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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 hereby present the 25th Annual Report along with the AuditedStatement of Accounts for the Financial Year ended March 31 2017.

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.)

2016-2017 2015-2016
Income - -
Net Profit (Loss) before ex - (1500831) (839447)
traordinary items and tax
Provision for Taxation - -
Income Tax
Net Profit/(Loss) after tax for the year (1500831) (839447)
Additional Depreciation as per Schedule II of Companies - -
Act 2013 charged against reserves.
Profit/ (Loss) Brought (105384305) (104544857)
Forward
Net Profit/ (Net Loss) Carried to Balance Sheet (106885136) (105384305)

PERFORMANCE OF BUSINESS:

During the financial year 2016-17 the Company has incurred a loss of Rs. 1500831/-(FifteenLacs Eight Hundred and Thirty One Only) as compared to loss of Rs. 839447/-(Eight Lacs Thirty Nine Thousand Four Hundred and Forty Seven) 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

During the financial year Mr. J.K Jain Director of the Company expired on 15thNovember 2016 due to illness and ceased to hold office from that date. Pursuant to theprovisions of section 152 of the Companies Act 2013 and in accordance with the provisionsof Articles of Association of the Company Mr. Syed Azizur Rahman

Director of the Company is liable to retire by rotation and being eligible offerhimself for re-appointment.

Mr. Syed Azizur Rahman is not disqualified under Section

164(2) 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 was not filled during the last year. The

Board of Directors in their meeting held on August 14 2017 appointed Mr. Sujeet KumarGupta as Chief Financial Officer of 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 312017 the applicable Accounting standards have been followed and that there are nomaterial departures. ii) The directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that were reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2017and of the profit or loss of the

Company for the Financial year ended March 31 2017. iii) The directors have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities. iv) With theclosure of all the business segments as mentioned in Note no. 1 under Basis forQualified Audit Opinion of Auditor’s Report the accounts have been prepared withoutfollowing the going concern assumption. v) The directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively. vi) The directors had devised proper system toensure compliance with the provisions of all applicable laws and that such systems wereadequate 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 Company have occurred between the end of the financial year of theCompany 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 arementioned in the Corporate Governance Report which forms part of the Director Report. TheBoard during the year under review had accepted all the recommendations made to it bythe 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 appointment for a period of five years i.e from theconclusion of this AGM until the conclusion of the 30th AGM of your Company. The companyhas received the requisite certificate from M/s Satendra Rawat & Company

Chartered Accountants to the effect that their appointment if effected would be inaccordance with the provisions of Section 139 (2) of the Companies Act 2013 and Rulesmade there under.

AUDIT REPORT

The Auditor had pointed one remark which is replied by the Board of Directorshereunder: Auditors Remark

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) andnote 14 of the Balance Sheet to the effect that these accounts have been prepared withoutfollowing the going concern assumption on the closure & cessation of the two businesssegments by the Company and disposal of major assets of these discontinued segments inpreceding years".

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.

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 hadappointed Ms. Monika Kohli Company Secretary in Practice to undertake the SecretarialAudit of the Company for financial year 2016-17.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report in prescribed form MR-3 for Financial Year 2016-17 formspart of the Annual Report as

"Annexure B" to the Board Report.

Further 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 during the period.

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 during the Financial Year ended March 31 2017. The Board of Directors at itsmeeting held on 14th August 2017 has appointed M/s Mohan Gupta & CompanyChartered Accountants as Internal Auditor of the Company in compliance of the CompaniesAct 2013.

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 during the period.

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 during the Financial Year 2016-17 The Board of Directors at itsmeeting held on 14th August 2017 has appointed Mr.Sujeet Kumar Gupta as ChiefFinancial officer of the Company in compliance of the Companies Act

2013.

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 18 2013 & 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. Also during the year the Company hasreceived communications through emails from Listing Department BSE Limited mentioningobservation /pending compliance(s) of Listing requirement & the Company has submittedits replies from time to time in response to the letters received from BSE Limitedhowever approval for resumption of trading in equity is yet to be received from the BSELimited.

Board’s Reply

The trading in equity shares of the Company was suspended due to non-payment of listingfees & certain non-compliance of listing agreement. The Company has since then paidthe listing fees that was due and has completed the pending compliances and submitted allthe documents with BSE for revocation of suspension of trading. The Company is constantlyfollowing up with BSE Limited for resumption of trading in share activities.

Secretarial Auditors Remark – 4

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) Regulations 2015 (LODR).

Board’s Reply

The Company has been allotted ISIN by CDSL for dematerialization of the Company’sShares. The Company has also made an application to NSDL for obtaining ISIN from NSDLwhich is under process. The Company had made request to all the shareholders includingpromoters through notice of last Annual General Meeting asking to dematerialize theirsshares. Similar request to all shareholders including promoters to be made in the noticeof ensuing Annual General Meeting which is being sent to all the shareholders and willalso make necessary advertisement through public notice requesting members todematerialize their shares. The Management will also follow up with the promoters to gettheir shares dematerialize to make the Company compliant as per LODR.

Secretarial Auditors Remark – 5

As per regulation 17(8) of LODR the Company is required to that obtain certificateDirector said certificate of the Company.

Board’s Reply

As stated earlier the Company is not carrying any business activities since many yearsand it doesn’t have any CEO/CFO. Therefore Mr. Syed Azizur Rahman the then WholeTime

Director of the Company had submitted certificate in terms of Regulation 17(8) of SEBI(Listing Obligation & Disclosure Requirements) Regulations 2015 to the Board.

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 2017 the paid-up share capital stood atRs73430000 comprising of 7286000 fully paid equity shares of 10/- each and 114000partly paid equity shares of Rs 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 31 2017.

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 2016-17 six Board meetings were held during the year. Theintervening gap between any two meetings did not exceed 120 days as prescribed under

Companies Act2013 and the SEBI (Listing Obligation & Disclosure Requirements)Regulation 2015. The details of all Board held are given in the Corporate GovernanceReport.

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". A certificate from a Secretary confirming compliance withthe conditions of

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 2017. Further the Code of Conduct is also available on our website http://www.surajindustries.org

PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

The company is not required to form "Internal Complains

Committee" under The Sexual Harassment of Women at

Workplace (Prevention Prohibition and Redresssal) Act 2013 as the Company had onlytwo employees 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 March 10 2017.

The Independent Directors at the meeting reviewed the following:-

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

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.

Performance of the Chairperson of the Company

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.

The Policy is also available on our website http://www. surajindustries.org

There is no change in the policy during the financial year 2016-17.

PARTICULARS OF LOAN(S) GUARANTEE(S) OR INVESTMENT(S) UNDER SECTION 186 OF THECOMPANIES ACT 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 Vigil Mechanism/Whistle Blower Policy a mechanism for employees toreport to the management concerns about unethical behaviour actual or suspected fraud orviolation of the Company’s code of conduct. The mechanism also provide for adequatesafeguards against victimization of employees who avail of the mechanism and also providefor direct access to the Chairman of the Audit Committee in exceptional cases. The Policyis also available on our website http://www.surajindustries.org.

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

There is no change in the policy during the financial year 2016-

17

PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES

1. Disclosure in terms of Rule 5 (1) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014:-

The Company had only two permanent employees as against one employee last year Ms.Bhanumati Ramchandran; Company Secretary is one of the employee.

Details of Remuneration paid to Company Secretary during the Financial Year 2016-2017is given below:

Particulars Amount

Salary 60000 Contribution to PF/ Superannuation/ NIL Gratuity Perquisites NIL

Total Remuneration 60000

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

Ms. Bhanumati Ramchandran Company Secretary was paid remuneration of Rs 60000/-during the year as per the remuneration policy of the Company and there is an increase of90.47% in her remuneration as compared to the remuneration given in 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 andRemuneration of Managerial 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 "D".

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.

Place: New Delhi By Order of the Board
Date: 14.08.2017 For Suraj Industries Ltd
Sd/-
Syed Azizur Rahman
Chairman & Director
DIN: 00242790
Add: Flat B-104 (FF)
Ananda Apartment
Sector-48 Noida UP-201301