Directors' Report To, The Members, Suraj Industries Ltd Your Directors are delighted to present their Report on Company's Business Operations along with the Audited Statement of Accounts for the Financial Year ended March 31, 2015. OPERATIONAL PERFORMANCE: During the financial year 2014-15, the Company has recorded revenue of Rs. 105,108. The Company has earned net profit of Rs. 21,712 during the year as compared to net loss of Rs. 120,454 in the last year. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK The Company is exploring various business avenues to restart operations in the Company which can give it steady returns in the long run. DIVIDEND In view of Financial Results of the Company, your Directors, are unable to recommend any dividend for the year under review.. AMOUNTS TRANSFERRED TO RESERVES: Due to inadequate profits, the company has not transferred any amount to reserves. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mr. J K Jain, Director of the Company, is liable to retire by rotation and being eligible, offers himself for re-appointment. Mr.J.K Jain is not disqualified under Section 164(2) of the Companies Act,2013. Mr.Narendra Singh Bisht has been appointed as non-executive independent director by the Board of Directors of the Company for a term of 5 years commencing from November 14, 2014 in pursuance of the section 149, 152 and 161(1) read with Schedule IV and all other applicable provisions of the Companies Act 2013 and the Companies (Appointment and Qualification of Directors), Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force). During the year under review, Mr.PradeepGupta, Whole Time Director ceased to be a Director of the Company with effect from November 14,2014. Ms.SuchiBahl has been appointed as Non-Executive Director on the Board of Directors of the Companyw.e.f February 14, 2015 EXTRACT OF THE ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure A" DIRECTORS RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i) That in the preparation of the Annual Accounts for the year ended March 31, 2015, the applicable Accounting standards have been followed and that there are no material departures. ii) 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 as at March 31, 2015 and of the profit or loss of the Company for the Financial year ended March 31, 2015. iii) 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. iv) With the closure of all the business segments as mentioned in Note no. 1 under Basis for Qualified Audit Opinion of Auditor's Report, the accounts have been prepared not following the going concern assumption and all expenses of revenue nature incurred during the year relating to above segment have been charged off to Profit & Loss Account. v) 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. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. MATERIAL CHANGES AND COMMITMENTS No material changes and commitments affecting the financial Position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report. AUDIT COMMITTEE The details of the Audit Committee including its composition and terms of reference are mentioned in the Corporate Governance Report which forms part of the Director Report. The Board, during the year under review, had accepted all the recommendations made to it by the Audit Committee.. AUDITORS M/s Satendra Rawat & Company, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of ensuing Annual General Meeting and your Directors recommend their re-appointment. The company has received the requisite certificate from M/s Satendra Rawat & Company, Chartered Accountants to the effect that their re-appointment, if effected, would be in accordance with the provisions of Section 139 (2) of the Companies Act, 2013 and Rules made there under. AUDIT REPORT The Auditor had pointed out certain remarks, which are replied by the Board of Directors hereunder: Auditors Remark - 1 In the Auditor Report under point no. 1 of Basis for Qualified Audit Opinion, it has been stated that "Attention is drawn to note no. 1(a) and note 14 of the Balance Sheet to the effect that these accounts have been prepared without following the going concern assumption on the closure & cessation of the two business segments by the Company and disposal of major assets of these discontinued segments in preceding years". Board's Reply As the members are aware that the Company has exited from the edible oils business due to adverse market conditions and bleak prospects & all the workers and the employees employed at the factory at Sansarpur Terrace had resigned voluntarily. Thereafter looking at the bleak prospects, the Company had sold off its assets at the factory after taking permission from the members of the Company, to pay off its liabilities. Thereafter the Company ventured into marketing and distribution of liquor but the same has also been discontinued. Since at present the Company had no continuing business except for the liquidation/realization of the liabilities/assets of the previous businesses, the accounts of the Company have been drawn without following the going concern assumption. Auditors Remark - 2 In the Auditor Report under point no. 2 of Basis for Qualified Audit Opinion, it has been stated that "Company has a sum of Rs. 6.38 lacs as recoverable advances on account of sales tax and income tax refunds, which in view of long time lag, in our opinion, are not realisable and should have been written off. Therefore, the profit of the year and current assets are shown more by Rs. 6.38 lacs and deficit in statement of profit and loss account is shown less to that extent". Board's Reply The company is pursuing the recovery of these dues from Sales Tax & Income Tax Department. In view of this, these amounts have not been written off as non- recoverable. SECRETARIAL AUDITOR Pursuant to 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. Monika Kohli, Company Secretaryin Practice to undertake the Secretarial Audit of the Company for financial year 2014-15. The Secretarial Audit Report in prescribed form MR-3 for Financial Year 2014-15 forms part of the Annual Report as "Annexure B" to the Board Report. SECRETARIAL AUDIT REPORT The Secretarial Auditor had pointed out certain remarks, which are replied by the Board of Directors hereunder: Secretarial Auditors Remark - 1 The Company has not appointed any executive director in terms of provisions of Listing Agreement. Board's Reply Since the Company is not doing any business activity for many years therefore there was no person who has shown his interest to become the Whole Time (Executive) Director in the Company, However your management is taking steps to appoint executive director to comply the requirement of law. The Management has identified some person and is in the process of selection the candidate for the post of Whole Time Director. It is expected that Company shall appoint the Whole Time Director shortly. Secretarial Auditors Remark - 2 The Company was required to appoint Internal Auditor as per the section 138 of the Companies Act, 2013 read with rule 13 of Companies (Accounts) Rule 2014. However, it is observed that no Internal Auditor has been appointed by the Company. Board's Reply Since the Company did not have any continuing business operations and the volumes of transactions are very less and the company is a loss making entity, therefore, it was not feasible to appoint internal auditor. However, the internal controls were adequately exercised. Secretarial Auditors Remark - 3 The Company was required to appoint Managing Director/Manager/ Chief Executive Officer/Whole-time Director and Chief Financial Officer (as prescribed under section 203 of the Companies Act, 2013 read with rule 8 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. However, no Managing Director/Manager/Chief Executive Officer/Whole-time director and Chief Financial Officer have been appointed by the company. Board's Reply As stated above the Company is not doing any business activity for many years therefore there was no person who has shown his interest to become the Whole Time (Executive) Director in the Company, however your management is taking steps to appoint Executive Director to comply the requirement of law. Further since there are no business activities no finance profession has shown his interest to take the position of Chief Financial Officer of the Company. The Management has identified few persons and is in the process of selection the candidate for the post of Whole Time Director and CFO. It is expected that Company shall appoint the Whole Time Director & CFO shortly. Secretarial Auditors Remark - 4 The Company is not regular in compliance of various clauses of Listing Agreement. However, it is observed that the Company do not have its own website. Board's Reply Your Company had approached the BSE Limited and made a submission for resumption of trading activity in its equity and had sought the pending Listing Compliances. Your Company has prepared and filed with the BSE Limited major pending details with respect to clauses of Listing Agreement and also in process of completing and filing the remaining documents / information with BSE. The company has taken steps towards creating and maintaining its website and soon the company will have its website containing all the required information as per Companies Act, 2013 and Listing Agreement. Secretarial Auditors Remark - 5 It was observed that tenure of Mr. Shashi Sharma, Independent Director was not fixed in the Annual General Meeting held on 30.09.2014 as per the provisions of section 152 of the Companies Act,2013. Board's Reply The company has taken the above matter in ensuing AGM for Member's approval in fixing the tenure and his period of appointment will be fixed in terms of Section 149 of the Companies Act, 2013 and Listing Agreement. Secretarial Auditors Remark - 5 It is observed that 100% equity shares of the company are in physical form and the company is yet to sign the tripartite agreement with Registrar & Depository to provide dematerialization facility to its shareholders. Board's Reply The Board has already taken steps in this respect by passing board resolution on 29th May, 2015 for converting shares into De-mat form and shallexecute the tripartite agreement with the NSDL/CDSL and Registrar & Share Transfer Agent shortly. SHARE CAPITAL During the year, there has been no change in the authorised, subscribed and paid-up share capital of the Company. As at March 31, 2015, the paid-up share capital stood at Rs7,34,30,000 comprising of 73,43,000 equity shares of 10 each. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has established an adequate internal control procedure which commensurate with the size of the Company and the nature of its business for the purpose of purchase and sale of goods, material, fixed assets and services. During the course of the audit, on random test check basis, no major weakness has been noticed in internal controls in respect of these areas except as notified in the Secretarial Audit. CHANGE IN REGISTERED OFFICE: The Registered Office of the Company was earlier situated at Plot No. 1, Phase-III,Sansarpur Terrace, Himachal Pradesh. Due to commercial exigency, the Board of Directors considered and approved the shifting the registered office within the Jurisdiction of the Registrar of Companies, Himachal Pradesh, to Plot No. 2,Phase III, Sansarpur Terrace, Himachal Pradesh-173212 w.e.f. 01/06/2015.The present location is within the local limits of the city. The shifting of the Registered Office as aforesaid is in the best interests of the company, its shareholders and all concerned. The shifting will in no way be detrimental to the interest(s) of any member of the public, employees or other associates of the Company in any manner whatsoever. NUMBER OF BOARD MEETING During the Financial Year 2014-15,Five Board meeting were held during the year. The intervening gap between the meetings was within the period prescribed under the Companies Act,2013 and the Listing Agreement with Stock Exchanges. The details of all Board/Committee meetings held are given in the Corporate Governance Report. CORPORATE GOVERNANCE DISCLOSURES As a responsible corporate citizen, the Company is committed to maintain the highest standards of Corporate Governance and believes in adhering to the best corporate practices prevalent globally. A detailed report on Corporate Governance is attached as Annexure "C". A certificate from a Practising Company Secretary confirming compliance with the conditions of Corporate Governance, as stipulated in Clause 49 of the Listing Agreement, is attached to the Corporate Governance Report. Your Company gives due emphasis on the adaptability to such procedures so as to ensure transparency, accountability & integrity in all respect. CODE OF CONDUCT: In compliance with Clause 49 of Listing Agreement and the Companies Act, 2013, the Company has framed and adopted a code of conduct. The code is applicable to the members of the Board and all employees of the Company. The Board Members have affirmed compliance with the Code of Conduct for the year ended March 31, 2015 PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE In order to prevent sexual harassment of women at work place a new Act,"The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. During the year under review, there was no requirement in our company to form the Internal Complains Committee, Further there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT The Company has received necessary declaration from each independent directors under Section 149(7) of Companies Act, 2013 that they meet the criteria of independence laid down in Sec.149(6) of Companies Act, 2013 read with Clause 49 of the Listing Agreement. COMMITTEE Pursuant to requirement under Companies Act,2013 and Listing Agreement, the Board of Directors has constituted the following Committees: 1. Audit Committee, 2. Nomination & Remuneration Committee and 3. Stakeholders Relationship Committee. The details of composition and terms of reference of these committees are mentioned in the Corporate Governance Report. NOMINATION & REMUNERATION POLICY The Company has framed aNomination and Remuneration Policy pursuant to the provisions of Section 178 of the Act read with Clause 49 of the Listing Agreement. The Policy has been disclosed in the Corporate Governance Report attached to this Report as Annexure "D". PARTICULARS OF LOAN(S), GUARANTEE(S) OR INVESTMENT(S) UNDER SECTION 186 OF THE COMPANIES ACT, 2013 During the year under review the Company has neither made any investment(s) nor given any loan(s) or guarantee(s) or provided any security which is covered under the provisions of Section 186 of the Companies Act, 2013. PARTICULARS OF CONTRACTS OR ARRANGEMENT MADE WITH RELATED PARTIES During the year, the Company had not entered into any contract/ arrangement/transaction with related parties. DEPOSITS During the year under review, your Company did not accept deposits covered under Chapter V of the Companies Act, 2013. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO: Particulars required under Section 134(3) (m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rule, 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure "E" forming part of this report. RISK MANAGEMENT The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically. Board has prepared Risk Management Plan which is reviewed and monitored on regular basis, to identify and review critical risks. FORMAL ANNUAL EVALUATION The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and the individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors excluding the director being evaluated. For annual performance evaluation of the Board as a whole, its Committees and individual Directors including the chairman of the Board, the Company has formulated the questionnaires to assist in evaluation of performance. Every director has to fill the questionnaires related to the performance of the Board, its Committees and individual Directors except himself. On the basis of the response to the questionnaires, a formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors. MEETING OF INDEPENDENT DIRECTORS In terms of requirements under Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate meeting of the Independent Directors was held on February 26, 2015. The Independent Directors at the meeting reviewed the following:- • Performance of non-independent Directors and Board as a whole. • Performance of the Chairperson of the Company, THE CHANGE IN THE NATURE OF BUSINESS, IF ANY; There was no change in the nature of business of your company during the year under review. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS No significant material orders have been passed during the year by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. VIGIL MECHANISM/ WHISTLE BLOWER POLICY: The Board has approved the Whistle Blower Policy, a mechanism for employees to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. The mechanism also provide for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. During the year under review no personnel has been denied access to the audit committee. The Company has adopted a formal Vigil Mechanism/ Whistle-blower policy. MANAGEMENT DISCUSSION & ANALYSIS REPORT The Management Discussion and Analysis Report on the operations of the Company as provided under the Listing Agreement has been given separately and forms part of the Annual Report as Annexure "F". INDUSTRIAL RELATIONS The Industrial Relations have continued to be stable and harmonious during the course of the year. ACKNOWLEDGEMENTS Your Directors would like to express their gratitude and appreciation for the assistance and cooperation received from the Banks during the year under review. Your Directors also place on record their deep sense of appreciation for the devoted services rendered by all the employees of the company. By Order of the Board For Suraj Industries Ltd J.K. Jain Chairman & Director DIN: 00120204 Place : New Delhi Date : 02.09.2014 |