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Sarup Industries Ltd.

BSE: 514412 | NSE: | Series: NA | ISIN: INE305D01019 | SECTOR: Leather Products

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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Director’s Report

To

The Members

The Directors have pleasure in presenting their 37th Annual Report on the Business and operations of a Company and the accounts for the Financial Year ended 31st March, 2016.

1. FINANCIAL RESULTS

The Company''s financial performance for the year under review along with previous year figures is given hereunder:

(Fig in Rs. Lacs) (Fig in Rs.Lacs)

Year ended March 31st 2016

Year ended March 31st 2015

Sales of products and services

4928.88

6958.00

Other Income

14.78

31.89

Total Income

4943.67

6989.89

Total Expenditure other than Interest and Depreciation

4841.19

6369.17

Profit before Interest, Depreciation and Tax

102.47

620.72

Depreciation and Amortization Expenses

175.07

181.92

Profit before Interest and Tax

(72.6)

438.80

Finance Cost (net)

180.64

184.51

Profit before Tax

(253.24)

254.29

Provision for Current Tax

0

50.86

Tax expense

(0.46)

0

Provision for Deferred Tax

18.16

0

Net Profit

(235.53)

203.43

Adjustments in respect of prior years

7.79

418.86

Surplus brought forward

376.48

686.81

Profit after Tax available for appropriation

133.16

471.38

Your Directors recommend appropriation as under:

Proposed Dividend on Equity Shares

0

58.54

Dividend Tax on Proposed Dividend

0

11.69

Transfer to General Reserve

0

25.00

Income Tax /TDS/ wealth Tax Provision

0

(0.33)

Surplus Carried Forward

133.16

376.48

Total Appropriation

133.16

471.38

2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY''S AFFAIRS

Due to overall slump in our Industry, sale as well as revenue of the Company is decreased.

The highlights of the Company''s performance are as under:

- Revenue from operations decreased this year by 29.23% to Rs. 49,29,34,626

- Sales decreased by 29.16% to Rs. 49,28,88,950

Further our Company putting the efforts to cover all the losses of the company 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) (j) of Companies Act, 2013 no amount has transferred to the General Reserve.

4. DIVIDEND

In order to conserve the resources of the company, the Directors have decided not to declare any dividend for the financial year 2015-16.

5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The Company has planned to achieve the maximum capacity utilization to bring down the overhead cost. For this, the company has already started the process to launch its own Brand LOTUS BAWA and receiving good response in the market. The Company is providing training to workers and staff to improve the Quality according to the market demand & increase efficiency of work. This will further reduce the operating cost of the product.

Company has resumed the remaining Construction Work of the Mall Project at P.O. Ramdaspura, Jalandhar from February, 2015. The Company along with M/s. EMAAR MGF Land Limited has inked an Agreement with M/s. Shalimar Corp Limited to carry on the further development work of the Project. The construction of Mall at PO Ramdaspura, Nakodar Road, Jalandhar is going on and expected to be completed by 31st March, 2018.

6. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS 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 status and company''s operations in future.

7. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

There is an adequate system of internal controls for the Company. The system is designed to adequately ensure the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company also carries out regular internal audits to test the adequacy and effectiveness of its internal control processes and also to suggest improvement and upgrades to the Management. The Company has disclosure controls and procedures in place that are designed to provide reasonable assurance that material information relating to Intellect is disclosed on a timely basis.

8. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY FOR THE COMPANY

The Company has adopted measures concerning the development and implementation of a Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself are as follows:-

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, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 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 Responsibility initiatives 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 Rule 12 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 to Section 188 is furnished in Annexure C as Form AOC-2 and is attached to this report.

13. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement that:-

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively.

(f) The directors had devised proper systems to ensure compliance with the provisions of 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.

15. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review, no amount of principal or interest was outstanding on the date of balance sheet.

16. BOARD MEETINGS, BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL & COMMITTEES OF DIRECTORS

a) Board Meetings

The Board of Directors of the Company met nine (9) times during the financial year 2015-16. The details of various Board Meetings are provided in the Corporate Governance Report.

b) Changes In Directors and Key Managerial Personnel

- Mr. Amit Kumar has resigned from the post of the Company Secretary & KMP of the Company w.e.f 15.06.2015

- Ms. Megha Gandhi has been appointed as Company Secretary cum Compliance Officer and KMP of the Company w.e.f. 01.08.2015

- Col. Gurcharan Singh has resigned from the post of Director, due to personal reasons w.e.f 13.11.2015.

- Mr. Surat Singh Bajwa, Director of the Company is ceased to be director of the Company on account of his sudden death on 14.04.2016

- Ms. Lissy Jacob has been appointed as Additional Director of the Company w.e.f. 05.05.2016 who holds office up to the date of this Annual General Meeting.

- Ms. Manjit Bawa has resigned from the post of Director-cum-Chairman of the Company, due to her personal reasons w.e.f 05.05.2016.

- Mr. Atamjit Singh Bawa who is rendering the services as Managing Director of the Company, has been appointed as Chairman of the Board w.e.f 09.07.2016

c) Re-Appointment

In accordance with the provisions of the Act-

Mr. Lajpat Sangwan, Director is liable to retire by rotation at this Annual General 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 Company under section 149(7) of the Act, that they meet the criteria of independence as laid down under 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 4 committees which are as follows:-

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders'' Relationship Committee

4. Risk Management Committee

g) Board Evaluation

As required under the provisions of Section 134(3) (p) the Board has carried out an annual performance evaluation of its own performance, and the manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration Committee shall carry out evaluation of Director''s performance.

The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he is a member/ general meetings, participation constructively and actively in the meetings of the Board /committees of the Board, etc.

i). Vigil Mechanism

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior.

The Company has a Vigil mechanism and Whistle blower policy under which the employees are 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 which operates under the supervision of the Audit committee. Employees may also report to the 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 on arm''s length basis and were in the ordinary course of business. There were no other material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict 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 investments made by the company during the financial year 2015-16.

18. STATUTORY AUDITORS

M/s Y.K. Sud & Co., Jalandhar, Chartered Accountants who are the statutory auditors of the Company hold office as Statutory Auditors until the conclusion of the 38th Annual General Meeting of the Company to be held in the calendar year 2017.

Their appointment is subject to ratification by the members at the 37th Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

19. CORPORATE GOVERNANCE

Your Company has been complying with the provisions of Corporate Governance as stipulated in Clause 49 of the old Listing Agreement & SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. A separate report on Corporate Governance along with Auditors'' certificate on compliance of the Corporate Governance norms as stipulated in SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

The Register of Members and Share Transfer books of the company will be closed with effect from 23rd September, 2016 to 29th September, 2016 (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 requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed off during the financial year 2015-16:

(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 to Bombay Stock Exchange Limited.

22. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

By Order of the Board of Directors

Sarup Industries Ltd

Atamjit Singh Bawa Simarjit Singh Singh

Managing Director Whole-Time Director

Place: Jalandhar

Date: 25.08.2016

Director’s Report