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Surya Funcity Ltd.

BSE: 532028 Sector: Services
NSE: N.A. ISIN Code: INE122F01013
BSE 05:30 | 01 Jan Surya Funcity Ltd
NSE 05:30 | 01 Jan Surya Funcity Ltd

Surya Funcity Ltd. (SURYAFUNCITY) - Director Report

Company director report

FOR THE FINANCIAL YEAR ENDED 31st MARCH 2020

Dear Members

Your Directors have pleasure in presenting the Twenty Seventh Annual Report togetherwith the Audited Accounts of your Company for the financial year ended 31st March 2020.

STANDALONE FINANCIAL RESULTS & APPROPRIATIONS

(Rs. in Lakhs)

Particulars Year ended 31.03.2020 Year ended 31.03.2019
Profit Before Interest and Depreciation 212.57 154.05
Less : Interest 5.89 13.14
Cash Profit 206.68 140.91
Less : Depreciation 81.48 80.10
Add:/Less Extra - Ordinary Item - -
Profit Before Tax And Provision 125.20 60.81
Less : Provision For Tax 28.12 24.30
Profit After Tax 97.08 36.51
Other Comprehensive Income (Expense) (22.55) 2.77
Total Comprehensive Income (Expense) 74.53 39.28

DIVIDEND

Due to inadequacy of profits the company is not in a position to declare any dividendfor the year ended on 31st March 2020.

OPERATIONS

The Company is in the business of Amusement Park Water Park and Resorts. The Turnoverof the Company increased from Rs. 465.22 lac to 532.59 and Profit after Tax increased toRs. 97.08 lac from Rs. 36.51 lac.

Towards the end of the financial year the performance did get impacted due to COVID-19pandemic outbreak resulting in nationwide lockdown and curfew imposed in various parts ofthe country during March 2020 to prevent novel corona virus (COVID-19) from spreading inthe country.

FINANCE

(a) Finance :

The outstanding of the loan as on 31.03.2020 is NIL.

(b) Overdraft Facilities

The Overdraft facilities balance standing as on 31.03.2020 is Rs. 9.81 lac.

TRANSFER TO RESERVE

The Board of Directors has not proposed to any amount for transfer to general reserves.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business.

MATERIAL CHANGE

No material changes and commitments affecting the financial position of the Companyhave occurred during the year under consideration. However the operations of current yearF/Y 2020-21 will get impacted due to closure of Water park and Amusement Park in April2020 till further notice due to COVID-19 pandemic outbreak nationwide lockdown and curfewin various states including Punjab from March 2020.

SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

There are no Subsidiaries/ Joint Ventures. Bonzo Resorts Ltd. is the Associate Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act 2013 Clause of CSR is not applicable.

MANAGERIAL REMUNERATION

Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is enclosed with this report as Annexure — 4.

RECEIPT OF ANY COMMISSION BY MD / WTD FROM A COMPANY OR RECEIPT OF COMMISSION/REMUNERATION FROM ITS HOLDING OR SUBSIDIARY

During the year under review the Managing Director and Whole time Director neitherreceived any Commission nor any remuneration from the Holding Company or SubsidiaryCompanies.

VIGIL MECHANISM

Section 177(9) of the Companies Act 2013 provides for a mandatory requirement for alllisted companies to establish a mechanism called the 'Whistle Blower Policy' for Directorsand employees to report concerns of unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct or ethics policy. In line with thisrequirement the Company has framed a "Whistle Blower Policy". The same isplaced on the Company's website.

RISK MANAGEMENT COMMITTEE

In line with the new regulatory requirements the company has framed a 'Risk ManagementPolicy' to identify and assess the key risk areas monitor and report compliance andeffectiveness of the policy and procedure. A Risk Management Committee under thechairmanship of Mr. Kamaljeet Singh Managing Director has also been constituted tooversee the risk management process in the Company. The other members of the Committee areMr. Chander Dutt Verma Independent Director and Ms. Puneet Arora Whole Time Director.

The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's risk managementsystems and programs comprises of various processes structures and guidelines whichassist the Company to identify assess monitor and manages its risks including anymaterial changes to its risk profile. To achieve this the Company has clearly defined theresponsibility and authority of the Company's Management and the Risk Management Committeeto oversee and manage the risk management Programs. The company has taken Industrial AllRisk Policy to insure its fixed assets and inputs that cover known and unknown riskincluding fire.

INTERNAL FINANCIAL CONTROL SYSTEM

Effective and strong internal control systems are developed in the Company for all themajor processes to ensure reliability of financial reporting safeguarding of assets andeconomical and efficient use of resources as also the compliance of laws regulationspolicies and procedures etc.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business as per the applicableprovisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. No material related party transactions have been enteredby the Company with Promoters Directors or Key Managerial Personnel which had potentialconflict with the interest of Company at large.

The details of related party disclosures and transactions as prescribed in Form AOC-2are attached Annexure — 5. All the related party transactions are done at arm'slength and pertain to the financial year 2018-19.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators Courts orTribunals which would impact the going concern status of the Company and its operationsin future.

DIRECTORS

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Sarabjit Singh shall retire by rotation at the forthcomingAnnual General Meeting and is eligible for re-appointment. The Board of Directors on itsmeeting held on 30th August 2020 re-appointed Mr. Kamaljeet Singh as ManagingDirector for a period of three years.

DECLARATION BY DIRECTORS

The company has received declaration from all the Independent Directors under Section149(7) of the Companies Act 2013 in respect of meeting the criteria of independenceprovided under Section 149 (6) of the said Act.

INDUCTIONS & TRAINING OF BOARD MEMBERS

The company is familiarizing the Independent Directors with regard to their rolerights responsibilities and industry scenario and business model of the company atregular intervals.

PERFORMANCE EVALUATION OF THE DIRECTORS AND MEETING OF INDEPENDENT DIRECTORS

Nomination Remuneration and Evaluation policy has been made by the Nomination andRemuneration Committee. The Nomination and Remuneration Committee has laid down thecriteria for performance evaluation of the individual Directors as well as the Board. Theframework of performance evaluation of the Independent Directors captures the followingpoints:

A) Key attributes of the Independent Directors that justify his/herextension/continuation on the Board of the Company;

B) Participation of the Directors in the Board proceedings and their effectiveness.

The Board adopted a formal mechanism for evaluating its performance as well as of itsCommittees and individual Directors including the Chairman of the Board. The exercise wascarried out through a structured evaluation process covering various aspects of the Boardsfunctioning such as composition of the Board and Committees experience and competenciesperformance of specific duties and obligation governance issues participation andeffectiveness etc.

During the year under review a meeting of Independent Directors was held on 14thFebruary 2020 wherein the performance of the Non Independent Directors and the Board as awhole vis-a-vis the performance of the Chairman of the Company was reviewed.

NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committeeapproved a policy for selection appointment and remuneration of Directors SeniorManagement and Key Managerial Personnel.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a 'Prevention of Sexual Harassment Policy' pursuant to theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaints Committee has been set up to redress complaints received regardingsexual harassment. All employees (Permanent contractual temporary trainees) are coveredunder this policy. No complaint has been received in the year 2017-18.

NUMBER OF BOARD MEETINGS

During the F/Y 2019-20 6 (Six) Board meetings were held on 15 th April2019 29th May 2019 12th August 2019 30th August2019 14th November 2019 and 14th February 2020. One meeting ofIndependent Directors was convened and held on 14 th February 2020. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under section 134(3) (c) read with Section 134(5) of the Companies Act2013 your Directors state that:

(i) in the preparation of the annual accounts for the year ended 31 March 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures;

(ii) such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31 March 2019 and of the profit of thecompany for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

COMPOSITION OF AUDIT COMMITTEE

During the year 5 (Five) Audit Committee meetings were convened and held. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.

AUDITORS & AUDITOR'S REPORT

M/s KD & Associates Chartered Accountants Chandigarh were appointed as theStatutory Auditors of the company at the 24th Annual General Meeting to holdoffice till conclusion of 29th Annual General Meeting. As required underSection 139 of the Companies Act 2013 ratification of their appointment to hold officefrom the conclusion of the 27th Annual General Meeting till the conclusion of28th Annual General Meeting will be taken up at the ensuing Annual GeneralMeeting.

COST AUDITORS

As per the provisions of Section 148 of the Companies Act 2013 the Company is notrequired to appoint Cost Auditors.

SHARE CAPITAL

During the year under review the Company has not issued any equity shares withdifferential rights sweat equity shares or employee stock option.

Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees is not applicable on the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information on conservation of energy technology absorption foreign exchange earningsand outgo required to be given pursuant to Section 134(3)(m) of the Companies Act 2013read with the Companies (Disclosure of particulars in report of Board of Directors) Rules1988 is as follows:

ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION:

The Company had installed D.G. Set of appropriate capacity as stand by source of powerfor backup in case of failure of power from State Electricity Board to avoid energylosses. All the rides are attached with power with automatic power control system.

FOREIGN EXCHANGE:

During the year the company has not earned any foreign exchange.

EXTRACT OF THE ANNUAL RETURN

The extract of annual return in form no. MGT-9 is attached with this report as Annexure-2.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act 2013 Mr. Sandeep Kumar Rishi CompanySecretary has been appointed as Secretarial Auditors to conduct Secretarial Audit of theCompany for the financial year ending 31 March 2020. They have submitted the SecretarialAudit Report which is annexed to this Board's Report as Annexure-3.

ADOPTION OF INDIAN ACCOUNTING STANDARD (IND AS)

The Ministry of Corporate Affairs vide notification dated 16 February 2015 made itmandatory in a phased manner for adoption and applicability of Indian Accounting Standards(Ind AS) for Companies other than Banking Insurance and NonBanking Finance Companies.Rule 4 of the Companies (Indian Accounting Standards) Rules 2015 specifies the classes ofCompanies which shall comply with the Ind AS in preparation of the Financial Statements.In accordance with clause (iii) of Sub rule 1 of the Rule 4 of the Companies (IndianAccounting Standards) Rules 2015 the compliance of Indian Accounting Standard wasapplicable and mandatory to the Company for the accounting period beginning from 1 April2017.

The financial statements for the year under review have been prepared in accordancewith the Ind AS including the comparative information for the year ended 31 March 2017 aswell as the financial statements on the date of transition i.e. 1 April 2016.

GOODS & SERVICE TAX

With the implementation of Goods and Service Tax (GST) from 1st July 2017India has moved toward a single Indirect tax regime for goods and services for the entirecountry with uniform law. The majority of indirect taxes have been subsumed in GST. GST isthe biggest tax reform in the history of Indian Economy and leading to simplify themovement of the goods and services across the country shrinking delivery times andwidening the product markets. The spillover effects of GST are immense from increase inGovernment revenue vis-a-vis better tax compliance and reduced tax evasion enablinggreater control and facilitating efficient monitoring than the traditional taxationsystem. The increased tax revenues of Government would create scope for enhanced publicinvestments in various social and physical infrastructural activities creating furtherscope for the employment generation. However despite the immense potentiality borne byGST towards a higher growth trajectory of Indian economy the industry has been facingenormous problems due to the teething issues during its implementation which are beingaddressed by the Government constantly.

PERSONNEL

Relationship with the employees remained cordial throughout the year in the Company.The Directors express their appreciation for the contribution made by the employees at alllevels to the operations and operational efficiencies of the Company during the year.Annexed to this Board's Report as Annexure-4

CORPORATE GOVERNANCE

In terms of the Regulation 15(2)(a) of Listing Regulations the compliance with thecorporate governance provisions shall not apply in respect of the listed entity havingpaid up equity share capital not exceeding rupees ten crore and net worth not exceedingrupees twenty five crore as on the last day of the previous financial year.

As per the above mentioned criteria provisions of Corporate governance is notapplicable on the Company and therefore the Company is not required to comply with theprovisions of Corporate Governance as specified in Listing Regulations. However theCompany is voluntarily complying with most of the provisions.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

The Company has not extended any loan guarantee or investment under Section 186 of theCompanies Act 2013.

COMMENT ON AUDITOR QUALIFICATION / REMARKS

Secretarial Audit contains a qualification/remark that "2041900 shares held bythe promoters are still in physical form". Company is in process of demat of shares.

Steps are taken

ACKNOWLEDGMENT

Your Directors convey sincere thanks to the various agencies of the Central and StateGovernments Banks and other concerned agencies for all the assistance and cooperationextended to the Company and for their continued support. The Directors also deeplyappreciate and acknowledge the trust and confidence the vendors suppliers dealerscustomers shareholders and investors reposed in the Company. Your Directors also place onrecord their appreciation for the dedicated services rendered by the workers staff andofficers of the Company.

On Behalf of the Board of Directors
Sd/- Sd/-
(Kamaljeet Singh) (Puneet Arora)
Place: Chandigarh Managing Director Whole Time Director
Date: August 30 2020 DIN: 00901140 DIN: 01951008

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