Your Directors have pleasure in presenting their 38th Annual Report on theBusiness and operations of a Company and the accounts for the Financial Year ended 31stMarch 2017.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previous yearfigures is given hereunder:
| ||Year ended ||Year ended |
| ||March 31st 2017 ||March 31st 2016 |
|Sales of products and services ||4971.05 ||4928.88 |
|Other Income ||9.63 ||14.78 |
|Total Income ||4980.68 ||4943.67 |
|Total Expenditure other than Interest and Depreciation ||4571.74 ||4841.19 |
|Profit before Interest Depreciation and Tax ||408.94 ||102.47 |
|Depreciation and Amortization Expenses ||173.10 ||175.07 |
|Profit before Interest and Tax ||235.84 ||(72.6) |
|Finance Cost (net) ||181.46 ||180.64 |
|Profit before Tax ||54.38 ||(253.24) |
|Provision for Current Tax || ||0 |
|Tax expense ||0.98 ||(0.46) |
|Provision for Deferred Tax ||2.56 ||18.16 |
|Net Profit ||50.81 ||(235.53) |
|Adjustments in respect of prior years || ||7.79 |
|Surplus brought forward ||133.16 ||376.48 |
|Profit after Tax available for appropriation ||183.97 ||133.16 |
|Your Directors recommend appropriation as under || || |
|Proposed Dividend on Equity Shares ||32.52 ||0 |
|Dividend Tax on Proposed Dividend ||6.50 ||0 |
|Transfer to General Reserve ||0 ||0 |
|Income Tax /TDS/ wealth Tax Provision ||0 ||0 |
|Surplus Carried Forward ||144.95 ||133.16 |
|Total Appropriation ||144.95S ||133.16 |
2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
The highlights of the Company's performance are as under:
Revenue from operations little increased this year by 0.84% to Rs.497105371/-
Sales also increased by 0.80% to Rs. 496835693/-
Further our Company putting the efforts to increase more sale as well as revenues ofthe ^ Company this year.
3. PROPOSED TRANSFER TO GENERAL RESERVES
This year as per section 134(3) (j) of Companies Act 2013 no amount has transferredto the Genera) Reserve.
The Directors recommended dividend of Rs. 1.00/- i.e.10% per share on Equity shares forthe year ended 31st March 2017 which will attract dividend tax of Rs. 6.50 lakh.
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 have taken many measures to achieve the maximum capacity utilization tobring down the overhead cost. Our company is performing by comparing the results ofinitiatives to objectives and evaluating to what extent we met our targets. Independentlyof that process we are using financial indicators to evaluate our company's businessperformance and compare it to that of market of the same field. The key operationalvariables for performance evaluation are sales and profitability.
For this the company will relaunch its own Brand "LOTUS BAWA" In Septemberand has received good response in the domestic market. The Company is providing trainingto workers and staff to improve the Quality according to the market demand & increaseefficiency of work. This will further reduce the operating cost of the product. Theseimpact overall performance through the ability of the company to offer high levels ofservice to its customers.
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 Ten (10) times during the financial year2016-17. The details of various Board Meetings are provided in the Corporate GovernanceReport.
b) Changes In Directors and Key Managerial Personnel
Mr. Surat Singh Bajwa Director of the Company is ceased to be director of theCompany on account of his sudden death on 14.04.2016
Ms. Lissy Jacob has been appointed as Director of the Company w.e.f. 05.05.2016.
Ms. Manjit Bawa has resigned from the post of Director-cum-Chairman of the Companyw.e.f 05.05.2016.
Ms. Harnarinder Deep Kaur has been appointed as Independent Director of the Companyw.e.f 13.08.2016.
Mr. Simarjit Singh Bawa has been appointed as Managing Director of the Companyw.e.f. 29.09.2016
Mr. Atamjit Singh Bawa has been appointed as Chairman and Whole-Time Director of theCompany w.e.f. 29.09.2016
In accordance with the provisions of the Act-
Ms. Lissy Jacob Director is liable to retire by rotation at this Annual GeneralMeeting and being eligible have offers herself for re-appointment v y
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"
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 shall carry out evaluation ofDirector's performance.
The criteria of evaluation is exercise of responsibilities in a bona fide manner in theinterest of the Company striving to attend meetings of the Board of Directors/ Committeesof which he is a member/ general meetings participation constructively and actively inthe meetings of the Board /committees of the Board etc.
i). Vigil Mechanism
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal or unethical behaviour.
The Company has a Vigil mechanism and Whistle blower policy under which the employeesare free to report violations of applicable laws and regulations and the Code of Conduct.The reportable matters may be disclosed to the Ethics and Compliance Task Force whichoperates under the supervision of the Audit committee. Employees may also report to theChairman 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
As per Section 186 of the Companies Act 2013 no loans guarantees and investmentsmade by the company during the financial year 2016-17.
18. STATUTORY AUDITORS
M/S VSAP & ASSOCIATES Chartered Accountants (Firm Registration No. 018705N) areappointed as statutory auditors of the Company hold office from the conclusion of this38th Annual General Meeting until the conclusion of the 43rd Annual General Meeting of theCompany to be held in the calendar year 2022.
19. CORPORATE GOVERNANCE
Your Company has been complying with the provisions of Corporate Governance asstipulated in SEBI (Listing Obligations 8t 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 8t Analysis forming part of thisreport 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 2017 to 29th September 2017 (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 2016-17:
(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 2016-17 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 Sarup Industries Ltd
| ||Slmarjit Singh Bawa ||Atamjit Singh Bawa |
| ||Managing Director ||Whole-Time Director |
| ||DIN:00851651 ||DIN:00807400 |
|Place: Jalandhar || || |
|Date: 28.08.2017 || || |
r ANNEXURE A'
Forming Part of the Directors' Report
Details of Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo
[Clause (m) of sub-section 134 of the Act read with Rule 8 of the Companies (Accounts)Rules 2014)
A) Conservation of Energy
1) Energy Conservation measures undertaken: -
The Company has always been conscious of the need for conservation of energy and hasbeen sensitive in making progress towards this end. Energy conservation measures have beenimplemented at all the plants and offices of the Company and special efforts are being puton undertaking specific energy conservation projects like:
I. Utilization of lights and other electrical equipments only when need arise.
II. Optimizing chiller/ split/ package AC set to maintain space temperature @ 26 degreecentigrade.
III. Auto shutting down of systems to reduce UPS power consumption.
IV. Any other measures as recommended by the concerned department for maximumconservation.
2) Additional Investments and proposals:
I. Replacement of conventional lighting with energy efficient LED lights to reducelighting power consumption.
II. Expenditure on power and fuel during the year ending 31st March 2017under review is Rs. 113.08 lakh as compared to Rs. 104.33 lakh during year ending 31stMarch 2017.
B) Technology Absorption
(l) Efforts. In brief made towards absorption:
Induction of contemporary technology and continuous improvement projects acrossbusinesses towards reducing process variability cycle time and wastage while enhancingmanufacturing productivity.
The Company is using the modern technology in the manufacturing process. As a resultthere has been a marked Improvement in the quality of the products manufactured by theCompany besides lowering the cost of production. The technology has been fully absorbed.
(II) The benefits derived like product Improvement cost reduction product developmentor Import substitution
(a) Development of products international quality.
(b) New techniques and technology of production.
(c) Provide benefits that are cost effective from both an individual and a companyperspective.
(d) Continuous and strengthened technical efforts for development and Production ofwide range of shoes.
(iii)Details of Import of Technology (imported during the last three years)
The details of which are as follows:-
|S.No. ||Details of Technology Imported ||Technology Import from ||Year of Import ||Status Implementation/ Absorption |
|1. ||EVA and Rubber Mould ||China ||2016-17 ||Already in operations |
|2. ||4 set of Vulcanizing Press for Automatic Rubber Compression Molding Machine for Rubber Outsole ||Taiwan ||2015-16 ||Already in operations |
|3. ||PVC Direct Injection Soling Machine ||Taiwan ||2015-16 ||Already in operations |
|4. ||One screen Printing Dryer Machine ||Honk Kong ||2014-15 ||Already in operations |
(i) Expenditure incurred on Research & Development
|S.No. ||Particulars ||Amount (in Rs.) |
|1. ||Material used ||42339/- |
|2. ||Salary to development & designing Staff and workers ||1678433/- |
(ii) Foreign Exchange Earnings and Outgo
The information relating to foreign exchange earnings and outgo is provided under NoteNo. 29 to the Financial Statements attached herewith.
| ||By Order of the Board of Directors |
| || ||Sarup Industries Ltd |
| ||Simarjit Singh Bawa ||Atamjit Singh Bawa |
| ||Managing Director ||Whole-Time Director |
|Place: Jalandhar ||DIN:00851651 ||DIN:00807400 |
|Date: 28.08.2017 || || |