To The Members of S S ORGANICS LIMITED
The Directors are pleased to present the 19th Annual Report of the
Company together with the Audited financial State- ments for the year
ending 31st March, 2012
(Rs. In lacs)
For the year ending Previous period
(12 months) (12 months)
Total Income - -
Profit/ (Loss) before Financial
Expenses and Depreciation (23.59) (15.05)
Profit/ (Loss) after Financial
Expenses and Depreciation (23.59) (15.05)
Less : Prior Year Adjustments - -
Profit / (Loss) for the year
Before taxation. (23.59) (15.05)
Less: Deferred Tax Liability - -
FBT - -
Profit / (Loss) after Tax (23.59) (15.05)
The dispute raised by erstwhile Director, namely Mr.B.Subba Reddy has
affected the company on various fronts viz. ex- pansion, availability
of working capital, own production and sales, tie-ups with large
companies etc., Further, the AP Pollution Control Board has issued
closure order of the fac- tory of the company on 19th November, 2005,
which the com- pany successfully got revoked on 10.02.2006. Again the
A.P.Pollution Control Board closed the unit on 15.04.2006 due to the
instigation by Mr. B. Subba Reddy, the then Di- rector. The
A.P.Pollution Control Board has not renewed the Consent For Operations
since 30.06.2006 to 22.10.2012. Mr. B. Subba Reddy has illegally and
forcibly occupied the company w.e.f. 20.10.2006. From the date of Mr.
B. Subba Reddy''s occupation (20.10.2006), there was no drug license,
no Consent For Operation from A.P.Pollution Control Board.
Mr. B. Subba Reddy committed number of statutory vio- lations. The
Company is under forcible and illegal occu- pation from 20.10.2006 to
All the operations of the Company came to standstill w.e.f. 20-10-2006
as the management of the Company was forc- ibly taken overby Mr.B.Subba
Reddy. Brief description of management dispute is as follows:
Mr.B.Subba Reddy has illegally and forcibly occupied the company w.e.f.
20.10.2006 under a pretext that he has been appointed as Managing
Director at the 13th Annual General Meeting which was conducted by him
on his own even though, Mr.V N.Sunanda Reddy was reappointed as
Managing Director at the properly held AGM on 20-10- 2006. Mr.B.Subba
Reddy illegally occupied the factory and other assets of the Company
till 15-05-2012 misrep- resenting himself as Managing Director.
An Extra Ordinary General Meeting was held under the observation of the
Advocate Observer appointed by the Hon''ble High Court of Andhra Pradesh
on 26.06.2011. At the said meeting all the resolutions unanimously as
pro- posed in the notice calling the meeting issued by Mr. V.N.
Sunanda Reddy were approved. It is worthwhile to note that the said
Extra Ordinary General Meeting was attended by shareholders holding
53,79,770 shares rep- resenting 52.73% of the total equity capital of
1,02,01,300 shares of SSOL. The Advocate Observer filed his report with
the Hon''ble High Court of Andhra Pradesh on 29.06.2011.
In a Company Petition No.14/2007 with Hon''ble Com- pany Law Board,
Additional Principle Bench, Chennai, has held all the acts of
Mr.B.Subba Reddy as null and void. Therefore, the Company is no way
responsible/ li- able for all acts, transactions, operations and other
fill- ings done by Mr.B.Subba Reddy during his illegal occu- pation.
Mr.B.Subba Reddy challenged the said Order of Hon''ble Company Law
Board in the Hon''ble High Court of A.P. which has been dismissed
upholding the Order of Hon''ble Company Law Board.
According to the said Orders the acts & transactions done, bank
accounts operated, various statutory returns filed misrepresenting the
facts by Mr.B.Subba Reddy during his illegal occupancy of factory are
null and void. Accordingly the Company is no way responsible or liable
for any of those acts or transactions or any other.
Mr.B.Subba Reddy has misappropriated some of the assets & funds and
brought the plant & equipment to a dilapidated condition without proper
usage and maintenance. Due to lack of proper security to the plant &
machinery valuable items have been removed. The Company has filed a
private criminal & civil complaint against Mr.B.Subba Reddy to re-
cover the damages caused to the Company.
In view of the above, financial statements have been pre- pared in all
material respects and in line of the Orders of Hon''ble Company Law
Board in the Company Petition No. 14/2007 by Mr.V N.Sunanda Reddy
whose, position as Man- aging Director has been upheld by the said
On 16.05.2012, Mr. V N Sunanda Reddy, the present Man- aging Director
has taken possession of the company and immediately started the revival
work. At the time of taking possession it was observed that the
machinery and equip- ment of the company are in dilapidated condition.
All the cables, transformer, CTPT, MCC & PCC panels are tam- pered. The
Auxiliary equipment of Reactors such as digital thermometers, Censors,
Push Button stands are removed / sold out. Similar is the fate of
Generators, Nitrogen Plant, Air Compressors, and (3) chilling plants.
At the time of tak- ing possession it is observed that the plant is
without any watch and ward staff. There is no stock of any raw
materials or finished goods. The same fact is also informed to Central
Excise Department vide our letter dated 16.05.2012. No statutory
records pertaining to Finance, Central Excise, sales and purchases,
Commercial Taxes, PF, ESI, Secretarial records etc, are available in
the company''s Registered Of- fice. The Registered Office is without
any watch and ward staff and without any records.
The present management infused more than Rs. 300 Lacs for revival of
the company and restored all the Machinery and Equipment. The entire
cables, lights, transformer, CTPT, MCC & PCC panels are totally
replaced and brought back the company to working condition and started
renewing all the licenses.
The present management displays photographs of plant machinery and
equiptment at the time of taking possession on 16-05-2012 and after
revival and restoration of the com- pany. The photos display the damage
done to the company during forcible and illegal occupation of the
company by Mr. B. Subba Reddy.
Now the present management is contemplating for contract manufacturing
The company is confident of resolving all the issues and to improve its
STATUS WITH BIFR:
The Net worth of the company eroded as per the audited accounts as on
31.03.1996 and hence a reference was made to Hon''ble Board for
Industrial and Financial Re- construction (BIFR) as required under
Sections 15 of the Sick Industrial Companies (Special Provisions) Act,
1985 and registered as Case No. 91/97. IDBI was appointed as Operating
Agency. The Hon''ble BIFR sanctioned a Scheme for revival of sick
company (SSOL) vide its or- ders dt. 12.02.2002. The Board subsequently
sanctioned a modified scheme vide its order dt. 27.01.2005. The company
cleared the SBI and IDBI dues through One Time Settlement in 2002 and
Meanwhile on 20.10.2006, Mr. B. Subba Reddy, the then Director and
share holder of the Company illegally and forcibly occupied the
Company. Aggrieved by the actions of Mr. B. Subba Reddy, Mr. V. N.
Sunanda Reddy ap- proached the Hon''ble Company Law Board by filling
Com- pany Petition No: 14 of 2007. The Hon''ble Company Law Board vide
its Judgment dt. 14.08.2009 allowed Com- pany Petition and held that
all the actions of Mr. B. Subba Reddy are null and void. Mr. B. Subba
Reddy has chal- lenged the Hon''ble Company Law Board order by filling
a Company Application No: 22/09 before Hon''ble High Court of A.P. The
Company application was dismissed uphold- ing the orders of Hon''ble
Company Law Board on 22.02.2012. Mr. V. N. Sunanda Reddy has taken
re-pos- session of the company on 16.05.2012 and started reno- vation
of the company. The Civil Court at Sanga Reddy, Medak Dist, on a suit
filed by Mr. V. N. Sunanda Reddy in an interim order prohibited Mr. B.
Subba Reddy in in- terfering with the management of the company. These
fact were also reported to the Hon''ble BIFR.
The Hon''ble BIFR in its proceedings dt. 29.03.2012 di- rected IDBI
which is a Monitoring Agency to submit a comprehensive status report
along with its comments on the Company. The IDBI submitted its report
to BIFR on 21.09.2012.
The Company has already submitted a draft Revival Scheme indicating
that the present management is ready to induct upto Rs. 4,00,00,000/-
(Rupees Four Crores Only) for the revival of the company and requested
for several reliefs. The next hearing of BlFR is on 11.04.2013.
STEPS TAKEN FOR STATUTORY IRREGULARITIES COMMITTED BY MR.B.SUBBA REDDY
01. Mr.B.Subba Reddy purposefully has not conducted any AGM''s for
the Years 2006-2007, 2007-2008, 2008-2009, 2009-2010,2010-2011 and 2011
-12 as required under Sec- tion 166 of Companies Act, 1956 as he did
not have any majority share holders support. The Registrar of Compa-
nies has also served a notice for non-conducting AGM''s. Now the
present management has completed the audit of accounts and finalized
all the pending annual reports after taking over the possession of the
Company and hence the present AGM''s.
02. The Bombay Stock Exchange has suspended the company''s scrip on May
2012 for not filling the financial statements and requisite fee for the
last five years. The management had paid pending dues of Rs.1,09,000/-
on 03.06.2012 and submitted a detailed report with a request to revoke
the suspension. The matter is still pending.
03. The consent for operation granted byAP Pollution Con- trol Board
has lapsed on 30.06.2006 and has not been re- newed till date. The
Consent fee for the last 6 years was not paid by Mr.B.Subba Reddy. The
management has paid consent fee of Rs.3,86,228/- and obtained CFO on
04. The drug license issued byAP Drug administration has lapsed on
31.12.2006 and has not been renewed by Mr.B.Subba Reddy . On the
request of the management the Drug Inspection has been completed and
drug license will be issued shortly.
The power connection has been disconnected by AP Central Power
Distribution on 19-12-2009 for failure to clear the current dues and AP
central Power Distribution has adjusted the existing deposit of the
company and still Rs. 14.00 Lacs is due. The management has cleared the
dues and power was reconnected on 28.11.2012.
05. The two boiler licenses expired on 01-09-2008 and 01- 11 -2009
respectively and the Boiler licenses have been now renewed.
06. During the period of Mr.B.Subba Reddy''s management the Inspector
of Factories issued a demand notice for li- cense fee and as well as
for cancellation of factories li- cense. The management paid the
requisite fee and renewed the factories license on the Dt. 08.08.2012.
07. Mr.B.Subba Reddy has never insured the current and fixed assets of
the company. The present manage- ment has insured the company''s
assets on 14th Dec 2012 by paying premium of Rs.1,75,000/-
08. The ISO Certificate which was valid up to 22-09-2008 was not
renewed and even the WHO cGMP certificate is also lapsed. The present
management is taking steps for renewal of the said license.
09. The commercial tax department has served a final assessment orders
and subsequently attached the landed property of the company by its
orders dated 13- 04-2012, for an amount of Rs.227 lacs. It is informed
that Mr.B.Subba Reddy has not properly filed the re- turns and
submitted any C Forms. He has also not paid the tax deferment dues
during his tenure. Because of which several notices were given. After
taking posses- sion of the company on 16.05.2012 Mr.V N Sunanda Reddy
had addressed letter to Commissioner and Deputy Commissioner of
Commercial Taxes Department, to grant permission to submit C, F & H
Forms and requested to place the attachment orders in abeyance till the
ac- tual tax liability is arrived at. The Commissioner vide his letter
dt. 11.07.2012 allowed us to submit the statutory forms and all the
dues up to the cutoff date of the BIFR Scheme. After arriving at
revised tax liability we requested to allow to pay the tax dues in
monthly installments, the Deputy Commissioner has agreed in principle
for giving installments. We are in regular touch with Deputy Com-
missioner for revising the dues and for installments.
10. The Provident Fund commissioner has attached the immovable
property of the company vide its orders dated 05.01.2011 for non
payment of P.F. dues amounting to Rs. 15.40 lacs.
11. The ESI has also attached the immovable properties of the company
on Feb, 2010 for an amount of Rs.25.50 Lacs (Rs. 15.50 principle and
Rs. 10 Lacs as interest and penalty) for non-payment of ESI dues by
Mr.Subba Reddy. The management has filed an appeal before ESI Tribu-
nal and obtained stay orders.
12. The building tax to village Panchayath was not paid since 2006.
The special officer Aroor village Panchayat has served a notice on
27.07.2012 for a tax amount of Rs.5.00 Lacs. The present management has
requested for revision in the building tax and the matter is in the
Mr. P. Ramachandra Gupta, Mr. N. Gangi Redddy, Mr. Y.V. Ratna Kumar
and Dr. D. Sadasiva Reddy as directors and Mr. V.N. Sunanda Reddy as
Managing Director were ap- pointed at the Extra-Ordinary General
Meeting held on 26th June, 2011 underthe observation of the Advocate
Observer appointed by the Hon''ble High Court of Andhra Pradesh on 26th
Dr. D. Sadasiva Reddy and Mr. P. Ramachandra Gupta retire by rotation
at the ensuing Annual General Meeting and be- ing eligible offers
themselves for reappointment. Mr. Y.V. Ratna Kumar has expressed his
inability to continue as a director after the conclusion of the ensuing
Annual General Meeting for the financial year 2011-12. The Board placed
on record its appreciation to Mr. Y.V. Ratna Kumar for his valuable
service and guidance to the Company during his tenure.
PARTICULARS REQUIRED U/S 217(2A) OF THE COMPA- NIES ACT, 1956, R/W THE
COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER
REVIEW ARE AS UNDER:
No employee of the Company was in receipt of remunera- tion, during the
financial year 2011-2012, in excess of the sum prescribed under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employ- ees) Rules 1975 as amended.
The Company has not accepted any deposits which cover under the section
58A of the Companies Act, 1956.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956 Your
Directors'' confirm that:
i. In preparation of annual accounts for the financial year ended 31s1
March, 2012 the applicable Accounting Stan- dards have been followed.
ii. The Directors have selected such accounting policies and applied
them consistently and made judgments and esti- mates that are
reasonable and prudent so as to give a true and fair view of the
Company at the end of the finan- cial year ended 31st March, 2012 and
of the profit and loss of the Company for the year.
iii. The Directors have taken proper and sufficient care for their
maintenance of adequate accounting records in accordance with the
provisions of the Company Act, 1956 for safeguarding the assets of the
Company and for pre- venting and detecting fraud and other
iv. The Directors have prepared the annual accounts on a going
CONSERVATION OF ENERGY, TECHNOLOGY AB- SORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217 (1) (e) of the Companies Act, 1956 read
with Companies (Disclosure of particu- lars in the Report of Board of
Directors) Rules, 1988, the information is given as Annexure to this
Your Company has complied with the requirements of Clause 49 of the
Listing Agreement entered with the Stock Exchanges. Report on Corporate
Governance including Auditor''s certificate on compliance with the
code of Cor- porate Governance under Clause 49 of the Listing Agree-
ment is enclosed as Annexure to this report.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on the Management Discussion and Analysis for the year under
review is annexed hereto and forms part of the Annual Report.
M/s. VDNR & Associates, Chartered Accountants have been appointed as
Staturoty Auditors of the Company to hold office until the conclusion
of Annual General Meet- ing to be held for the financial year 2011
-2012 at the ex- tra-ordinary general meeting held on 18 March, 2013.
As such M/s VDNR & Associates, Chartered Accoun- tants will continue to
hold office until the conclusion of Annual General Meeting to be held
for the year 2011-12.
Your Directors wish to exprerss their gratitude to the Central and
State Governments, investors, analysts, fi- nancial institutions,
banks, business associates and customers, the medical profession,
distributors and sup- pliers for their whole-hearted support. Your
Directors com- mend all the employee of your Company the their contin-
ued dedication, significant contributions, hard work and commitment.
For and on behalf of the Board of Directors
VN SUNANDA REDDY