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Sudal Industries Ltd.

BSE: 506003 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE618D01015
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OPEN 8.50
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VOLUME 104
52-Week high 13.00
52-Week low 7.53
P/E
Mkt Cap.(Rs cr) 7
Buy Price 9.00
Buy Qty 460.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.50
CLOSE 8.70
VOLUME 104
52-Week high 13.00
52-Week low 7.53
P/E
Mkt Cap.(Rs cr) 7
Buy Price 9.00
Buy Qty 460.00
Sell Price 0.00
Sell Qty 0.00

Sudal Industries Ltd. (SUDALINDS) - Director Report

Company director report

To

The Members

Sudal Industries Limited

Your Directors have pleasure in presenting the Thirty Seventh Annual Report of theCompany together with the Audited Statement of Accounts for the year ended 31 st March2016.

I. FINANCIAL RESULTS

The Company's performance during the year ended 31st March 2016 as compared to theprevious financial year is summarized below:

Particulars For the financial year ended 31st March 2016 For the financial year ended 31st March 2015
Total Revenue 6972.11 8075.54
Earnings before interest depreciation and tax 30.09 331.36
Less: Interest and Finance Charges 1177.04 1023.89
Less: Depreciation 121.95 142.69
Profit/(Loss) Before Taxation (1268.90) ( 835.22)
Less: Provisions for Current Tax - -
Less: Provision for Deferred Tax (637.71) 2.97
Profit/(Loss) after Tax (631.19) ( 838.19)
Surplus brought forward from previous year (24.53) 818.91
Adjustment for depreciation on revaluation reserve for earlier years - (5.25)
Surplus / (Loss) Carried Forward to Next Year (655.72) (24.53)

OPERATIONS AND RESULTS:

The downward trend in price of primary metal continues due to the sluggish economicconditions pertaining to Aluminium Extrusions which continued to be the preliminaryobject of the Company.

The Directorate General of Safeguard in its preliminary investigation found thataluminum imports have caused financial losses to the domestic industry and had thereforerecommended a provisional safeguard duty of 5 percent on unwrought aluminum imports.

According to the data available with the Ministry of Commerce imports of unwroughtaluminum into India has shown a substantial increase from 242533 tonnes in 2011-12 to432370 tonnes till 2015-16 recording an increase of 78 percent on annualized basis.

The Company could sail through another challenging phase of Financial Year 2015-2016due to your continued support. The Company has incurred a loss of Rs 631.19 lacs asagainst the loss of Rs 838.19 lacs incurred by the Company in Financial year 2014-2015

During the year under review due to downward pressure on metal price and consequentchange in sales pattern from substantial out right sales to accepting the orders onconversion basis the turnover was lower.

The financial year 2015-2016 had started with a decline in the generation of revenueand other input cost getting decreased / stable by the end of the financial year. Thisenables the Company to curtail the loss to some extent. The last Quarter of the FinancialYear could only generate profits before interest against loss in the corresponding Marchquarter.

The Company had incurred an average expenditure throughout the Financial Year2015-2016. However the profitability of the Company due to the volatile market conditionshad been affected throughout the year.

II. DIVIDEND:

Considering the loss in the current financial year your Directors have not recommendedany dividend for the financial year under review.

III. TRANSFER TO RESERVES:

In view of loss incurred during the year under review the Board of Directors has notrecommended transfer of any amount to reserves.

IV. REVISION OF FINANCIAL STATEMENT:

There was no revision of the financial statements for the year under review.

V. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:

During the year under review your Company did not have any subsidiary associate andjoint venture company.

VI. DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 (“the Act”) read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review.

VII. DISCLOSURES UNDER SECTION 134(3)(i) OF THE COMPANIES ACT 2013:

Except as disclosed elsewhere in this report no material changes and commitments haveoccurred between the end of the financial year of the Company and date of this reportwhich could affect the Company’s financial position.

VIII. INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.

IX. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company’s operations in future.

X. RELATED PARTY TRANSACTIONS:

The details of transactions/contracts/arrangements entered by the Company with relatedparty / parties as defined under the provisions of Section 2(76) of the Companies Act2013 during the financial year under review are furnished in Annexure I and forms partof this Report.

XI. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:

Full particulars of loans guarantees investments and securities provided during thefinancial year under review along with the purposes for which such loans guarantees andsecurities are proposed to be utilized by the recipients thereof has been furnished inNote No. 12 and 13 which are forming part of the Financial Statements for the year ended31 March 2016.

XII. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT 2013:

The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.

XIII. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013:

The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.

XIV. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:

The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.

XV. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:

During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014.

XVI. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis forms an Integral Part of this Annual Report.

XVII. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

During the year the following appointments resignation took place:

1. The Board appointed Ms. Vedika Gupta as an Additional Director with effect from23 November 2015. As per the provisions of Section 149 of the Companies Act 2013 theCompany needs to have atleast one women director on the Board. In order to comply withthese requirements the Board of Directors appointed Ms. Vedika Gupta as an additionaldirector and a women director of the Company categorized as Independent Director w.e.f.23 November 2015 and who shall hold office till the date of this Annual General Meeting.The Company has received a notice from a member proposing the candidature of Ms. VedikaGupta as the Director of the Company. Necessary resolution for appointment of Ms. VedikaGupta as Director of the Company is included in the Agenda of Notice of Annual GeneralMeeting. Your Board recommends her appointment.

2. Ms. Dimple Nayak resigned from Directorship with effect from 3 December 2015.

3. Mr. Ketan Shirwadkar resigned from the post of Company Secretary with effectfrom 10 October 2015.

4. The Board of Directors appointed Mr. Saurabh Patkar an Associate Member of theInstitute of Company Secretaries of India as Company Secretary of the Company w.e.f 14November 2015 designated as Key Managerial Personnel under section 203 of the CompaniesAct 2013 and Rule 8 of the Companies (Management and Administration) Rules 2014.Further Mr. Saurabh Patkar resigned from the post of Company Secretary and ComplianceOfficer with effect from 19 March 2016.

5. The Board of Directors appointed Ms. Pooja Bangera an Associate Member of theInstitute of Company Secretaries of India as Company Secretary and Compliance Officer ofthe Company w.e.f 14 May 2016 designated as Key Managerial Personnel under section 203of the Companies Act 2013 and Rule 8 of the Companies (Management and Administration)Rules 2014.

DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors under Section149(6) of the Companies Act 2013 confirming their independence vis-a-vis the Company.

XVIII. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES:

BOARD MEETINGS:

The Board of Directors met 4 times during the financial year ended 31st March2016 in accordance with the provisions of the Companies Act 2013 and rules madethereunder.

The dates on which the Board of Directors met during the financial year under revieware as under:

26th May2015 31st July 2015 14th November 2015 12th February 2016

DIRECTOR’S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31 March 2016 the Board ofDirectors hereby confirms that:

• in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

• such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as on 31 March 2016 and of theloss of the Company for the year;

• proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

• the annual accounts of the Company have been prepared on a going concern basis;

• internal financial controls have been laid down to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and

• proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee of Directors reconstituted in accordance with theprovisions of Section 178 of the Act.

The composition of the said Committee is as under:

Sr. No. Name of Director Category
1. Mr. Jal Thanawala Independent N.E.D* (Chairman)
2. Mr. Manoj Shah Independent N.E.D (Member)
3. Mr. Sudarshan Chokhani Managing Director (Member)
4. Mr. Shyantanu Chokhani (up to 14th February 2015) Non Executive Director
5. Ms. Dimple Nayak (31st July 2015 to 3rd December 2015) Independent- N.E.D (Member)
6. Ms. Vedika Gupta (w.e.f. 14th May 2016) Independent- N.E.D (Member)

* N.E.D : Non Executive Director

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees.

Major criteria defined in the policy framed for appointment of and payment ofremuneration to the Directors of the Company are as under:

Minimum Qualification

Positive Attributes

Independence

Experience

AUDIT COMMITTEE:

The Audit Committee of Directors constituted under the provisions of Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 confirmsthe compliance of the provisions of Section 177 of the Companies Act 2013. Thecomposition of the Audit Committee is in conformity with the provisions of the saidsection. The Audit Committee comprises of:

Sr. No. Name of Director Category
1. Mr. Manoj Shah Independent N.E.D* (Chairman)
2. Mr. Jal Thanawala Independent N.E.D (Member)
3. Mr. Sudarshan Chokhani Managing Director (Member)

* N.E.D : Non Executive Director

The scope and terms of reference of the Audit Committee have been amended in accordancewith the Act.

During the year under review the Board of Directors of the Company had accepted allthe recommendations of the Audit Committee.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review pursuant to Section 178 of the Companies Act 2013 theBoard of Directors of the Company constituted the Stakeholder’s RelationshipCommittee comprising of:

Sr. No. Name of Director Category
1. Mr. Jal Thanawala Independent N.E.D* (Chairman)
2. Mr. Manoj Shah Independent N.E.D (Member)
3. Mr. Sudarshan Chokhani Managing Director (Member)

* N.E.D : Non Executive Director

The Company Secretary acts as the Secretary of the Stakeholders' RelationshipCommittee.

SHARE TRANSFER COMMITTEE:

During the year under review pursuant to Section 178 of the Companies Act 2013 theBoard of Directors of the Company constituted the Share Transfer Committee Comprising of;

Sr. No. Name of Director Category
1. Mr. Sudarshan Chokhani Managing Director (Chairman)
2. Mr. Manoj Shah Independent N.E.D* (Member)
3. Mr. Jal Thanawala Independent N.E.D (Member)

* N.E.D : Non Executive Director

The Company Secretary acts as the Secretary of the Share Transfer Committee.

XIX. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has pursuant to the provisions of Section 178(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed “Vigil Mechanism Policy ” for

Directors and employees of the Company to provide a mechanism which ensures adequatesafeguards to employees and Directors from any victimization on raising of concerns of anyviolations of legal or regulatory requirements incorrect or misrepresentation of anyfinancial statements and reports etc.

The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations.

XX. BUSINESS RISK MANAGEMENT

The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual / strategic business plans and in periodic management reviews.

XXI. ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD:

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluationof all Committees. The manner in which evaluation has been carried out is detailed inAnnexure II which forms part of this Report.

XXII. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company’sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

XXIII. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHERDISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:

The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year under review has been furnished and markedas Annexure III.

XXIV. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH 2016:

The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2016 read with the explanatory notes therein are self-explanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013.

RATIFICATION OF APPOINTMENT OF AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Lodha & Co Chartered Accountants (FirmRegistration No. 301051E) the Statutory Auditors of the Company have been appointed for aterm of 3 Years. However their appointment as Statutory Auditors of the Company shall berequired to be ratified by the Members at the ensuing Annual General Meeting. The Companyhas received a confirmation from the said Auditors that they are not disqualified to actas the Auditors and are eligible to hold the office as Auditors of the Company.

Necessary resolution for ratification of appointment of the said Auditors is includedin the Notice of AGM for seeking approval of members.

FRAUD REPORTING

During the year under review there were no instances of material or fraud fallingunder rule 13(1) of the Companies (Audit and Auditors) rule 2014 by officers oremployees reported by the Statutory Auditors of the Company during the course of the Auditconducted.

SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31 ST MARCH 2016:

As per the provisions of Section 204 read with Section 134(3) of the Companies Act2013 the Company has obtained Secretarial Audit Report from M/s Rathi & AssociatesCompany Secretaries for the financial year 2015-16 which forms part of the Report(Annexure IV).

COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 (including any amendments thereof) as perthe recommendation of the Audit Committee the Board of Directors at their meeting dated14th May 2016 appointed M/s Hemant Shah & Associates Cost Accountants (Firm Reg No.000394) as the Cost Auditors of the Company for the Financial Year Ending 31st March2017 on a remuneration of Rs 60000 (Rupees Sixty Thousand Only) for the applicableProduct Groups. As required under the Companies Act 2013 the remuneration payable to theCost Auditors is required to be placed before the Members in a General Meeting for theirratification. Accordingly a Resolution seeking Members ratification for remunerationpayable to M/s Hemant Shah & Associates Cost Auditors is included at Item No. 5 ofthe Notice convening the Annual General Meeting.

XXV. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:

EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2016 made under the provisionsof Section 92(3) of the Act is attached as Annexure V which forms part of this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure VI which forms part of this Report.

DISCLOSURE RELATED TO PREVENTION OF SEXUAL HARASSMENT OF WOMEN A WORK PLACE:

The Directors further state that pursuant to the provisions of sexual harassment ofwomen at workplace (Prevention Prohibition and Redressal) Act 2013 no case pertainingto sexual harassment at work place has been reported to Company during the F.Y. 2015-16

APPOINTMENT OF LINK INTIME INDIA PRIVATE LIMITED AS THE REGISTRAR & SHARE TRANSFERAGENT OF YOUR COMPANY:

Your Company has appointed M/s. Link Intime India Private Limited as Registrar andShare Transfer Agent in place of M/s. Sharepro Services (India) Private Limited.

XXVI. CORPORATE GOVERNANCE : (Applicable to Companies giving remuneration as perSection II of Schedule V):

(Rs in lacs)
PARTICULARS Mr. Sudarshan S Chokhani (Managing Director) Mr. Mukesh V Ashar (Whole Time Director) **
A) Elements of Remuneration Package
Salary 37.00 6.162
Benefits - 0.455
Bonuses - -
Stock Option - -
Pension - -
Total 37.00 6.618
B) Fixed and Variable Components
Fixed Component 37.00 6.162
Performance Linked Incentives - -
C) Terms of Appointment
Service Contract Appointed for 3 years w.e.f 01/09/2015 to 31/08/2018 Appointed for 3 years w.e.f. 08/12/2014 to 07/12/2017
Notice Period 3 months in writing 3 months in writing
Severance Fees Monthly Salary calculated for such no. of years or pay for such no. of months by which the notice falls short of the required no. of months Monthly Salary calculated for such no. of years or pay for such no. of months by which the notice falls short of the required no. of months
D) Stock Option Details if Any - -

XXVII. ACKNOWLEDGMENTS AND APPRECIATION:

Our Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.

Registered Office By the Order of Board of Director
A - 5 MIDC Ambad Industrial Area For Sudal Industries Limited
Mumbai Nashik Highway Nashik-422 010 Sd/-
Sudarshan S Chokhani
Managing Director
DIN: 00243355
Sd/-
Mukesh V Ashar
Place: Mumbai CFO & Director
Date: 14th May 2016 DIN: 06929024

ANNEXURE I

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm’s length transactions under third provisothereto

During the year under review all the material contracts/arrangements/ transactions wereon arm’s length basis.

1. Details of material contracts or arrangement or transactions at arm’slength basis :

Name(s) of the related party and nature of relationship M/s Sudarshan S Chokhani & Co. (Partnership Firm) M/s Shriram Chokhani & Co. (Partnership Firm) M/s Sudarshan S Chokhani & Co. (Partnership Firm) M/s Shriram Chokhani & Co. (Partnership Firm) Mr. Shyantanu S Chokhani (Non- Executive Director )
Nature of contracts/ arrangements/ transactions Contract to purchase raw materials (i.e. billets ingots and Scrap) under section 188 (1)(a) Contract to purchase raw materials (i.e. billets ingots and Scrap) under section 188(1)(a) Contract to lease Commercial Premises Being Office Space under Section 188(1)(c) Contract to lease Commercial Premises Being Office Space under Section 188(1)(c) Appointment of Related Party to office or Place of Profit under Section 188(1)(f)
Duration of the contracts / arrangements/tran sactions Five years w.e.f. 1 April 2014 Five years w.e.f 1 April 2014 Five year w.e.f 1 April 2015 to 31 March 2020 and which shall be subject to renewal on fresh terms and conditions on year to year basis Five year w.e.f 1 April 2015 to 31 March 2020 and which shall be subject to renewal on fresh terms and conditions on year to year basis Three Years w.e.f 1 January 2015
Salient terms of the contracts or arrangements or transactions including the value if any For each financial year Transaction value shall not be more than 10% of the gross turnover as on the last date of the previous financial year For each financial year transaction value shall not be more than 10% of the gross turnover as on the last date of the previous financial year. The Company shall pay a Lease Deposit in Lieu of Rent at the commencement date of the lease i.e. st 1 April 2015 which shall be receivable at the time of expiry / termination of the lease period. The Company shall pay a Lease Deposit in Lieu of Rent at the commencement date of the lease i.e. st 1 April 2015 which shall be receivable at the time of expiry / termination of the lease period. Appointment of Mr. Shyantanu Chokhani Non Executive Director (Son of Mr. Sudarshan S Chokhani Managing Director of the Company) as Advisor Marketing and Business
Date(s) of approval by the Board if any At the meeting of the Board held on 26 May 2015 At the meeting of the Board held on 26 May 2015 At the meeting of the Board held on 26 May 2015 At the meeting of the Board held on 26 May 2015 Development. At the meeting of the Board held on 14 February 2015
Amount paid as advances if any - - - - -

 

Registered Office By the Order of Board of Director
A - 5 MIDC Ambad Industrial Area For Sudal Industries Limited
Mumbai Nashik Highway Nashik-422 010 Sd/- Sd/-
Sudarshan S Chokhani Mukesh V Ashar
Place: Mumbai Managing Director CFO & Director
Date: 14 May 2016 DIN: 00243355 DIN: 06929024

ANNEXURE II

STATEMENT ON MANNER OF EVALUATION OF BOARD OF DIRECTORS COMMITTEE AND INDIVIDUALDIRECTORS:

Pursuant to the provisions of the Companies Act 2013 the Board carried out the annualperformance evaluation of its own performance all the directors individually as well asthe Audit Committee Nomination and Remuneration Committee Stakeholders RelationshipCommittee and Share Transfer Committees of the Board. A Policy named as “NominationRemuneration and Performance Evaluation Policy” with structured questionnaire wasprepared after taking into consideration inputs received from directors. (Policy isuploaded on the website of the Company www.sudal.co.in).

A separate exercise was carried out to evaluate the performance of individual directorson the parameters set out in the policy. The performance evaluation of IndependentDirectors was carried out by the entire Board based on parameters such as Qualificationskills and knowledge leadership qualities compliance with ethical standards and code ofconduct of the Company etc.

The independent directors at a separate meeting carried out the performance evaluationof Non-Executive Directors Board as a whole and the Audit Nomination & RemunerationStakeholders Relationship and Share Transfer Committees of the Board. The qualityquantity and timeliness of flow of information between the Company management and Boardwere also evaluated. Performance of Non Executive Directors was evaluated on parameterssuch as Qualification leadership skills steps initiated towards business developmentsteps initiated towards branding of the Company exercising duties diligently etc.

Performance of the Board as a whole was evaluated on parameters such as compositionwith right mix of skills and knowledge whether the board receives regular updates onproduction marketing and financials and takes all necessary steps to ensure that theoperations of the organization are sound and reviews the organizations performance incarrying out a stated mission on a regular basis whether Board Meeting are conducted in amanner that encourages open communication meaningful discussions and timely resolution ofissues members of the Board meets applicable independence requirement etc.

Performance of the Committees of the Board were evaluated on parameters such asefficiency and effectiveness of the systems in the Company consideration of matters andconcerns raised by the members in the meeting committees accomplishments with respect toperformance objectives redressal of complaints and grievances co-ordination with otherCommittees and Board adherence to companies policies and internal procedures etc.

On a whole all the directors expressed their satisfaction with the evaluation process.

Registered Office By the Order of Board of Director
A - 5 MIDC Ambad Industrial Area For Sudal Industries Limited
Mumbai Nashik Highway Nashik-422 010 Sd/-
Sudarshan S Chokhani
Managing Director
DIN: 00243355
Sd/-
Mukesh V Ashar
Place: Mumbai CFO & Director
Date: 14th May 2016 DIN: 06929024

ANNEXURE III

DISCLOSURE FOR RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE’SREMUNERATION AND OTHER DETAILS AS PER RULE 5 OF THE COMPANIES (APPOINTMENT &REMUNERATION) RULES 2014

I. Median Remuneration: Rs 191544/- Per Annum

II. Ratio of the remuneration of each Executive Director to the median remuneration ofthe Employees of the Company for the Financial Year 2015-16 the percentage increase inremuneration of Chief Financial Officer and other Executive Director and Company Secretaryduring the Financial Year 2015-16.

Name of Director /KMP Designation Ratio of Remuneration of each Director to median remuneration of Employees Percentage Increase in Remuneration
1. Mr. Sudarshan S Chokhani Managing Director 21.93:1 NIL
2. Mr. Mukesh V Ashar Whole-time Director and CFO 3.22:1 NIL

For the purpose of Calculation of median only remuneration pertaining to the employeesbeing part of the Company for the entire financial year were considered

Further the Ratio of Remuneration of the currently designated Company Secretary andCompliance Officer is 1.97:1

Note:

The Non-Executive Directors of the Company are entitled to receive sitting fees inaccordance with the limit specified. The details of remuneration of Non-Executivedirectors are provided in the Extract of Annual Return forming part of the Board Report.The Ratio of remuneration and percentage increase for the Non-Executive DirectorsRemuneration is therefore not considered for the purpose above.

Employee for the above purpose includes all employees excluding employees covered undercollective bargaining. III. The percentage increase in the median remuneration ofemployees in the financial year: During the F.Y. 2015-16 there was no increase in themedian remuneration of employees. IV. The Company has 126 permanent Employees on the rollsof Company as on 31st March 2016.

V. Increase in remuneration depends upon factors like Company performancebenchmarking talent availability and turnover apart from the individual performance ofemployees

VI. The increase in remuneration of the Key Managerial Personnel is decided on theparameters set out in the Nomination Remuneration and Performance Evaluation Policy ofthe Company which is directly linked to individual performances as well as theperformance of the Business.

VII. The market capitalization of the Company as on 31st March 2016 was 816.35 lahksas compared to Rs 773.62 Lacs as on 31st March 2015. The price-earning ratio of theCompany was (0.77) as at 31st March 2016 and was (1.13) at 31st March 2015. The closingshare price of the Company at BSE limited as on 31st March 2016 being Rs11.08 per equityshare of face value of Rs 10/- each.

VIII. There was no increase in the salaries of employees in the last financial year.

IX. The key parameters for variable component of remuneration availed by the directors:Nil

X. None of the employee received remuneration in excess of the highest paid Director.

It is hereby affirmed that the remuneration for the year is as per the remunerationpolicy of the Company:

Registered Office By the Order of Board of Director
A - 5 MIDC Ambad Industrial Area For Sudal Industries Limited
Mumbai Nashik Highway Nashik-422 010 Sd/- Sd/-
Sudarshan S Chokhani Mukesh V Ashar
Place: Mumbai Managing Director CFO & Director
Date: 14 May 2016 DIN: 00243355 DIN: 06929024

ANNEXURE IV

Form No. MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies

(Appointment and Remuneration Personnel) Rules 2014]

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

To

The Members

Sudal Industries Limited

Mumbai

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate governance practices by Sudal IndustriesLimited (hereinafter called “the Company”). The Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s Books Papers Minute Books Forms andReturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has proper Boardprocesses and compliance mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:

1. We have examined the books papers minute books forms and returns filed and otherrecords maintained by Sudal Industries Limited (“the Company”) for thefinancial year ended on 31st March 2016 as given in the Annexure I according tothe provisions of:

(i) The Companies Act 2013 (the Act) and the rules made there under to the extentapplicable; (ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) andthe rules made there under; (iii) The Depositories Act 1996 and the Regulations andBye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of ForeiDirectInvestment Overseas Direct Investment and ExternalCommercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 (effective upto 14 May 2015) and the Securities and Exchange Board ofIndia (Prohibition of Insider Trading) Regulation 2015;

2. Provisions of the following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act1992 ('SEBI Act') were not applicable to theCompany under the Financial Year under report:-

a. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

b. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

c. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

d. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding

the Companies Act and dealing with client; e. The Securities and Exchange Board ofIndia (Delisting of Equity Shares) Regulations 2009; f. The Securities and Exchange Boardof India (Buyback of Securities) Regulations 1998;

3. We further report that having regard to the compliance system prevailing inthe Company and on examination of the relevant documents and records in pursuance thereofon test-check basis the Company has complied with other Acts Laws and Regulationsapplicable specifically to the Company as per the list given in Annexure II.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India underthe provisions of Companies Act 2013; and

(ii) The Listing Agreements entered into by the Company with Stock Exchange(s) (upto30th November 2015) and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (effective from 1st December 2015);

During the financial year under report the Company has complied with the provisions ofthe Act Rules Regulations Guidelines Standards etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the year under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views if any arecaptured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the year under report the Company has not undertaken anyevent/action which would have a major bearing on the Company's affairs in pursuance of theabove referred laws rules regulations guidelines standards etc. referred to above.

For RATHI & ASSOCIATES
COMPANY SECRETARIES
Sd/-
JAYESH SHAH
PARTNER
Date: May 14 2016 FCS No. 5637
Place: Mumbai C.P. No.2535

Note : This report should be read with our letter of even date which is annexed asAnnexure III and form an integral part of this report.

ANNEXURE - I List of documents verified

1. Memorandum & Articles of Association of the Company.

2. Annual Report for the financial year ended 31st March 2015.

3. Minutes of the meetings of the Board of Directors Audit Committee Nomination &Remuneration Committee Stakeholders’ Relationship Committee Share TransferCommittee as well as Minutes of the meeting of Independent Directors held during thefinancial years under report along with respective Attendance Registers.

4. Minutes of General Body Meetings held during the financial year under report.

5. Proof of circulation and delivery of notice agenda and notes to agenda for Boardand Committee Meetings.

6. Proof of circulation of draft as well as certified signed Board & Committeemeetings minutes as per Secretarial Standards.

7. Policies framed by the Company viz. - Policy on Related Party Transactions - RiskManagement Policy - Whistle Blower Policy - Policy On Material Subsidiaries - NominationAnd Remuneration Policy - Archival Policy - Policy For Determination Of Material Events

8. Statutory Registers viz. - Register of Directors & KMP and their Shareholding -Register of Employee Stock Options - Register of loans guarantees and security andacquisition made by the Company (Form No. MBP-2) - Register of Charge (Form No. CHG-7) -Register of Contracts with related party and contracts and Bodies etc. in which directorsare interested (Form No. MBP-4) - Register of Investments (Form No. MBP-3)

9. Copies of Notice Agenda and Notes to Agenda submitted to all the directors /members for the Board Meetings and Committee Meetings as well as resolutions passed bycirculation.

10. Declarations received from the Directors of the Company pursuant to the provisionsof Section 184(1) Section 164(2) and Section 149(7) of the Companies Act 2013.

11. Intimations received from directors under the prohibition of Insider Trading Code.

12. e-Forms filed by the Company from time to time under applicable provisions of theCompanies Act 2013 and attachments thereof during the financial year under report.

13. Intimations / documents / reports / returns filed with the Stock Exchanges pursuantto the provisions of Listing Agreement and the Securities and Exchange Board of India(Listing Obligation and Disclosure Requirements) Regulation 2015 which came into effectfrom 1 December 2015 during the financial year under report.

14. Compliance Certificate placed before the Board of Directors from time to time.

15. Details of Related Party Transactions entered into by the Company during thefinancial year under report.

16. Intimation given to employees of the Company for closure of trading window fromtime to time.

17. Details of Sitting Fees paid to all directors for attending the Board Meetings andCommittees.

ANNEXURE II List of applicable laws to the Company:-

1. Central and State Sales Tax Acts

2. Central Sales Tax Act 1956

3. Companies Act 1956

4. Customs Act 1962

5. Electricity Act 1958

6. Employee Welfare or Labour Legislations governing the Company and itsestablishments.

7. Employees Provident Funds and Miscellaneous Provisions Act 1952

8. Employees State Insurance Act 1948

9. Factories Act 1948

10. Foreign Exchange Management Act 1999 11. Income-tax Act 1961 12. Indian and StateStamp Acts and the Rules 13. Indian Contract Act 1972 1872 14. Industrial DisputesAct 1947

15. Industries (Development and Regulation) Act 1951 16. Minimum Wages Act 1948 17.Payment of Gratuity Act 1972 18. Payment of Wages Act 1936 19. Sale of Goods Act 193020. Securities and Exchange Board of India Act 1992 21. Wealth Tax Act 1957

ANNEXURE III

To

The Members

Sudal Industries Limited

Mumbai

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

For RATHI & ASSOCIATES
COMPANY SECRETARIES
Sd/-
JAYESH SHAH
PARTNER
Date: May 14 2016 FCS No. 5637
Place: Mumbai C.P. No.2535

ANNEXURE VI

DISCLOSURE PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT 2013 READ WITH RULE 8 OFTHE COMPANIES (ACCOUNTS) RULES 2014

(A) CONSERVATION OF ENERGY

(1) Measures taken to Conserve Energy

a) Stop press v15 HP seal pump & drive seal pump on 200 HP motor second end shaft To reduce electricity consumption
b) Installed 100 HP VFD for press 2 second main pump To reduce electricity consumption
c) Use of CBFS (Carbon Black Feed Stock) in place of furnace oil To reduce fuel cost
d) Use of LNG ( Liquified Natural Gas) in place of LPG To reduce fuel cost
e) Electrical power purchase through open access To reduce cost of power per unit
f) To buy maximum readymade billets of required extrusion alloys from primary producers To reduce cost of production energy conservation & recovery.

(2) Measures taken to Conserve Energy

a) Installation of air control valve at air line of billet heating furnace V To reduce LPG consumption
b) Installation of ratio control valve to homogenizing furnace To reduce LPG consumption
c) Replace billet heater 3 existing 15 HP blower with 7.5 HP blower To reduce electricity consumption
d) Installation of 300 HP drive to press 5 second pump and 150 HP drive to press 3 second pump To reduce electricity consumption

FORM A

Disclosure of particulars with respect to conservation of energy

Particulars Current Year 2015-16 Previous Year 2013-14
A Power and Fuel Consumption
1. Electricity
A) Purchased (Units) 2873660 3170512
(Total Amount Rs) 23818640 25157874
(Average rate/Unit-Rs) 8.29 7.93
B) Own Generation
(i) Through Diesel Generator (Units) -- --
Units/litres of Diesel Oil -- --
(cost/Unit-Rs) -- --
(ii) Through Gas (Units- Kgs)
(Total Amount Rs) Cost per Kg -- --
2. Gas Purchased units 337930 361360
(Total Amount Rs) 13469176 21351150
Cost per Kg 39.86 59.09
3. Coal (Specify Quantity & where used) Qty (Tons) -- --
(Total cost Rs) -- --
(Average Rate/Ton- Rs) -- --
4. Furnace Oil (Quantity-Kg) 519262 556120
Total Amount-Rs) 11989198 20149215
(Average rate/Kg-Rs) 23.09 37.23
5. Other (Internal Generation) (Quantity) -- --
(Total Cost) -- --
(Average cost/Unit-Rs) -- --
B Consumption per ton of production
- Electricity
- Furnace Oil (Units) 671.60 759.97
Aluminium Billets (For casting) (Kgs) 98.29 107.64
Alloy
Coal
Others (Specify)

(B) TECHNOLOGY ABSORPTION

Efforts made towards technology absorption For the year under review no new efforts were made
Benefits derived like product improvement cost reduction product development or import substitution No benefits derived
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
Details of technology imported No technology imported
Year of import -
Whether the technology has been fully absorbed Technical assistance for extrusion die.
If not fully absorbed areas where absorption has not taken place and the reasons thereof Design manufacturing and correction. Extrusion ageing homogenizing etc. maintenance practices recommended by Reynolds Germany have been put to practices as per the training to engineer of the Company.

 

Expenditure incurred on Research and Development (Rs in Lacs)
Capital -
Recurring 16.67
Total 16.67
Total R & D expenditure as a Percentage of 0.23% Turnover (Approx.)

(C) Foreign exchange earnings and Outgo:

The Company is exploring the possibility of export of its products. However exportsare not competitive with that of the domestic market.

Registered Office By the Order of Board of Director
A - 5 MIDC Ambad Industrial Area For Sudal Industries Limited
Mumbai Nashik Highway Nashik-422 010
Sd/-
Sudarshan S Chokhani
Managing Director
DIN: 00243355
Sd/-
Mukesh V Ashar
Place: Mumbai CFO & Director
Date: 14 May 2016 DIN: 06929024