DIRECTORS' REPORT To The Members Your Directors have pleasure in presenting the 9th Annual Report and the Audited Statement of Accounts for the financial year ended 31st March, 2015, together with the Auditors Report thereon. OPERATIONS: During the year under review, the Income from Operations is Rs.1,253,863,534 as against Rs. 1,263,965,973 for the corresponding previous year. The Profit Before Tax is X Rs. 101,839,371 as against Rs. 53,535,551 for the previous year. The Profit After Tax is Rs. 84,356,136 as against Rs. 30,349,680 for the corresponding period. The Basic Earnings Per Share for the year-ended 31.03.2015 is Rs. 1.71 as against Rs. 0.62 for the corresponding previous year ended 31.03.2014. DIVIDEND: Your Directors are pleased to recommend Dividend @ 10% (Rs. 0.50 per equity share of face value of Rs. 5/- each) for the financial year 2014-15. The total cash outflow on account of dividend on equity shares for the financial year 2014-15 would aggregate to Rs. 2,95,23,300 (inclusive of tax thereon). RESERVES During the year the Company has transferred an amount of Rs. 10,000,000 to General Reserves Account. PERFORMANCE AND FUTURE BUSINESS PLAN: The performance during the financial year under review has shown considerable improvement with an increase of 49% in EBIDTA and 177.95% in the Net Profit over the previous year. The export sale also has shown improvement with 88.63% over the previous year. The government is also encouraging local manufacture by reservation of the power projects under DCR category and to take benefits of the same. The Company has taken steps to commission the cell lines it has imported earlier. FIXED DEPOSITS: The Company has not accepted or invited any Deposits and consequently no deposit has matured/ become due for repayment as on 31st March 2015. DIRECTORS: In terms of the provisions of Section 149 of Companies Act, 2013 and clause 49 of the Listing Agreement, Smt. Madhumathi Suresh has been appointed as Additional Director of the Company in the category of Independent Woman Director w.e.f 23.03.2015 based on the recommendation of Nomination and Remuneration Committee. Pursuant to Section 161(1) of the Act, Smt. Madhumathi Suresh holds office up to the date of forthcoming Annual General Meeting of the Company and is eligible for appointment as Director. The Board recommends their appointment and accordingly resolution seeking approval of the members for their appointments has been included in the Notice of forthcoming Annual General Meeting of the Company along with their brief profile. Shri G.M. Surana, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Further, there has been no change in the circumstances which may affect their status as independent director during the year. Shri Ramaiah Alapakam has resigned from the office of Whole-Time Director and the Board of Directors accepted his resignation w.e.f. 11.02.2015. The brief particulars of the Directors seeking appointment/re-appointment at this Annual General Meeting is 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 Manish Surana, Director Finance & Technical/ Whole-time Director and Shri. Badarish H Chimalgi, Company Secretary were formalized as the Key Managerial Personnel of the Company. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation taking into consideration of various aspects of the Board's functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process. 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 Remuneration Policy is stated in the Corporate Governance Report. MEETINGS During the year 5 (five) Board Meetings and 4 (four) Audit Committee 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 Clause 49 of the Listing Agreement. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's 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 as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee 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 Company's website. The particulars of contracts and 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-III" to this Report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT: There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations. AUDITORS Statutory Auditors Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s Sekhar & Co, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 8th Annual General Meeting of the Company held on 22nd September, 2014 till the conclusion of the 13th Annual General Meeting to be held in the year 2019, subject to ratification of their appointment at every AGM. 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 2015-16. 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. Secretarial Auditors 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 M/s. Rakhi Agarwal & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Report of the Secretarial Audit Report is annexed herewith as "Annexure-V". Internal Auditors M/s Luharuka & Associates, Chartered Accountants performs the duties of internal auditors of the Company and their report is reviewed by the Audit Committee from time to time. ISO 9001-2008 CERTIFICATION Your Company continues to hold ISO 9001-2008 Certification by meeting all the requirements of Certification from time to time. CORPORATE SOCIAL RESPONSIBILITY (CSR) Surana Group recognises the importance of contributing to the society in a meaningful way. An urge to serve the society and to bring change in the living of the people, Surana Group had taken an initiative in this direction and the journey was embarked in the year 1987 by Shri G. Mangilal Surana in the memory of his father Shri Gulab Chand Surana by starting a hospital "Gulab Chand Surana Charitable Hospital" The Gulab Chand Surana Charitable Hospital is engaged in community and social initiatives and plays an active role in serving rural community. Vision, Mission and Core Values : Vision: To serve each patient with compassion and love as we would do to our loved ones. Mission: To develop, maintain and continuously improve our quality resources to the society by providing better care for better future. Core value: • Compassion • Commitment to Quality • Working Together • Respect for the Individual Gulab Chand Surana Charitable Hospital believes in 'Commitment to Care' and the initiative of this stands as the testimony. The main objective of this foundation is to provide health care services to the people below and on poverty line. It was founded as a clinic in 1987, and in the year 2011 it was converted to hospital.The hospital now covers 6000 sq ft area. It is being managed by 5 doctors and 10 assistants and with a provision of 10 beds. It has even added Physiotherapy centre in 2011. In the first year of the journey 25,079 patients were treated and the number has increased consistently and till date 2015, the total number of patients treated in the hospital are 9,42,936. Former Years of Gulab Chand Surana Charitable Clinic : The idea to start this foundation was to reach out to the rural community as they had no access to the proper medical facilities and to be a helping hand to them and this passion was turned into action by taking the first step in the year 1987 by establishing Gulab Chand Surana Charitable Clinic. The clinic was built on 1200 sq ft area. It had 2 permanent doctors, who were provided residence in the clinic so there could be 24/7 service for the people and 5 staff members to take care of the daily activities. There were only 3 to 4 beds available with 80 to 90 patients treated daily, who came from 25kms of the radius to visit the clinic and avail the services. There were weekly camps held such as eye care, dental care and various vaccination for children and even skin diseases were taken care of. Current activities in Gulab Chand Surana Charitable Hospital : With 28 years of services for the people, Gulab Chand Surana Charitable Clinic has immensely grown. Presently the hospital has grown to 6000 sq ft area with 5 doctors and 10 staff members. The small steps have taken a large leap in the foundation and the passion to serve people has emerged and is increasing. The general clinic has even added a physiotherapy centre and weekly camps now even include thyroid checkup, heart care tips, blood grouping, glucose provision and much more. The only thing that remains constant in all these years is the trust of the people towards the foundation and till date 9 lakhs plus patients are treated here. Future Years : Gulab Chand Surana Charitable Hospital still yearns to grow more and by providing every possible services under one roof to its people with the best quality. Future plans of the hospital includes - opening an eye care centre and a thyroid centre by providing daily services rather than weekly camps. It even desires to include specialised doctors in various fields so the rural community has an access to it in the right means. Management: Gulab Chand Surana Charitable Hospital is located at Bollarum village. The charitable clinic is founded by Sri G.M. Surana, Chairman - Sri Narender Surana, Vice Chairman -Sri Devendra Surana, Secretary - Sri Anand Swarup Bora and 6 Executive Committee members. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the stock exchanges, is presented in a separate section forms part of the Annual Report as Annexure-II. CORPORATE GOVERNANCE The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance enunciated in Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on corporate governance practices followed by the Company together with a Certificate from the Company's Auditors confirming compliances forms an integral part of this Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-IV". 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. RISK MANAGEMENT The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management policy/plan for the Company and ensuring its effectiveness. The Risk Management Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. 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. VIGIL MECHANISM / WHISTLE BLOWER POLICY In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. This policy is posted on the website of company. HUMAN RESOURCES: Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement. DIRECTORS' RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review; c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the Directors have prepared the accounts for the financial year ended 31st March 2015 on a 'going concern' basis; e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and f) That devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 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. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company received no complaints on sexual harassment. 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. 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 Board's Report and the Management Discussion & Analysis describing the Company's 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 Company's 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 Board desires to place on record its sincere appreciation for the support and co-operation received from the Company's Bankers and Officials of the concerned Government Departments, Employees and the Members for the confidence reposed by them in the management. For and on behalf of the Board of Directors NARENDER SURANA MANAGING DIRECTOR DEVENDRA SURANA DIRECTOR Place : Secunderabad Date : 06.08.2015 |