Suraj Ltd Directors Report.

To,

THE MEMBERS

Your Directors have pleasure in submitting their 27th Annual Report of the Company together with the Audited Statements of Accounts of the Company for the year ended on 31st March, 2020.

1. FINANCIAL RESULTS:

During the year under review, the Company has achieved Total Comprehensive income of 86.07 lakhs. However, your Directors look forward to improve the financial position of the Company and are optimistic about the future growth and performance of the Company.

The summarized financial results of the Company for the period ended 31st March, 2020 are as follows:

Particulars

(Rs. in Lakhs)

2019-20 2018-19
Revenue from Operation 17569.71 17,943.70
Other Income 133.75 38.79
Total Income 17703.47 17,982.49
Less: Expenditure 15853.53 16,187.60
Profit/(loss) before Interest, Depreciation, Tax 1907.12 1794.89
Less: Interest 1026.19 1041.33
Less: Depreciation & Amortization Cost 665.06 658.83
Less: Extraordinary items - -
Profit/(loss) Before Tax 158.69 94.73
Less: Tax Expenses 57.18 (46.06)
Profit/(loss) after Tax 101.50 140.79
Other Comprehensive Income (15.44) (1.70)
Total Comprehensive Income for the period 86.07 139.09

2. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report.

3. COVID-19

Due to outbreak of COVID-19 globally and in India, the Companys management has made initial assessment of likely adverse impact on business and financial risks on account of COVID-19. It is well appreciated that the situation as well as its assessment is continuously evolving and the way ahead is to avoid living in denial leading to acceptance & pro-active measures. The Companys management currently believes that the impact is likely to be short term in nature. Given the severity of impact, this financial year is likely to get affected, but also given the measures from Government and inherent resilience in Indian Economy, next year onwards are expected to show normal growth scenarios. Accordingly, at present the management does not see any medium to long term risks in the Companys ability to continue as a going concern and meeting its liabilities as and when they fall due, and compliance with the debt covenants, as applicable.

4. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your company is committed to good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance as laid down in Regulation 27 of SEBI (LODR) Regulations, 2015 are complied with. The details are given in ‘‘Annexure - A".

5. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2020-21 to BSE where the Companys Shares are listed.

6. DEMATERIALISATION OF SHARES:

99.73% of the companys paid up Equity Share Capital is in dematerialized form as on 31st March, 2020 and balance 0.27% is in physical form. The Companys Registrars are M/s MCS share transfer agent Ltd., having their office at, 201, Shatdal Complex, 2nd floor, Opp. Bata Show room, Ashram Road, Ahmedabad, Gujarat - 380009.

7. Number of Board Meetings held:

The Board of Directors met 4 (four) times during the year under review. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Report.

8. DIRECTORS:

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) In the preparation of the annual accounts for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) They have 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 of the company for the same period;

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls with reference to financial statements in the company were operating effectively.

f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

9. AUDIT OBSERVATIONS:

There are no qualifications, reservations or adverse remarks made by M/s. Rinkesh Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, in their report. The observations made by the Statutory Auditors in their report for the financial period ended 31st March, 2020 read with the explanatory notes therein are self explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

AUDITORS:

i) Statutory Auditors:

M/s. Rinkesh Shah & Co., Chartered Accountants, was appointed as Statutory Auditors for a period of 5 year(s) in the Annual General Meeting held on 20th June, 2017 to hold the office till the conclusion of 29th Annual General Meeting of the Company to be held in the year 2022. Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014,

The consent of M/s. Rinkesh Shah & Co., Chartered Accountants, Ahmedabad along with certificate under Section 139 of the Act has been obtained to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company.

ii) Cost Auditors:

M/s. Kiran J. Mehta & Co., Cost Accountants (FRN: 00025) appointed by the Board of Directors of the Company, to conduct the audit of the Cost records of the Company for the financial year 202021 be paid at such remuneration as shall be fixed by the Board of Directors of the Company.

iii) Secretarial Audit:

As per the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, our Company needs to obtain Secretarial Audit Report from Practicing Company Secretary and therefore, M/s RTBR & Associates, Company Secretaries, Ahmedabad had been appointed to issue Secretarial Audit Report for the period ended on 31st March, 2020.

Secretarial Audit Report issued by M/s RTBR & Associates, Company Secretaries in Form MR-3, attached and marked as "Annexure - B", for the period under review forms part of this report. The said report does not contain observation or qualification.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company has constituted a CSR Committee. The Committee comprises with two Independent Directors one whole time director and one is executive director (Chairman & CFO).

In pursuant to provision of section 135 and Schedule VII of the Companies Act, 2013, and CSR policy of company it is required to spend two percent of average net profit of the company for the three immediately preceding financial year.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the "Annexure-C" to this report.

The Company has commissioned windmills at various sites in Gujarat for "Green Energy Generation", thus continuing to contribute, in a small way, towards a greener and cleaner earth.

12. VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

During the period under review, the company had entered into any material transaction with its related party. None of the transactions with any of the related party were in conflict of companies interest. Attention of members is drawn to the disclosure of transactions with related parties set out in note number 27 of financial statements forming part of this report.

14. RETIREMENT BY ROTATION AND SUBSEQUENT RE-APPOINTMENT:

In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. Kunal Shah (DIN: 00254205) and Ms. Shilpa Patel (DIN: 07014883) being liable to retire by rotation, shall retire at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his reappointment.

15. KEY MANAGERIAL PERSONNEL:

As on the date of this report, the following persons are the Key Managerial Personnel(s) of the Company:

1. Ashok T Shah, Chairman & CFO

2. Kunal T Shah, Managing Director & CEO

3. Gunvant T. Shah, Vice Chairman & Whole Time Director

4. Shilpa M. Patel, Whole Time Director

5. Maunish S. Gandhi, Company Secretary & Compliance Officer

The brief resume of the Directors and other related information has been detailed in Corporate Governance Report of Company.

16. EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return in form MGT 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in "Annexure - D" and is attached to this Report.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements for the year ended on 31st March, 2010.

18. REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

Sr. No. Name Designation Remuneration paid FY 2019-20 in Lakh Remuneration paid FY 2018-19 in Lakh Increase in remuneration from previous year in Lakh
1 Mr. Ashok T. Shah Chairman & CFO (ED) 58.20 27.00 31.20
2 Mr. Gunvant T Shah Vice Chairman (ED) 43.20 19.50 23.70
3 Mr. Kunal T Shah Managing Director 51.00 23.00 28.00
4 Ms. Shilpa Patel Whole time Director 14.80 12.30 2.50

19. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided below:

Key Risk Impact to Suraj Ltd Mitigation Plans
Foreign Exchange Risk Company exports all the products to various countries. Any volatility in the currency market can impact the overall profitability. The Company commands excellent business relationship with the buyers. In case of major fluctuation either upwards or downwards, the matter will be mutually discussed and compensated both ways.
Human Resource Risk Companys ability to deliver value is dependent on its ability to attract, retain and nurture talent. Nonavailability of the required talent resource can affect the overall performance of the Company. By continuously benchmarking of the best HR practices across the industry and carrying out necessary improvements to attract and retain the best talent. By putting in place production incentives on time bound basis and evaluating the performance at each stage of work helps to mitigate this risk.
Competition Risk Company is always exposed to competition Risk from various Countries. The increase in competition can create pressure on margins, market share etc. By continuous efforts to enhance the brand image of the Company by focusing on quality, Cost, timely delivery and customer service to mitigate the risks so involved.
Compliance Risk - Increasing regulatory requirements Any default can attract penal provisions. By regularly monitoring and review of changes in regulatory framework and by monitoring of compliance through legal compliance Management tools and regular internal audit.
Industrial Safety The industry is labour intensive and are exposed to accidents, health and injury risk due to machinery breakdown, human negligence etc. By development and implementation of critical safety standards across the various departments of the factory, establishing training need identification at each level of employee helps to mitigate the risk so involved.

20. ACKNOWLEDGEMENT:

Directors take this opportunity to express their thanks to various departments of the Central and State Government, Bankers, Material Suppliers, Customers and Shareholders for their continued support and guidance. The Directors wish to place on record their appreciation for the dedicated efforts put in by the Employees of the Company at all levels.

Date: 10/06/2020 By the order of the Board
Place: Ahmedabad SURAJ LIMITED
Registered Office:-
‘Suraj House, ASHOK SHAH
Opp. Usmanpura Garden, Chairman & Chief Financial officer
Ashram Road, (DIN: 00254255)
Ahmedabad-380014
CIN NO: L27100GJ1994PLC021088