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Sumeru Industries Ltd.

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Jan 24, 16:00
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Annual Report

For Year :
2015 2013 2011 2010 2009 2008 2006

Director’s Report

Dear Members, The Directors have pleasure in presenting herewith the 22nd Annual Report on the business and operations of the Company together with audited accounts for the financial year ended on 31st March, 2015. 1. Performance of the Company: (Amount in Lacs.) Particulars 2014-15 2013-14 Income from Operation 46.69 62.44 Total income 46.69 62.44 Total Expenditure 40.34 58.35 Profit/(loss) before tax and dep. 6.35 4.09 Provision for depreciation 5.17 1.80 Provision for Tax (0.04) 0.1 Net profit/(loss)aftertaxfortheyear 1.22 2.19 Add: balance B/Ffrom previousyear 292.15 295.22 Profit available for appropriation 293.37 297.41 Less: Excess/(snort) Provision 0 (5.26) Balance carried to next year 293.37 292 15 2. Year under Review: During the year under review, the Company has earned totai Income of Rs. 46,68,997/- (Previous year of Rs. 62,43,906/-) from business. After deducting ail administrative expenses and depreciation and necessary adjustments for taxation, etc. the Company has earned a net orofit of Rs. 1,22,516 (previous year of Rs. 2,19,371/-) 3. State of Company''s Affairs and Changes, If Any: Company was developing a salt pan project for which Company is already in possession of leasehold land in Kutchh district of Gujarat State. The company had Initiated development of pilot project. However, on account of local condition and local environment, Company is facing difficulty in implementing the project. Hence, company has decided to halt all work related to this project. The company is evaluating various options. In course of time, based on the circuinstances, management will take suitable decision. In the meantime Management''s focus will be to concentrate on providing management consultancy services. 4. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. Except the information given in this report, no material changes have taken place after completion of the financial year up to the date of this report which may have substantial effect on business and finances of the Company. 5. Dividend: Due to business needs in future, the directors do not recommend any dividend for the financial year. 6. Unclaimed Dividend: The Company does not have any outstanding unclaimed dividend which is required to be transferred to the Investor Education and Protection Funds as per the provisions of Section 125 of the Comnanies Act, 2013, The Company does not have any outstanding liability on account of Interest and principal of Deposits, Debentures or Share Application Money. 7. Share Capital Structure: During the year under review, there were no changes in the Authorised, Issued, Subscribed and paid up Share Capital Structure of the Company. 8. Deposits: During the year under review, your Company has neither invited nor accepted any public deposit as defined under Section 77 of the Companies Act, 2013. 9. Particulars of loan, guarantees or investments under section 186: Company has not given any loan, not provided any guarantee or any security in connection with a loan to any other body corporate or person during the year under preview. 10. 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: No such order has been passed. 11. Detailsin respectof adequacy of internal financial controls with reference to the Financial Statements. Board members are of the view that commensurate with the size and nature of the business, your Company has maintained adequate Internal Financial control. 12. Corporate Social Responsibility: As per Section 135 of the Companies Act, 2013 and Rules of Companies (Corporate Social Responsibility policy), 2014, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee. As Company does not come under the ambit of above mentioned provisions, Company has nor formed Corporate Social Responsibility Committee and hence Rule 9 of Companies (Accounts) Rule, 2014 regarding disclosure of contents of Corporate Social Responsibility Policy is not applicable to the Company. 13. Conservation of energy, technology absorption, foreign exchange earnings and outgo: The information requires to be disclosed in the report of the Board of Directors as per the provisions of Section 134(3)(m) of the Companies Act, 2013 and Rule 3 of the Companies (Accounts) Rules, 2014 regarding the conservation of energy, technology absorption, foreign exchange earnings and outgo are not applicable to the Company, hence are not given herewith. There were no foreign Exchange earnings or outgo during the year. 14. Dematerialization of securities: Your Company''s Equity shares are admitted in the system of Dematerialization by both the Depositories namely NSDL and CDSL. The Company has signed tripartite Agreement through Registrar and Share Transfer Agent M/s Sharepro Service (India) Private limited. The Investors are advised to take advantage of timely dematerialization of their securities. The ISIN allotted to your Company is INE 764 B01029. Total Share dematerialized up to 31st March 2015 were 54047749 which constitute 75.07% of total capita I. You r Directors req uest all the sha reholders to dematerialize their shareholding in the Company as early as possible. 15. Statutory Auditors: M/s Nitin K. Shah & Co., Chartered Accountants, were re-appointed as Statutory Auditor of the Company for three (3) consecutive years i.e. for the Financial year 2014-15, 2015-16 and 2016-17 in the last Annual General Meeting provided that his appointment shall be subject to ratification in every Annual General Meeting by way of passing of an Ordinary Resolution. M/s Nitin K Shah &Co., present Statutory Auditors of the company has given letter of consent and confirmation under section 139(1) the Companies Act, 2013 for reappointment as Statutory Auditors of the Company. The Board has now proposed to appoint the Statutory Auditors for a further period of 2 years as per requirements of Companies (Audit and Auditors) Rules 2014. Necessary Resolution for ratification of their appointment as the Statutory Auditors for Financial year 2015-16 and fixing their remuneration is proposed to be passed at this Annual General Meeting. 16. Internal Auditors In order to make proper compliance with the provisions of Corporate Governance the Company had appointed M/s. Shailesh Patel & Co., Chartered Accountants as Internal Auditors. They are regularly submitting their reports to the Audit Committee of the Company. They have agreed to be reappointed as the Internal Auditors for the next term. 17. Secretarial Auditor and report thereon: M/s Kamlesh M. Shah, Practicing Company Secretary was appointed as Secretarial Auditor for the financial year 2014-15 as per Section 204 of the Companies Act, 2013. Secretarial Audit report is part of the Board''s Report and attached asAnnexure-1 The Secretarial Auditor has not made any remarks in their report which may require any further clarification from the Board. 18. Extractof Annual Return: The extract of the annual return in Form No. MGT - 9 is part of the Board''s report and attached herewith asAnnexure- II. 19. Directors: A. Changes during the year: a) Resignation of Managing Director: Mr. Nandit V. Raja was re- appointed as Managing Director for the term of 3 years in 21st Annual General Meeting of the Company held on 30th September, 2014. Due to some personal reasons and unavoidable circumstances, Mr. Nandit V. Raja has given resignation form the position of Director and Managing Director on 17th January, 2015. Board has accepted and considered his resignation in the Board Meeting held on 23rd March, 2015. The Board appreciated the services rendered by Mr. Nandit V. Raja during his tenure as Managing Director. b) Appointment of Woman Director: In compliance with Section 149(1) of the Companies Act, 2013, Rule 3 of Companies Appointment and Qualification of Directors And in compliance with Clause 49 11(A) of Listing Agreement, Mrs. Sonal Vipul Raja has been appointed as Woman Director on the Board w.e.f. 31st March, 2015. Appointment of Mrs. Sonal V. Raja as Non-executive, promoter, woman director of the Company was recommended by Nomination and Remuneration Committee. Being appointed as Additional Director, she can serve upto the next Annual general Meeting. c) Appointment of Mr. Vipul H. Raja as Chairman & Managing Director: Mr. Vipul H. Raja is engaged with the Company since its incorporation as he is one of the promoters of the Company. Currently he is serving as Chairman and Director of the Company. Mr: Nandit V. Raja, Managing Director has resigned w.e.f. 23rd March, 2015. Taking into consideration, the qualification and experience of Mr. Vipul H. Raja and in order to fill the resultant vacancy, Nomination and Remuneration Committee recommended to appoint Mr. Vipul H. Raja as Chairman & Managing Director of the Company. The Nomination and Remuneration Committee has decided tnat Remuneration package of Mr. Vipul H. Raja as Chairman & Managing Director, if appointed, will be same as that was of Mr. Nandit V. Raja, former Managing Director. But, looking into current business operations of the Company, Mr. Vipul H. Raja has agreed to work without remuneration as Chairman & Managing Director, if appointed. Mr. Vipul H. Raja, Chairman and Managing Director shall retire by rotation at the ensuing Annual general Meeting as per provisions of law. He is eligible for reappointment and offered himself for directorship of the Company. Your directors recommended for his re-appointment. d) Mr. Bhavin D. Mashruwala and Mr. Ambalal C. Patel were appointed as Independent Directors on the Board liable to retire by rotation. Now, Board recommends appointment of Mr. Bhavin D. Mashruwala and Mr. Ambalal C. Patel as Independent Directors under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement in the ensuing General Meeting for 4 consecutive years i.e. for a term upto the conclusion of 26th Annual General Meeting of the Company in calendar year 2019. B. Declaration as to Independent Directors: (Pursuant To Provisions of Section 149(6) of the Companies Act 2013). All the Independent Directors of the Company do hereby declare that: (a) All the Independent Directors of the Company are neither Managing Director, nor a Whole Time Director nor a Manager or a Nominee Director. (b) All the Independent Directors in the opinion of the Board are persons of integrity and possesses relevant expertise and experience. (c) (i) Independent Directors are or were not a Promoter of the Company or its Holding or subsidiary or associate company. (it) Independent Directors are or were not related to promoters or directors in the company, its holding, subsidiary or associate company. (d) Independent Directors have or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year. (e) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary, or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lakhs rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year, (f) Independent Directors, neither himself, nor any of Ins relatives, i. Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of three financial years immediately preceding the financial year in which he is proposed to be appointed. ii. Is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial years in which he is proposed to be appointed, of- (A) A firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or (B) Any legal or a consulting firm that has or had any transaction with tne company, its holding, subsidiary or Associate company amounting to ten per cent, or more of the gross turnover of such firm; iii. Holds together with his relatives less than two per cent, or more of the total voting power of the company; or iv. Is a Chief Executive or director, by whatever name called, or any non-profit organization that receives twenty five per cent or more of its receipts from the Company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or mere of the total voting power of the company; or (g) Independent Directors possesses such other qualifications as may be prescribed. C. Director''s Responsibility Statement: Pursuant to the provision contained in Section 134(5) of the Companies Act 2013, the Directors of your Company confirm that- (a) in the preparation of the annual accounts, as far as possible and to the extent mentioned by the Auditors in their report, the applicable accounting standards has been followed and no material departure has been made from the same; (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 affair of the Company at the end of the financial year and of the profit or 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 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 operative 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. D. Disclosure as per companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year: Total Remuneration expenses: Rs. 7,63,000/- Managerial Remuneration Expenses: Rs. 4,50,000/- (paidtoMr. Nandit V. Raja as MD) Other employees Remuneration: Rs. 3,13,000/- ii) The percentage increase in remuneration of each director. Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: Only Managing Director Mr. Nandit V. Raja was being paid Managerial Remuneration. No other director is paid any Remuneration, Commission on net profit or any other benefits. Company has appointed Company Secretary in the month of November, 2014. There was no Increase in remuneration of any of the Managing Director, Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager during the year. iii) The percentage increase in the median remuneration of employees in the financial year is 10% iv) The number of permanent employees on the rolls of company; 3 (Three) v) The explanation on the relationship between average increase in remuneration and company performance; The increase in remuneration of employees are considered on the overall economic condition, Industry trend and inflammatory pressure. vi) Comparison of the remuneration of the Key managerial personnel against the performance of the company ; The KMP i.e. Managing Director is being paid Remuneration of Rs. 45,000/- per month since last 5 years which is kept constant. There is no increase of any amount of remuneration during fast 5 years. Company Secretary is appointed w.e.f. November, 2014 and Remuneration payable is Rs. 15,000 per month which is in accordance with the performance of the Company. vii) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year; Closing Market Price of shares of Company as on 31/03/2014 : Rs.0.64/- Closing Market Price of shares of Company as on 31/03/2015 : Rs.0.55/- Earnings Per share for the financial year ended on 31/03/2014 : Rs.0.003/- Earnings per share for the financial year ended on 31/03/2015 : Rs.0.002/- Based on the Closing Price as on 31st March, 2015, P/E Ratio is minimum. viii) Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; NOT APPLICABLE as there was no increase in Remuneration of Managerial Personnel whereas remuneration of employees increased by 10%. ix) Comparison of the remuneration of each key managerial personnel against the performance of the company; Not Comparable, as the Company has decided to halt all work related to Salt project. x) The key parameters for any variable component of remuneration availed bv the directors; NOT APPLICABLE. xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; and No employee is receiving remuneration in excess or higher than the remuneration of Director or Key Managerial Personnel. xii) Affirmation thatthe remuneration is as per the remuneration policy of the company. All remuneration of the Employees and directors are decided by Nomination & Remuneration Committee and by the Board of Directors within the organization. E. Formal Annual Evaluation Process by Board: During the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. 20. Number of meetings of the Board of Directors: 8 21. Audit Committee: The composition of Audit Committee is as follows: Name Designation Mr, Bhavin D. Mashruwala Chairman Mr. Vipul H. Raja Member Mr. A. C. Patei Member The members of Audit Committee met 4 times in a year and gap between two meetings was not more than four months. 22. Nomination and Remuneration Committee: Name Designation Mr. Bhavin D. Mashruwala Chairman Mr. Vipul H. Raja (uptcSth May, 2015) Member Mr. A. C. Patel Member Mrs. Sonal V. Raja (w.e.f. 8th May, 2015) Member The Nomination & Remuneration Committee met 2 times during the year. 23. Establishment of code of conduct for directors and senior management persons: To enhance ethical and transparent process in managing the affairs of the Company, Board of Directors have adopted Code of Conduct for Board of Directors and Senior Management Personnel as per Clause 49 HE of the listing Agreement. The same is posted on website of the Company. 24. Establishment of vigil mechanism for directors and employees: Company has adopted vigil mechanism called Whistle blower Policy, for directors and employees to report to the management, instances of unethical behaviour, fraud or violation of the Company''s code of Conduct or ethics policy. The same is posted on website of the Company. 25. Prevention of InsiderTrading: The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is dosed. The Board is responsible for implementation of the Code. All members of the Board Directors and the designated employees have confirmed compliance with the Code. 26. Particulars of contracts or arrangements with related parties under section 188(1): During the financial year 2014-15, there was no transaction for sell/purchase of goods or services of material nature with its promoters, directors, management, or relatives etc, which may have potential conflict with interest of the Company at large. However, details of transactions with related parties are given in note 14 of notes to accounts by Auditors as per Accounting Standard 18. 27. Particulars of development and implementation of a Risk Management Policy: Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a business risk management committee. The details of the committee and composition are set out in the corporate governance report forming part of the Boards report. At present the company has not identified any element of risk which may threaten the existence of the company. 28. Corporate Governance and Management Discussion 8i Analysis Report: The Corporate Governance ana Management Discussion & Analysis Report, which form an integral part of this Report, are set out as Annexure- III. Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in, Clause 49 of the Listing Agreement is set out as Annexure- IV. 29. Appreciation: Your directors take this opportunity to acknowledge the trust reposed in your Company by its shareholders, Bankers and clients. Your Directors also keenly appreciate the dedication and commitment of all our employees, without which the continuing progress of the Company would not have been possible. PLACE: AHMEDABAD DATE : 01-08-2015 FOR&ON BEHALF OF THE - BOARD OF DIRECTORS VIPUL H. RAJA CHAIRMAN & MANAGING DIRECTOR DIN-00055770

Director’s Report