Tax, Sales Tax, etc., |
Due to non receipt of receivables from our customers, i.e. Electricity Department of
Andaman and Nicobar Administration, there are some defaults and efforts are being made to
regularise the same |
| As plant is located in Andaman and Nicobar Island, Physical Verification was not done,
therefore we are unable to report on the compliance of Labour laws at Factory Site. |
Efforts are being made to comply with the Labour Laws at the Factory site. |
| Court cases are filed against the company, Directors and other guarantors for default
of payment of dues to bank and to other unsecured creditors |
Discussions are on with the Bankers to sort out the issue. |
| Court Cases are filed by the company to recover debts and to safeguard its business |
They are to safeguard the business of the Company only. |
| The coal investment made in SGVL could not be recovered so far from Indonesia. Out of
US$ 190.00 lacs, the management could recover only US$ 25.91 lacs and the balance is yet
to be recovered |
Efforts are being made to recover the balance amount also. |
Cost Auditors:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 , M/s. kju &
Associates, Practicing Cost Accountants (Firm Regn. No.000474), have been appointed to
conduct audit of cost records of Power (Electricity) for the year 2017-18.
Cost Audit Report will be submitted to the Central Government within the prescribed
time.
Conservation of Energy, Technology Absorption & Foreign Exchange Earnings And
Outgo:
The statement giving the particulars with respect to Conservation of Energy, Technology
absorption and Foreign Exchange Earnings and outgoings as required under Section 134 of
the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 is annexed hereto at
Annexure - 4 and forms part of the Report.
Fixed deposits:
During the year under review, your Company has neither invited nor accepted any
deposits from the public.
Insurance:
The properties of your Company including its buildings, plant and machinery and stocks
have been adequately insured as required.
Particulars of Employees and related disclosures
The information required under Section 197 (12) of the Companies Act, 2013 read with
Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
may be treated as NIL.
Personnel & Industrial Relations:
Relations between employees and the management continued to be cordial during the year.
The Human Resource Department is committed in its quest to improve and maintain employee
morale and satisfaction at all levels.
Acknowledgments:
Your Directors would like to express their grateful thanks for the assistance and co-
operation received from the Financial Institutions, Banks, Government Authorities,
Customers, Vendors and Members during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the excellent services of the
executives, staff and workers of the company.
|
For and on behalf of the Board of Directors |
|
|
Dr. S.M. Manepalli |
Mr. K. Vijay Kumar |
|
Managing Director |
Executive Director |
| Place: Hyderabad. |
|
|
| Date: 14.09.2017. |
|
|
+91-9892691696
