Your Directors have pleasure in presenting their 40th Annual Report on theBusiness and operations of a Company and the accounts for the Financial Year ended 31stMarch 2019.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previous yearfigures is given hereunder:
| ||(Fig in Lacs.) ||(Fig in Lacs.) |
| ||Year ended March 31st 2019 ||Year ended March 31st 2018 |
|Sales of products and services ||2012.13 ||4421.31 |
|Other Income ||41.72 ||134.35 |
|Total Income ||2053.85 ||4555 .66 |
|Total Expenditure other than Interest and Depreciation ||2598.03 ||4451.30 |
|Profit before Interest Depreciation and Tax ||-544.18 ||104.36 |
|Depreciation and Amortization Expenses ||161.45 ||189.52 |
|Profit before Interest and Tax ||-705.63 ||-85.16 |
|Finance Cost (net) ||260.73 ||243.17 |
|Profit before Tax ||-966.36 ||-328.42 |
|Provision for Current Tax ||0 ||0 |
|Tax expense ||0 ||0 |
|Provision for Deferred Tax ||0 ||0 |
|Net Profit ||-966.36 ||-328.42 |
|Adjustments in respect of prior years || || |
|Surplus brought forward ||-198.69 ||144.95 |
|Profit after Tax available for appropriation ||-1165.06 ||-183.47 |
|Appropriations ||51.33 ||-15.22 |
|Your Directors recommend appropriation as under: || || |
|Proposed Dividend on Equity Shares ||0 ||0 |
|Dividend Tax on Proposed Dividend ||0 ||0 |
|Transfer to General Reserve ||0 ||0 |
|Income Tax /TDs/ wealth Tax Provision ||0 ||0 |
|Surplus Carried Forward ||-1113.72 ||-198.69 |
|Total Appropriation ||-1113.72 ||-198.69 |
2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
The highlights of the Company's performance are as under:
Revenue from operations and sales decreased this year from Rs. 442131482/- toRs.201213000/-Further our Company putting the efforts to cover all the losses of thecompany and increase the sale as well as revenues of the Company this year .
3. PROPOSED TRANSFER TO GENERAL RESERVES
This year as per section 134(3) OJ of Companies Act 2013 no amount has transferred tothe General Reserve.
In order to conserve the resources of the Company the director's have decided not todeclare any Dividend for the financial year 2018-19.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
The Company has already launched " Lot us Bawa" brand for leather as well assports footwear. The Company is in process of appointing distributors/stockiest fordifferent regions for marketing the products of Lotus Bawa brand .
The Company has also tied up with new manufacturing brands to achieve the maximumutilization capacity to bring down its fixed overhead cost.
In regard to Coral Mall Project at P.O. Ramdaspura Jalandhar the Company has receivedpollution related clearance and getting the project started as early as possible.
6. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There is none of the above mentioned order(s) which impacts the going concern statusand company's operations in future.
7. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
There is an adequate system of internal controls for the Company. The system isdesigned to adequately ensure the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
The Company also carries out regular int ernal audits to test the adequacy andeffectiveness of its int ernal control processes and also to suggest improvement andupgrades to the Management. The Company has disclosure controls and procedures in placethat are designed to provide reasonable assurance that material information relating toIntellect is disclosed on a timely basis.
8. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY FOR
The Company has adopted measures concerning the development and implementation of aRisk Management Policy after identifying the following elements of risks which in theopinion of the Board may threaten the very existence of the Company itself are asfollows:-
a. High competition from East European countries and other Asian countries
b. International price fluctuation
d. Lack of warehousing support from the government
9. CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Compan ies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure"A" and is attached to this report.
10. CORPORATE SOCIALRESPONSIBILITY
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
11. EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure"B" as Form MGT-9 and is attached to this Report .
12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The particulars of Contracts or Arrangements made with related parties made pursuant toSection 188 is furnished in Annexure "c" as Form AOC-2 and is attached toth is report.
13. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the prov isions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement that:-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period ;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularit ies;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all appl icable laws and that such systems were adequate and operating effectively.
14. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company .
The Company has neither accepted nor renewed any deposits during the year under reviewno amount of principal or interest was outstanding on the date of balance sheet.
16. BOARD MEETINGS BOARD OF DIRECTORS KEY MANAGERIAL PERSONNEL & COMMITTEES OFDIRECTORS
a) Board Meetings
The Board of Directors of the Company met Eight (08) times dur ing the financial year2018-19 . The details of various Board Meetings are provided in the Corporate GovernanceReport .
b) Changes In Directors and Key Managerial Personnel
Designation of Mr Atamjit Singh Bawa Changed from Whole Time Director cumchairman to Whole Time Director (Executive Director) w.e.f.19 .12.2018.
Mr. Chakkarwarti Sharma has been resigned as Chief financial officer under thecategory of KMP of the Company w .e.f. 19.12.2018.
Mr Ramesh Chand Sharma has been appointed as Chief financial officer under thecategory of KMP of the Company w.e.f. 19.12.2018 .
In accordance with the provisions of the Act-
MS.L1SSY JACOB (DIN: 07510795) Director is liable to retire by rotation at thisAnnual General Meeting and being eligible have offers herself for re-appointment.
d) Independent Directors
The Company has received declarations from all the Independent Directors of the Companyunder section 149(7) of the Act that they meet the criteria of independence as laid downunder 149(6) of the Act.
e) Details of Ratio of Remuneration to Directors
The information relating to remuneration of directors as required under Section 197(12)of the Act is given in Annexure "0"
f) Board Committees
The Board has constituted 3 committees which are as follows:-
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
g) Board Evaluation
As required under the provisions of Section 134(3) (p) the Board has carried out anannual performance evaluation of its own performance and the manner in which suchperformance evaluation was carried out is as under:
The performance evaluation framework is in place and has been circulated to all thedirectors to seek their response on the evaluation of the entire Board and independentdirectors. The Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of such as exercise of responsibilities in a bona fidemanner in the interest of the Company striving to attend meetings of the Board ofDirectors/ Committees of which he/she is a member/ general meetings participationconstructively and actively in the meetings of the Board /committees of the Board etc.
In separate meeting if Independent directors performance of non-independent directorsthe chairman of the Company and the board as a whole was evaluated.
i). Vigil Mechanism
The Company has established a Vigil mechanism and Whistle blower policy under which theemployees are free to report violations of applicable laws and regulations and the Code ofConduct . The reportable matters may be disclosed to the Ethics and Compliance Task Forcewhich operates under the supervision of the Audit committee. Employees may also report tothe Chairman of the Audit Committee.
During the year under review no employee was denied access to the Audit Committee.
j) Related Party Transactions
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There were no othermaterial significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
No loans guarantees and investments made by the company during the financial year2018-19 exceeding limit prescribed under Section 186 of Companies act 2013.
M/S VSAP & ASSOCIATES Chartered Accountants (Firm Registration No . 01870SN) wasappointed as statutory auditors of the Company in 38th Annual General Meeting until theconclusion of the 43rd Annual General Meeting of the Company to be held in the calendaryear 2022.
19 SECRETRIALAUDITOR REMARK:-
Secretarial Auditor of company Dinesh Gupta & Co. Jalandhar has risen followingobservation in its secretarial audit report dated-25.05 .2019;
Observations:- a) The Company had not filed e-forms IEPF-2 IEPF-4 & IEPF-6 duringthe financial year 2018-19 with the Ministry of Corporate Affairs as required underCompanies Act 2013 and rules framed there-under;
b) Pursuant to the provisions of the Companies Act 2013 the Company has nottransferred any shares to the Investor Education and Protection Fund against whom thedividend was unpaid/unclaimed for a consecutive period of 7 years. However as per theclarification given by the management the Company is under the process of ascertainingshareholders whose shares are required to be transferred to IEPF in consultation with it sRegistrar and Transfer Agent (RTA).
c) The Company has duly appointed an Internal Auditor for the financial year 2018-19however MGT-14 with respect to the appointment has not been filed by the Company.
Reply of the Board:-a) Company is under the process of ascertaining shareholders whoseshares are required to be transferred to IEPF in consultation with its Registrar andTransfer Agent (RTA) and all pending Eform e-forms IEPF-2 IEPF-4 & IEPF-6 shall befiled with Ministry of Corporate Affa irs.
b) Company is under the process of ascertaining shareholders whose shares are requiredto be transferred to IEPF in consultation with its Registrar and Transfer Agent (RTA) andall shares required to be transferred to IEPF shall be transferred on urgent basi s.
c) Company is under the process of filling MGT-14 urgently.
20. CORPORATE GOVERNANCE
Your Company has been complying with the as applicable provision s of CorporateGovernance as stipulated in SEBI (List ing Obligations & Disclosure Requirements)Regulation s 2015. A separate report on Corporate Governance along with Auditors'certificate on compliance of the as applicable Corporate Governance norms as stipulated inSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and ManagementDiscussion & Analysis forming part of this report are provided elsewhere in thisAnnual Report.
The Register of Members and Share Transfer books of the company will be closed witheffect from 21ST September 2019 to 27th September 2019 (both days inclusive) .
21. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Internal Complaints Committee ("ICC") has been set up to redressthe complaints received regard ing sexual harassment. All employees are covered under thispolicy .
The following is the summary of the complaints received and disposed off dur ing thefinancial year 2018-19 :
(a) No. of complaints received: NIL
(b) No. of complaints disposed: NIL
22. LISTING FEES
The Company confirms that it has paid the annual listing fees for the year 2018-19 toBombay Stock Exchange Limited .
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
| || ||By order of the board of directors |
| || ||For sarup industries ltd |
| ||Simarjit Singh Bawa ||Atamjit Singh Bawa |
| ||Managing Director ||whole-time director |
| ||Din: 00851651 ||Din:00807400 |
|Place: Jalandhar || || |
|Date : 28.08.2019 || || |