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Suraj Industries Ltd.

BSE: 526211 Sector: Industrials
NSE: N.A. ISIN Code: INE170U01011
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Suraj Industries Ltd. (SURAJINDS) - Director Report

Company director report

To

The Members

Suraj Industries Ltd

Your Directors are delighted to present the 24th Annual Report along withthe Audited Statement of Accounts for the Financial Year ended March 312016.

FINANCIAL RESULTS OF THE COMPANY

The financial results of the Company for the year under review and comparative figuresfor the previous year are summarized below:

(in Rs.)
2015-2016 2014-2015
Income - 105108
Net Profit (Loss) before tax (839447) 21712
Provision for Taxation
Income Tax - .
Net Profit/(Loss) after tax for the year (839447) 21712
Additional Depreciation as per Schedule II of Companies Act 2013 charged against reserves. - (301447)
Profit/ (Loss) Brought Forward (104544857) (104265122)
Net Profit/ (Net Loss) Carried to Balance Sheet (105384304) (104544857)

PERFORMANCE OF BUSINESS:

During the financial year 2015-16 the Company has incurred a loss of Rs. 839447during the year as compared to profit of Rs. 21712 in the last year.

STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK

The Company is exploring various business avenues to restart operations in the Companywhich can give it steady returns in the long run.

DIVIDEND

Due to the present financial position your Directors are unable to recommend anydividend for the year under review.

AMOUNT TRANSFERRED TO RESERVES:

Due to losses 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 accordancewith the provisions of Articles of Association of the Company Ms. Suchi Bahl Director ofthe Company is liable to retire by rotation and being eligible offer herself forre-appointment.

Ms. Suchi Bahl is not disqualified under Section 164(2) of the Companies Act 2013.

Mr. Syed Azizur Rahman was appointed as an additional director on the Board ofDirectors of the Company w.e.f. October 30 2015 upto the date of ensuing Annual GeneralMeeting of the Company as per the provisions of section 161(1) of the Companies Act 2013.Further Mr. Syed Azizur Rahman was appointed as Whole Time Director of the Company for aperiod of Two (2) years with effect from October 30 2015 by the Board of Directorswithout any remuneration till the commencement of Business activities of the Company. TheBoard recommends his re-appointment as Director of the Company for your approval as wellas ratification of his appointment as Whole Time Director for a period of 2 years w.e.f.30.10.2015 in terms of Part III of Schedule V of the Companies Act 2013.

Your Company was required to appoint Chief Financial Officer pursuant to Section 203 ofthe Companies Act 2013 read with rule 8 of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 however the position of Chief Financial Officer isyet to be filled. Your company has initiated the process of recruitment of Chief FinancialOfficer however no suitable candidate was found/ selected because of the continuancelosses in the company and there is no business activity in the Company.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed form MGT-9 is annexed herewith as "AnnexureA" -

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

i) In the preparation of the Annual Accounts for the year ended March 31 2016 theapplicable Accounting standards have been followed and that there are no materialdepartures.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312016 and of the profit orloss of the Company for the Financial year ended March 312016.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

iv) With the closure of all the business segments as mentioned in Note no. 1 underBasis for Qualified Audit Opinion of Auditor’s Report the accounts have beenprepared without following the going concern assumption.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

The Company was not required to constitute corporate social responsibility committeepursuant to section 135 of the Companies Act 2013.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial Position of your Companyhave occurred between the end of the financial year of the Company to which the financialstatements relate and on the date of this report.

AUDIT COMMITTEE

The details of the Audit Committee including its composition and terms of reference arementioned 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 toit by the Audit Committee.

AUDITORS

M/s Satendra Rawat & Company Chartered Accountants

Statutory Auditors of the company hold office until the conclusion of ensuing AnnualGeneral Meeting and your Directors recommend their re-appointment. The company hasreceived the requisite certificate from M/s Satendra Rawat & Company CharteredAccountants to the effect that their re-appointment if effected would be in accordancewith the provisions of Section 139 (2) of the Companies Act 2013 and Rules made thereunder.

AUDIT REPORT

The Auditor had pointed out certain remarks which are replied bv the Board ofDirectors hereunder:

Auditors Remark -1

In the Auditor Report under point no. 1 of Basis for Qualified Audit Opinion it hasbeen stated that "Attention is drawn to note no. 1(a) and note 14 of the BalanceSheet to the effect that these accounts have been prepared without following the goingconcern assumption on the closure & cessation of the two business segments by theCompany and disposal of major assets of these discontinued segments in precedingyears".

Board’s Reply

As the members are aware that the Company has exited from the edible oils business dueto adverse market conditions and bleak prospects & all the workers and the employeesemployed at the factory at Sansarpur Terrace had resigned voluntarily. Thereafter lookingat the bleak prospects the Company had sold off its assets at the factory after takingpermission from the members of the Company to pay off its liabilities. Thereafter theCompany ventured into marketing and distribution of liquor but the same has also beendiscontinued. Since at present the Company had no continuing business except for theliquidation/realization of the liabilities/assets of the previous businesses the accountsof 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 hasbeen stated that "Company has a sum of Rs. 6.38 lacs as recoverable advances onaccount of sales tax and income tax refunds which in view of long time lag in ouropinion are not realisable and should have been written off. Therefore the loss of theyear and current assets are shown more by Rs. 6.38 lacs and deficit in statement of profitand loss account is shown less to that extent".

Board’s Reply

The company is pursuing the recovery of these dues from Sales Tax & Income TaxDepartment. 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 hasappointed Ms. Monika Kohli Company Secretary in Practice to undertake the SecretarialAudit of the Company for financial year 2015-16.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report in prescribed form MR-3 for Financial Year 2015-16 formspart of the Annual Report as "Annexure B" to the Board Report.

Futher Secretarial Auditor had pointed out certain remarks which are replied by theBoard of Directors hereunder:

Secretarial Auditors Remark -1

The Company was required to appoint Internal Auditor as per the section 138 of theCompanies Act 2013 read with rule 13 of Companies (Accounts) Rule 2014. However it isobserved 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 oftransactions are very less and the company is a loss making entity therefore it was notfeasible to appoint internal auditor. However the internal controls were adequatelyexercised.

Secretarial Auditors Remark - 2

The Company was required to appoint Chief Financial Officer pursuant to section 203 ofthe Companies Act 2013 read with rule 8 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. However it is observed that no Chief Financial Officerhas been appointed by the company.

Board’s Reply

As stated above the Company is not doing any business activity for many years thereforeno finance professional has shown his interest to take the position of Chief FinancialOfficer of the Company.

The Management shall initiate the process of appointment of the CFO immediately oncethe company re-start its business activity.

Secretarial Auditors Remark - 3

The Trading in equity shares of the Company had been suspended by the BSE Limited videsuspension Notice no. 20130404-33 dated April 4 2013 placed on the Exchange website &BSE letter no. DCS/COMP/ SCDec-12/526211/361/2012-13 dated March 182013 & letter no.DCS/COMP/AJ/SUS/526211/07/2013-14 dated April 04 2013 respectively due to non-complianceof the various clause of the Listing Agreement. The Company has made certain pendingcompliances during the year and has submitted its reply to the BSE Limited howeverapproval of resumption of trading in equity is yet to be received from the BSE Limited.

Board’s Reply

The Company has been suspended due to non-payment of listing fees & certainnon-compliance of listing agreement. The Company has since them paid the listing fees thatwas due and has completed the pending compliances and submitted all the documents with BSEfor revocation of suspension of trading. The Company is constantly following up with BSELimited for resumption of trading in share activities.

Secretarial Auditors Remark - 4

The Company has signed the tripartite agreement with CDSL and Registrar to the Companyand the ISIN INE170U01011 has been allotted by the CDSL on January 29 2016. Further ISINis yet to be allotted by NSDL.

Board’s Reply

The Company has sent the required documents to NSDL for allotment of ISIN.

Secretarial Auditors Remark - 5

It is observed that the promoter’s 100% equity shares in the company are inphysical form which is in non compliance of Regulation 31 of SEBI (Listing Obligation andDisclosure Requirement) 2015 (LODR).

Board’s Reply

The Company has recently been allotted ISIN by CDSL for dematerialization of theCompany’s Shares. The Company is also in the process of obtaining ISIN from NSDL. TheCompany is making request to all the shareholders including promoters through notice ofensuing Annual General Meeting which is being sent to all the shareholders and will alsomake necessary advertisement through public notice requesting members to dematerializetheir shares.

Secretarial Auditors Remark - 6

As per regulation 17(8) of LODR ( Earlier clause 49 of Listing Agreement) the Companyis required to obtain certificate from CEO/ CFO however it observed that said certificatehas been obtained from the whole time Director of the Company.

Board’s Reply -

As stated earlier the Company’s is not carrying any business activities since manyyear and it doesn’t have any CEO/CFO Mr. Syed Azizur Rahman whole time Director ofthe Company has submitted certificate in terms of Regulation 17(8) of SEBI (ListingObligation & Disclosure Requirements) Regulations 2015 to the Board.

Secretarial Auditors Remark - 7

As per Rule 20 of the Companies (Management & Administration) Rules 2014 read withSecretarial Standards Notice of General Meeting wherein the facility of e-voting isprovided is required to be sent through either by Registered Post or speed post or bycourier or by email or by any other electronic means however it is observed that noticeof last Annual General Meeting wherein the E-voting facilities was given to members wassent through ordinary post.

Board’s Reply

As stated earlier the Company is not carrying any business activities since last manyyears and therefore the company was facing financial constraints due to which the noticeof last Annual General Meeting was sent through ordinary post. Your management will ensureits compliance in future

SHARE CAPITAL

During the year there has been no change in the authorised subscribed and paid-upshare capital of the Company. As at March 31 2016 the paid-up share capital stood at Rs73430000 comprising of 7343000 equity shares of 10/- each.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in all material respects an adequate internal financial control systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 312016.

DETAILS OF SUBSIDIARIES/ JOINT VENTURE AND ASSOCIATES COMPANY

The Company has no subsidiary/ Joint Venture and Associate Company during the year.

NUMBER OF BOARD MEETING

During the Financial Year 2015-16 five Board meetings were held during the year. Theintervening gap between any two meetings did not exceed 120 days as prescribed underCompanies Act 2013 and the SEBI (Listing Obligation & Disclosure Requirements)Regulation 2015. The details of all Board/Committee meetings held are given in theCorporate Governance Report.

CORPORATE GOVERNANCE DISCLOSURES

As a responsible corporate citizen the Company is committed to maintain the higheststandards of Corporate Governance and believes in adhering to the best corporate practicesprevalent globally.

A detailed report on Corporate Governance is attached as Annexure "C". Acertificate from a Practising Company Secretary confirming compliance with the conditionsof Corporate Governance as stipulated in Regulation 34(3) read with Schedule V of SEBI(Listing Obligation & Disclosure Requirements) Regulation 2015 is attached tothe Corporate Governance Report.

Your Company gives due emphasis on the adaptability to such procedures so as to ensuretransparency accountability & integrity in all respect.

CODE OF CONDUCT

In compliance with Regulation 26(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 and the Companies Act 2013 the Company has framed andadopted a code of conduct. The code is applicable to the members of the Board and allemployees of the Company.

The Board Members have affirmed compliance with the Code of Conduct for the year endedMarch 31 2016. Further the Code of Conduct is also available on our website http://www.surajindustries.org.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 with the aim toconsolidate and streamline with provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectivefrom December 12015. Accordingly all listed entities were required to enter into theListing Agreement within six months from the effective date. The Company entered intoListing Agreement with BSE Limited on February 24 2016.

PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

The company is not required to form "Internal Complains Committee" under TheSexual Harassment of Women at Workplace (Prevention Prohibition and Redresssal) Act 2013as the Number of workers were less than 10 during the period under review.

DECLARATION BY INDEPENDENT DIRECTOR(S)

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independence laiddown in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.

MEETING OF INDEPENDENT DIRECTORS

In terms of requirements under Schedule IV of the Companies Act 2013 and Regulation25 of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015 aseparate meeting of the Independent Directors was held on February 17 2016.

The Independent Directors at the meeting reviewed the following:-

• Performance of non-independent Directors and the Board as a whole

• Performance of the Chairperson of the Company

• Assess the quality quantity and timeliness of flow of information between themanagement of the listed entity and the board of directors that is necessary for the boardof directors to effectively and reasonably perform their duties.

COMMITTEE

Pursuant to the requirement under Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 the Board of Directors has constituted thefollowing 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 inthe Corporate Governance Report.

NOMINATION & REMUNERATION POLICY

The Company has framed a Nomination and Remuneration Policy pursuant to the provisionsof Section 178 of the Companies Act 2013 read with Regulation 19 and Part D of ScheduleII of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015. Thepolicy has been disclosed as "Annexure D". Further The Policy is alsoavailable on our website http://www.surajindustries.org.

PARTICULARS OF LOANSL GUARANTEE(S) OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT. 2013

During the year under review the Company has neither made any investment(s) nor givenany loan(s) or guarantee(s) which is covered under the provisions of Section 186 of theCompanies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year the Company had not entered into any contract arrangement andtransaction with related parties which could be considered material in accordance with theCompany’s Policy on materiality of and dealing with related party transactions (the"Policy") and accordingly the disclosure of Related Party Transactions in FormAOC-2 is not applicable.

DEPOSITS

During the year under review your Company had not accepted deposits covered underChapter V of the Companies Act 2013.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS & OUTGO:

The Company is not engaged in any activity where conservation of energy and technologyabsorption is required. Further during the year there were no foreign exchange earningsor outgo. Hence the details required under Section 134(3) (m) of the Companies Act 2013read with rule 8(3) Companies (Accounts) Rule 2014 are not given.

RISK MANAGEMENT

The Company has in place comprehensive risk assessment and minimization procedureswhich are reviewed by the Board periodically. Board has prepared Risk Management Planwhich is reviewed and monitored on regular basis to identify and review critical risks.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out theannual performance evaluation of its own performance the Directors individually as wellas the evaluation of the working of its Audit Nomination and Remuneration Committees andStakeholder Relationship Committee. The evaluation was carried out on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestsof the Company and its shareholders etc.

The Directors expressed their satisfaction with the evaluation process.

THE CHANGE IN THE NATURE OF BUSINESS. IF ANY:

There was no change in the nature of business of your company during the year underreview.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board has approved the Vigil Mechanism/Whistle Blower Policy a mechanism foremployees to report to the management concerns about unethical behaviour actual orsuspected fraud or violation of the Company’s code of conduct. ' The mechanism alsoprovide for adequate safeguards against victimization of employees who avail of themechanism and also provide for direct access to the Chairman of the Audit Committee inexceptional cases. The Policy is also available on our websitehttp://www.suraiindustries.org.

During the year under review no personnel has been denied access to the auditcommittee.

PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES

1. Disclosure in terms of Rule 5 (1) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:-

The details of remuneration paid to Directors during Financial Year 2015-2016 are givenbelow:

Particulars Ms. Bhanumati Ramchandran Company Secretary
Salary 31500
Contribution to PF/ Superannuation/ Gratuity NIL
Perquisites NIL
Total Remuneration 31500

Notes:-

• During the year under review no remuneration was paid to any Executive andNon-Executive Directors of the Company.

• At present the Company has only one permanent employee Ms. BhanumatiRamchandran Company Secretary who was paid remuneration of Rs. 31500/- as per theremuneration policy of the company and there is an increase of 14.5% in her remunerationas compared to the remuneration given to her last year.

• In view of the above no other disclosure required in terms of Rule 5 (1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isapplicable.

2. Disclosure in terms of Rule 5 (2) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:-

There was no employee who has drawn salary as mentioned in the aforesaid rule.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In terms of the provisions of Regulations 34 and Part B of Schedule V of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations2015 the Management’s discussion and analysis report has been given separately andforms part of the Annual Report as Annexure "E".

INDUSTRIAL RELATIONS

The Industrial Relations have continued to be stable and harmonious during the courseof the year.

ACKNOWLEDGEMENTS

Your Directors would like to express their gratitude and appreciation for theassistance and cooperation received from the Banks during the year under review.

Your Directors also place on record their deep sense of appreciation for the devotedservices rendered by all the employees of the company and for the continued co-operation& support received from shareholders of the Company.

By Order of the Board
For Suraj Industries Ltd
Place: New Delhi J.K. Jain
Date: 03.09.2016 Chairman & Director
DIN: 00120204
Add: Flat No. 001 Tower 8
The Close South
Nirvana Country Sector 50
Gurgaon HP-122018