DIRECTORS' REPORT To The Members Your Directors have pleasure in presenting their 36th Annual Report on the Business and Operations and the accounts for the Financial Year ended 31st March, 2015 of the Company. 2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS The highlights of the Company's performance are as under: • Revenue from operations increased by 17.05% to Rs. 69,64,73,967 • Profit before tax increased by 46.90% to Rs. 2,54,29,521 > • Net profit increased by 46.91 % to Rs. 2,03,43,521 • Sales increased by 18.80% to Rs. 69,58,00,526 3. PROPOSED TRANSFER TO GENERAL RESERVES As per section 134(3) (j) of Companies Act, 2013, the amount of Rs. 25 lacs has transferred to the General Reserve. 4. DIVIDEND The Directors recommended dividend of Rs. .80/- i.e. 18% per share on Equity shares for the year ended 31st March 2015, which will attract dividend tax of Rs. 11.69 lacs. The total payout will be Rs. 58.54 lacs. 5. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT Company has resumed the remaining Construction Work of the Mall Project at P.O. Ramdaspura, Jalandhar from February, 2015. The Company alongwith M/s. EMAAR MGF Land Limited has inked an Agreement with M/s. Shalimar Corp Limited to carry on the further development work of the Project. The Construction activities for the Completion of the said Project have now been put into operation and necessary steps have been taken to complete the said project at the earliest. 6. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There is none of the above mentioned order(s) which impacts the going concern status and company's operations in future. 7. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY FOR THE COMPANY The Company has adopted measures concerning the development and implementation of a Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself are as follows:- a. High competition from East European countries and other Asian countries. b. Lack of strong presence in the global fashion market. c. International price fluctuation. d. Lack of warehousing support from the "government. 8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure "A" and is attached to this report. 9. CORPORATE SOCIAL RESPONSIBILITY The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. 10. EXTRACT OF ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure "B" as Form MGT-9 and is attached to this Report. 11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES The particulars of Contracts or Arrangements made with related parties pursuant to Section 188 of Companies act, 2013 is furnished in Annexure "C" as Form AOC-2 and is attached to this report. 12. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement that:- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The directors had 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 and loss of the company for that period; (c) The directors had 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) The directors had prepared the annual accounts on a going concern basis; and (e) The directors had 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. 13. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. 14. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review, no amount of principal or interest was outstanding as on the date of balance sheet. 15. BOARD MEETINGS, BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL & COMMITTEES OF DIRECTORS a) Board Meetings The Board of Directors of the Company met 9 (nine) times during the financial year 2014-15. The details of various Board Meetings are provided in the Corporate Governance Report. b) Changes In Directors And Key Managerial Personnel Mr. Lajpat Sangwan was appointed as additional director in a company w.e.f. 23.12.2014 and who holds office up to the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing the candidature as an Executive Director. During the year, following are appointed as KMPs of company:- 1. Mr. Atamjit Singh Bawa (Managing Director) 2. Mr. Ramesh Chand Sharma (Chief Financial Officer) 3. Mr. Amit Kumar (Company Secretary)* 4. Ms. Megha Gandhi (Company Secretary)** *Mr. Amit Kumar had resigned from the post of Company Secretary-cum-Compliance Officer and KMP of a Company w.e.f. 15.06.2015. ** Ms. Megha Gandhi has appointed for the post of Company Secretary-cum-Compliance Officer and KMP of a Company w.e.f. 01.08.2015 & 13.08.2015 respectively.. c) Independent Directors The following Independent Directors who were re-appointed as per the provisions of Companies Act, 2013, at the 35th Annual General Meeting held on 29th September 2014 for a period of 5 (five) years, till the conclusion of 40th Annual General Meeting to be held in the calendar year 2019 as under:- • Mr. Gurcharan Singh • Mr. Surat Singh Bajwa • Mr. Gurendra Singh Bedi The Company has received declarations from all the Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the above Act. d) Details of Ratio of Remuneration to Directors The information relating to remuneration of directors as required under Section 197(12) of the Act, is given in AnneXure "D" and is attached to this Report. e) Board Committees The Board has constituted 4 committees which are as follows:- 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholders' Relationship Committee 4. Risk Management Committee ,» f) Board Evaluation As required under the provisions of Section 134(3)(p) and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and the manner in which such performance evaluation was carried out is as under: The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration Committee shall carry out evaluation of Director's performance. The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he/she is a member/ general meetings, participation constructively and actively in the meetings of the Board /Committees of the Board, etc. i) Vigil Mechanism The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. The reportable matters may be disclosed to the Ethics and Compliance Task Force which operates under the supervision of the Audit Committee. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employee was denied to have access for the same. j) Related Party Transactions All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no other material 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. 16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS As per Section 186 of the Companies Act, 2013, no loans, guarantees and investments made by the company during the financial year 2014-15. 17. STATUTORY AUDITORS M/s Y.K. Sud & Co., Jalandhar, Chartered Accountants who are the Statutory Auditors of the Company hold office as Statutory Auditors until the conclusion of the 38th Annual General Meeting of the Company to be held in the calendar year 2017. Their appointment is subject to ratification by the members at the 36th Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. 18. CORPORATE GOVERNANCE Your Company has been complying with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. A separate report on Corporate Governance along with Auditors' certificate on compliance of the Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report. The Register of Members and Share Transfer books of the company will be closed with effect from Wednesday, 23rd September, 2015 to Tuesday, 29th September, 2015 (both days inclusive). 19. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of the complaints received and disposed off during the financial year 2014-15: (a) No. of complaints received: NIL (b) No. of complaints disposed: NIL 20. LISTING FEES The Company confirms that it has paid the annual listing fees for the financial year 2015-16 with its Stock Exchange(s). 21. ACKNOWLEDGEMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. By Order of the Board of Directors , of Sarup Industries Ltd Manjit Bawa Atamjit Singh Bawa Chairperson Managing Director Place: Jalandhar Date: 28.08.2015 |