Your Directors have pleasure in presenting their 39th Annual Report on theBusiness and operations of a Company and the accounts for the Financial Year ended 31stMarch 2018.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previous yearfigures is given hereunder:
| ||(Fiq in Rs. Lacs) ||(Fiq in Rs. Lacs) |
| ||Year ended March 31st 2018 ||Year ended March 31st 2017 |
|Sales of products and services ||4421.31 ||4971.05 |
|Other Income ||134.35 ||9.63 |
|Total Income ||4555.66 ||4980.68 |
|Total Expenditure other than Interest and Depreciation ||4451.30 ||4571.74 |
|Profit before Interest Depreciation and Tax ||104.36 ||408.94 |
|Depreciation and Amortization Expenses ||189.52 ||173.10 |
|Profit before Interest and Tax ||-85.16 ||235.84 |
|Finance Cost (net) ||243.17 ||181.46 |
|Profit before Tax ||-328.42 ||54.38 |
|Provision for Current Tax ||0.00 ||0.00 |
|Tax expense ||0.00 ||0.98 |
|Provision for Deferred Tax ||0.00 ||2.56 |
|Net Profit ||-328.42 ||50.81 |
|Adjustments in respect of prior years || || |
|Surplus brouqht forward ||144.95 ||133.16 |
|Profit after Tax available for appropriation ||-183.47 ||183.97 |
|Appropriations ||-15.22 ||0.00 |
|Your Directors recommend appropriation as under: || || |
|Proposed Dividend on Equity Shares ||0.00 ||32.52 |
|Dividend Tax on Proposed Dividend ||0.00 ||6.50 |
|Transfer to General Reserve ||0.00 ||0 |
|Income Tax /TDS/ wealth Tax Provision ||0.00 ||0 |
|Surplus Carried Forward ||-198.69 ||144.95 |
|Net Surplus in the Statement of profit and Loss A/c ||-198.69 ||144.95S |
2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
The highlights of the Company's performance are as under:
Revenue from operations decreased this year by 11% to Rs. 442131482/-
Sales also decreased by 11% to Rs. 442131482/-
Further our Company putting the efforts to cover all the losses of the company andincrease the sale as well as revenues of the Company this year.
3. PROPOSED TRANSFER TO GENERAL RESERVES
This year as per section 134(3) 0 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 2017-18.
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 planned to achieve the maximum capacity utilization to bring down theoverhead cost. For this the company has Re-launched "Lotus Bawa" leather Shoesin March 2018. First phase has been already lunched in Andhra Pradesh then Kerala andDelhi also.
Further Company also tied up with Amazon US for "Lotus Bawa" leather ShoeRange in March 2018.
In regard to Coral Mall Project at P.O. Ramdaspura Jalandhar the Company is in laststage to get pollution related clearance and regulatory approvals from Department whichwill be received at any time. The construction of the Mall will be resuming at theearliest after getting all official approvals.
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 internal audits to test the adequacy andeffectiveness of its internal 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 FORTHE COMPANY
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 ENERGY TECHNOLOGY 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 Companies 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 SOCIAL RESPONSIBILITY
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 to thisreport.
13. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions 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 irregularities;
(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 applicable 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 (8) times during the financial year2017-18. The details of various Board Meetings are provided in the Corporate GovernanceReport.
b) Changes In Directors and Key Managerial Personnel
Mr. Ramesh Chand Sharma has been Resigned from the post of Chief Financialofficer 8t KMP of the Company w.e.f. 12.02.2018
Mr. Chakkarwarti Sharma has been appointed as Chief financial officer under thecategory of KMP of the Company w.e.f. 13.02.2018
In accordance with the provisions of the Act-
Mr. Lajpat Sangwan Director is liable to retire by rotation at this AnnualGeneral Meeting and being eligible have offers himself 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 "D"
13 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 directors the 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
f) Board Committees
As per Section 186 of the Companies Act 2013 no loans guarantees and investmentsmade by the company during the financial year 2017-18.
M/S VSAP 8t ASSOCIATES Chartered Accountants (Firm Registration No. 018705N) 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. CORPORATE GOVERNANCE
Your Company has been complying with the provisions of Corporate Governance asstipulated in SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. Aseparate report on Corporate Governance along with Auditors' certificate on compliance ofthe Corporate Governance norms as stipulated in SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 and Management Discussion & Analysis forming part ofthis report are provided elsewhere in this Annual Report.
The Register of Members and Share Transfer books of the company will be closed witheffect from 23rd September 2018 to 28th September 2018 (both days inclusive).
20. 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 regarding sexual harassment. All employees are covered under thispolicy.
The following is the summary of the complaints received and disposed off during thefinancial year 2017-18:
(a) No. of complaints received: NIL
(b) No. of complaints disposed: NIL
21. LISTING FEES
The Company confirms that it has paid the annual listing fees for the year 2017-18 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 Managing Director
Whole-Time Director DIN:00807400