Suraj Ltd Directors Report.

(CIN: L27100GJ1994PLC021088)

To,

THE MEMBERS

Your Directors have pleasure in submitting their 26th Annual Report of the Company together with the Audited Statements of Accounts of the Company for the year ended on 31st March, 2019.

1. FINANCIAL RESULTS:

During the year under review, the Company has achieved Comprehensive income of Rs. 139.09 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, 2019 are as follows:

(Rs. In Lakhs)

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Revenue from Operation 17,943.70 20,701.64 18,154.07 20,731.57
Other Income 38.79 25.48 43.97 25.57
Total Income 17,982.49 20,727.12 18,198.04 20,757.14
Less: Expenditure 16,187.60 19,039.50 16,402.20 19,073.19
Profit/(loss)before Interest, Depreciation, Tax 1794.89 1687.62 1795.84 1683.95
Less: Interest 1041.33 950.19 1041.33 950.19
Less: Depreciation & Amortization Cost 658.83 639.33 658.83 639.33
Less: Extraordinary items 0 0 0 0
Profit/(loss)Before Tax 94.73 98.10 95.68 94.43
Less: Tax Expenses (46.06) 59.41 (46.06) 59.41
Profit/(loss)after Tax 140.79 38.69 141.74 35.02
Other Comprehensive Income (1.70) (1.87) (1.70) (1.87)
Total Comprehensive Income for the period 139.09 36.82 140.04 33.15

2. CONSOLIDATED FINANCIAL STATEMENT:

The Consolidated Financial Statements for the financial year 2018-19 of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and form part of this Annual Report.

3. 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.

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 2019-20 to BSE where the Companys Shares are listed.

6. DEMATERIALISATION OF SHARES:

99.72% of the companys paid up Equity Share Capital is in dematerialized form as on 31st March, 2019 and balance 0.28% 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:

During the year under review, the Board duly met Four (4) times on 26/04/2018, 19/07/2018, 25/10/2018 and 12/01/2019 in respect of said meetings proper notices were given and proceedings were properly recorded and signed in the Minute Book maintained for the purpose. For further details, please refer Corporate Governance 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, 2019, 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 2019 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 2019-20 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 2019.

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. However during the Financial Year (2018-19) CSR is not applicable to the company.

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 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. Ashok Shah (DIN: 00254255) and Mr. Gunvant Shah (DIN: 00254292) 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:

The Board of Directors in their meeting held on 26th April, 2018 accepted the resignation of Mr. Vatan Brahmbhatt from the post of company secretary and compliance officer of the Company. In the said meeting, the Board appointed Mr. Maunish S. Gandhi, Associate Company Secretary as the Company Secretary & Compliance Officer of the Company w.e.f 26th April, 2018.

Further, the Board Directors in their meeting held on 19th July, 2018 approved the resignation from the post of Managing Director of Mr. Ashok Shah and change in designation of Mr. Ashok Shah from MD to Director and CFO.

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

1. Ashok Shah, Chairman & CFO

2. Kunal Shah, Managing Director & CEO

3. Gunvant Shah, Vice Chairman & Whole Time Director

4. Shilpa 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, 2019.

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 2018-19 Remuneration paid FY 2017-18 Increase in remuneration from previous year
Rs. in Lakh Rs. in Lakh Rs. inLakh
1 Mr. Ashok Shah Chairman & CFO (ED) 27.06 NIL 27.06
2 Mr. Gunvant Shah Vice Chairman & WTD(ED) 19.56 NIL 19.56
3 Mr. Kunal Shah Managing Director (ED) 23.06 NIL 23.06
4 Ms. Shilpa Patel Whole Time Director (ED) 12.37 11.77 0.60

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. Non- availability 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: 02.05.2019 By the order of the Board of Directors
Place: Ahmedabad SURAJ LIMITED
Registered Office:
Suraj House, ASHOK SHAH
Opp. Usmanpura Garden, Chairman & CFO
Ashram Road, Ahmedabad-380014 (DIN:00254255)
CIN NO: L27100GJ1994PLC021088