To,
The Members,
Suraj Industries Ltd
Your Directors hereby present the 32nd Annual Report along with the Audited Standalone and Consolidated Financial Statement of Accounts for the Financial Year ended March 31 2024.
FINANCIAL PERFORMANCE OF THE COMPANY
The financial performance of the Company for the year under review and comparative figures for the previous year are summarized below:
(Amount in Lakhs)
Standalone
Consolidated
--
PERFORMANCE OF BUSINESS OR RESULTS OF OPERATIONS Standalone
During the financial year 2023-2024 under review, the total Revenue of the company was Rs. 5176.53 lakh as against Rs. 6822.45 lakh in the previous year and the net profit after tax was Rs. 157.11 Lakhs as compared to profit of Rs. 479.40 Lakhs in the previous financial year 2022-23.
During the financial year 2023-2024 under review, as per the Consolidated Financial Statements, the net profit is Rs. 445.90 Lakhs which includes share of profit of Associate company amounting to Rs 297.36 Lakhs as compared to profit of Rs. 743.50 Lakhs (inclusive of associate's profit of Rs. 264.11 Lakhs) in the previous financial year.2022-23.
STATE OF COMPANY'S AFFAIRS AND OUTLOOK
Company is into the business of (i) trading edible oils and other products, which consist Palm Oil, Soybean Oil, Rice etc and (ii) processing and bottling of Liquor.
The company is engaged in two business verticals-
a) Trading Business
Trading of edible oils and other products, which consist Palm Oil, Soybean Oil, Rice flakes, Malt, Empty Glass bottles; and
b) Liquor Business
? Processing and Bottling of Rajasthan Made Liquor (RML) for Rajasthan State Ganganagar Sugar Mills Limited (RSGSM), a Government of Rajasthan undertaking having exclusive wholesale rights for Country Liquor and RML in the State of Rajasthan.
? The company has also started to manufacture and sell Country Liquor in its own brands.
? On May 24, 2024, the Company has commenced commercial production in new fully automatic Liquor Bottling line installed at the premises of M/s Rajasthan State Ganganagar Sugar Mills Ltd. ("RSGSM") at Near Railway Station , Mandore, Jodhpur, Rajasthan-342006 for manufacturing of Country Liquor for Rajasthan State Ganganagar Sugar Mills Limited (RSGSM) having a capacity of the Bottling line as 2200 cases per day (one case contains 48 bottles of 180 ml).
The liquor business is the major focus area for the Company as a step towards growth and enhancing its business prospect.
SHARE CAPITAL OF THE COMPANY
The Authorised Share capital of the Company as on March 31, 2024 was Rs. 20,00,00,000/- (Rupees Twenty Crore Only) divided into 2,00,00,000 (Two Crore only) equity shares of Rs. 10/- (Rupees Ten Only) each.
The paid up equity share capital as on March 31,2023 was Rs. 12,29,41,720/- (Rupees Twelve Crore Twenty-Nine Lakh Forty-One Thousand Seven Hundred Twenty Only) divided into 1.29,94,172 (One Crore Twenty-Nine Lakh Ninety Four Thousand One Hundred and Seventy Two only) Equity Shares of Rs. 10/- (Rupees Ten) each.
During the financial year 2023-24 the Company has allotted 5,51,724 equity shares of Rs. 10 each in following manner: -
? On October 07, 2023, the Company has approved the allotment of 2,75,862 Equity Shares of face value of Rs. 10/- each pursuant to conversion of 2,75,862 Fully Convertible Warrants ("Warrants"), issued and allotted as on May 12, 2022, at an issue price of Rs. 145/- each, by way of preferential allotment on a private placement basis, to the person belonging to ‘Promoter and Promoter group'
? On October 21, 2023, the Company has approved the allotment of 2,75,862 Equity Shares of face value of Rs. 10/- each pursuant to conversion of 2,75,862 Fully Convertible Warrants ("Warrants"), issued and allotted as on May 12, 2022, at an issue price of Rs. 145/- each, by way of preferential allotment on a private placement basis, to the person belonging to ‘Promoter and Promoter group'.
As a result, of the above allotments the paid up equity share capital of the Company as on March 31,2024 was Rs. 12,84,58,960/- (Rupees Twelve Crore Eighty-Four Lakh Fifty-Eight Thousand and Nine Hundred Sixty Only) divided into 1,28,45,896 (One Crore Twenty-Eight Lakh Forty-Five Thousand Eight Hundred and Ninety-Six Only) Equity shares of Rs. 10/- (Rupees Ten) each.
UPDATE ON RIGHT ISSUE OF EQUITY SHARES
On February 10, 2023, the Board of Directors approved the raising funds for the Company by way of issue of securities (the "issue") to the existing equity shareholders of the Company on a right basis aggregating up to Rs. 20 Crore (Twenty Crore Only).
On December 18, 2023, the Right issue committee of the Board of Directors of your Company approved to rights issue of up to 29,97,375 partly paid-up equity shares of the face value of Rs. 10 each ("Rights equity shares") of the company for cash at a price of Rs. 65/- per rights equity share (including a premium of Rs. 55/- per rights equity share) for an amount aggregating up to Rs. 1,948.29/- lakh on a rights basis to the eligible equity shareholders of the company in the ratio of 7 (Seven) rights equity shares for every 30 (thirty) fully paid-up equity shares held by the eligible equity shareholders of the company to meet the objects as mentioned in the letter of offer filed with the BSE Limited
The Company appointed M/s Beetal Financial and Computer Services Private Limited as Registrar to the Issue and IDBI Bank Limited, Banker to the Issue. Subsequently the Board of Directors at their Meeting held on July 04, 2024 fixed July 10, 2024 as Record Date and approved the issue period. from July 22, 2024 to August 05, 2024 and the last date for On Market trading of Rights Entitlements was July 30, 2024., The basis of allotment was approved by the Right Issue Committee of the Board of directors on August 09, 2024 in consultation with BSE Limited, the designated Stock Exchange and M/s Beetal Financial and Computer Services Private Limited.
The Right issue committee of the Board of Directors at their meeting held on August 09,2024 allotted 29,97,375 partly paid up equity shares to the Shareholders of the Company and further obtained the listing approval from BSE Limited on August 12, 2024 and received the trading approval from BSE Limited on August 19,2024
On August 24,2024, the Board of Directors of the Company has fixed the record date i.e. Wednesday, September 04, 2024 and period for first and final call i.e. payable from Friday, September 06, 2024 to Saturday, October 05, 2024, both days inclusive ("Call Payment Period") in respect of 29,97,375 outstanding partly paid-up equity shares having face value Rs. 10/- each (Rs. 5/- paid up) issued on rights basis pursuant to Letter of Offer dated July 04, 2024.
DIVIDEND
The Board of Directors ("Board"), after considering holistically the relevant circumstances and keeping in view the tremendous growth opportunities that your company is currently engaged with, has decided that it would be prudent not to recommend any dividend for the financial year 2023-24 under review.
AMOUNT TRANSFERRED TO RESERVES
No amount was transferred to reserves during the financial year 2023-24 under review.
CREDIT RATING
During the year under review, the Company was not required to have credit rating.
DIRECTORS AND KEY MANAGERIAL PERSONNELS
As of March 31, 2024, your Company's Board had six members comprising of two Executive Directors, one Non-Executive and Non-Independent Director, one Non-Executive and Nominee Director and two Non -Executive Independent Directors including one women Independent Director. The details of Board and Committee composition, tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.
The composition of the Board of Directors as on March 31,2024 are as follows:
None of the Directors are disqualified under Section 164(2) of the Companies Act, 2013. Further, they are not debarred from holding the office of Director pursuant to order of SEBI or any other authority.
* Mr. Syed Azizur Rahman has tendered his resignation from the position of Chairperson and NonExecutive & Non-Independent Director in the Company vide his resignation letter dated July 01, 2024 with effect from the close of business hours of July 04, 2024.
# Mr. Sanjay Kumar Jain, Non-Executive Nominee Director of the Company has appointed as NonExecutive Chairperson of the Company with effect from July 05, 2024.
Changes in the composition of the Board of Directors and Key Managerial Personnel
The following changes occurred during FY 2023-24 till the date of this Report:
During the Financial Year 2023-24 till the date of this Report , following changes took place in the Directors and Key Managerial Personnel of the Company, pursuant to the applicable provisions of the Companies Act, 2013 read with the rules made thereunder (including any statutory modification
(s) or re-enactment thereof for the time being in force), SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 and on the recommendation of Nomination and Remuneration Committee:-
i. Re- appointment of Mr. Ashu Malik (DIN: 07998930) as Whole-time Director of the Company for a period of one (1) year with effect from June 27, 2023 subject to the approval of the members of the Company. Later shareholders in their meeting held on September 26, 2023 had approved his re-appointment as Whole Time Director for a further period of one year effective from June 27, 2023.
ii. Mr. Sanjai Kapoor resigned from the position of Chief Financial Officer of the Company with effect from November 03 ,2023..
iii. Mr. Somir Bhaduri was appointed as Chief Financial Officer of the Company with effect from February 02 ,2024.
iv. Mr. Syed Azizur Rahman resigned from the position of Chairperson and Non-Executive & NonIndependent Director in the Company vide his resignation letter dated July 01, 2024 with effect from the close of business hours of July 04, 2024.
v. Mr. Sanjay Kumar Jain, Non-Executive Nominee Director of the Company has appointed as NonExecutive Chairperson of the Company with effect from July 05, 2024.
vi. The Board appointed Mr. Vyom Goel (DIN: 10063284) as Additional Non-Executive Non Independent Director of the Company w.e.f. August 13, 2024 whose appointment as Director under section 152(6) of the Companies Act, 2013 is subject to approval of the members at the ensuing 32nd Annual General Meeting ("32nd AGM").
In order to comply with the provisions of Section 152 (6) of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, executive directors and nonexecutive directors except the Independent Directors are subject to retire by rotation. Based on the terms of appointment and the Articles of Association of your Company, Mr. Ashu Malik (DIN: 07998930 ) who is the longest serving member in the current term and is liable to retire by rotation, being eligible offers himself for re-appointment.
Appropriate resolutions seeking their appointment/re-appointment are being placed for your approval in the ensuing Annual General Meeting.
Key Managerial Personnel
During the year under review, the Company is having the following persons as Key Managerial Personnel. in accordance with provisions of Section 203 of the Companies Act, 2013,
* Mr. Sanjai Kapoor resigned from the position of Chief Financial Officer of the Company with effect from November 03,2023.
# Mr. Somir Bhaduri was appointed as Chief Financial Officer of the Company with effect from February 02,2024.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the Annual Accounts for the financial year ended March 31, 2024, the applicable Accounting standards have been followed and that there are no material departures.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the Financial year ended March 31, 2024.
iii) 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.
iv) That accounts for the year ended March 31, 2024 have been prepared following the going concern basis.
v) 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.
vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to section 135 of the Companies Act, 2013, every company having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more, or a net profit of Rs. 5 crore or more during the immediate preceding financial year shall contribute at least two percent of the average net profits of the company made during the three immediately preceding financial years. In the FY 2022-23, the net profit of the company exceeded Rs. 5 Crore and therefore the provisions of section 135 became applicable to the Company. The Board has also approved the Corporate Social Responsibility Policy ("CSR Policy"). The salient features of the Policy forms part of the Annual Report on CSR activities annexed to the Board's Report. The CSR policy is available on the website of the Company at https://www.suraiindustries.org/policv/CSR%20Policv SIL.pdf .In compliance with the provisions of Section 135(9) read with Section 135(1) of the Act and Rules made thereunder, if the amount to be spent by a company under sub-section (5) does not exceed Rupees Fifty Lakh, the requirement under subsection (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and accordingly, the functions of Corporate Social Responsibility Committee shall be discharged by the Board of Directors of the Company.
The objective of the Company's Corporate Social Responsibility ("CSR") initiatives is to improve the quality of life of communities through long-term value creation for all stakeholders. The Company's key objective is to make a difference to the lives of the underprivileged, promote development through social and economic transformation and help them to bring a self-sustaining level.
During the financial year 2023-24, the Company was required to spend Rs. 8.86 Lakhs. The Company has met its CSR obligation by spending Rs. 8.86 Lakhs during the year. The brief details of the CSR obligations undertaken by the Company during the year under review has been annexed as "Annexure - III".
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE OF INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
The Board is of the opinion that all the independent directors appointed are having good integrity and possess the requisite expertise and experience (including the proficiency). Independent Directors have confirmed that they are not aware of any circumstances or situation, which exist or may be reasonably
anticipated that could impair or impact their ability to discharge their duties. Based on the declarations received from the independent directors, the Board has confirmed that they meet the criteria of independence and that they are independent of the management.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial Position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report except the following:
1. The Board of Directors of the Company in their meeting held on May 01, 2024, has approved the proposal for shifting of registered office of the Company from the State of Himachal Pradesh to State of NCT of Delhi. The same has been approved by the shareholders of the Company in the EGM held on May 30, 2024.
2. On May 24, 2024, the Company has commenced commercial production in new fully automatic Liquor Bottling line installed at the premises of M/s Rajasthan State Ganganagar Sugar Mills Ltd. ("RSGSM") at Near Railway Station , Mandore, Jodhpur, Rajasthan-342006 for manufacturing of Country Liquor for RSGSM having a capacity of the Bottling line as 2200 cases per day (one case contains 48 bottles of 180 ml).
3. The Board of Directors in their meeting held on May 31, 2024, has approved to give Corporate Guarantee in favour of UCO Bank, Hazratganj branch, Lucknow to secure the credit facilities to the extent of Rs. 186.89 Crore sanctioned by UCO Bank to M/s Carya Chemicals & Fertilizers Private Limited ("CARYA"), a material Subsidiary Company of the Company, for setting up distillery unit and bottling plant for manufacturing of IMFL and Country Liquor at Plot No. SP1-2, RIICO Industrial Area, Guwadi & Majhari, Block Shahbad, Dist. Baran, Rajasthan Baran, Rajasthan.
4. On August 09,2024, the Right Issue committee of the Board of Directors has approved the allotment of 29,97,375 Partly Paid-up Equity Shares ("Rights Equity Shares") of face value of Rs.10/- each (Rs. 5/- paid-up) on rights basis at an issue price of Rs. 65/- per Rights Equity Share (including a premium of Rs. 55/- per Rights Equity Share).
5. The Board of Directors of the Company has fixed the record date i.e. Wednesday, September 04, 2024 and period for first and final call i.e. payable from Friday, September 06, 2024 to Saturday, October 05, 2024, both days inclusive ("Call Payment Period") in respect of 29,97,375 outstanding partly paid-up equity shares having face value Rs. 10/- each (Rs. 5/- paid up) issued on rights basis pursuant to Letter of Offer dated July 04, 2024.
COMMITTEES OF THE BOARD
As required under the Act and the SEBI Listing Regulations, the Company has constituted various Statutory Committees. Additionally, the Board has formed other governance committees to review specific business operations and governance matters including any specific items that the Board may decide to delegate. As on March 31, 2024, the Board has constituted the following committees / subcommittees.
Statutory Committees:
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
Governance Committees:
a) Preferential Issue Committee
b) Right Issue Committee
c) Investment Committee
Details of all the committees such as terms of reference, composition, and meetings held during the year under review are disclosed in the Corporate Governance Report, which forms part of this Integrated Annual Report.
STATUTORY AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 139 of the Companies Act, 2013 (‘the Act'), read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company at their 30th Annual General Meeting held in the year 2022, approved the appointment of M/s. Pawan Shubham & Co, Chartered Accountants (FRN 011573C) as the Statutory Auditors of the Company for a term of 5 years i.e. from the conclusion of 30th Annual General Meeting till the conclusion of ensuing 35th Annual General Meeting of the Company.
The Audit reports dated May 28, 2024 (Standalone UDIN: 24523411BKAPER5188) (Consolidated UDIN: 24523411BKAPES6818) issued by M/s. Pawan Shubham & Co, Chartered Accountants, Statutory Auditors on the Company's standalone and consolidated financial statements for the financial year ended March 31,2024 is part of the Annual Report.
The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report on Standalone and Consolidated financial statements does not contain any qualification, reservation or adverse remark. The Auditor's Report on Standalone and Consolidated financial statements are enclosed with their Financial Statements in this Annual Report.
During the financial year, there have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of Companies Act, 2013 read with rules framed thereunder, either to the Company or to the Central Government.
SECRETARIAL AUDITOR & THEIR REPORT
In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board of Directors based on the recommendation of the Audit Committee appointed CS Ashok Ranjan Mishra, Proprietor of M/s. A R Mishra & Associates (CP No:22727, M.No.: FCS 5377), Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2023-24.
The Secretarial Audit Report, pursuant to Section 204(1) of the Act for the financial year ended March 31, 2024 is annexed to this Report as "Annexure - IV" and forms part of this Report
The Secretarial Audit Report for Financial Year 2023-24 does not contain any qualification, reservation or adverse remarks.
During the year, the Company has complied with the applicable corporate governance requirements as prescribed under the SEBI Listing Regulations with respect to its material subsidiary. Therefore, the Secretarial Audit of the Material Subsidiary viz. M/s Carya Chemicals & Fertilizers Private Limited ("CARYA"), was carried out by CS. Ashok Ranjan Mishra, Practicing Company Secretary in terms of Regulation 24A of the Listing Regulations and a copy of the report is annexed to this Board Report as Annexure- V. The Secretarial audit report of CARYA does not contain any qualification, reservation, adverse remark or disclaimer.
The Company has undertaken an Annual Secretarial Compliance Audit for the financial year 2023-24 pursuant to Regulation 24A (2) of the SEBI Listing Regulations. The Annual Secretarial Compliance Report for the financial year ended 31st March 2024 has been submitted to the Stock Exchanges and the said report may be accessed on the Company's website at https://www.suraiindustries.org/documents/Annual%20SC%20Reports/ASCR 31.03.2024.pdf
Your Company is in compliance with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India for the financial year ended March 31, 2024.
INTERNAL AUDITOR
Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with relevant applicable rules your company was required to appoint an Internal Auditor. Further, the Board of Directors at its meeting held on November 08, 2023 has appointed M/s Padam Dinesh & Co., Chartered Accountants as Internal Auditor of the Company.
ANNUAL RETURN
In accordance with the provisions of section 134(3)(a) & 92(3) of Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the Financial Year 2022-23 is available on the Company' s website at www.suraiindustries.org. Further the Annual return for FY 2023-24 shall be made available on the Company' s website upon the same being filed with the concerned Registrar of Companies.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit function is handled by an external firm of Chartered Accountants. The Internal Control Systems are regularly being reviewed by the Company's Internal Auditors with a view to evaluate the efficacy and adequacy of Internal Control Systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and to ensure that these are working properly and wherever required, are modified/ tighten to meet the fast changing business requirements.
The Audit Committee regularly interacts with the Internal Auditors, the Statutory Auditors and Senior Executives of the Company responsible for financial management and other affairs. The Audit Committee evaluates the internal control systems and checks and balances for continuous updation and improvements therein. The Audit Committee also regularly reviews and monitors the budgetary control system of the Company as well as the system for cost control, financial controls, accounting controls, physical verification, etc. The Audit Committee regularly observes that proper internal financial controls are in place including with reference to financial statements. During the year, such controls were reviewed, and no reportable material weakness was observed.
DETAILS OF SUBSIDIARIES/JOINT VENTURE AND ASSOCIATES COMPANY
As on 31st March 2024, the Company has one unlisted Material subsidiary and one Associate company- Material Subsidiary Company
As on March 31, 2024, the Company had 1 (One) unlisted material subsidiary i.e M/s Carya Chemicals & Fertilizers Private Limited ("CARYA"),. Your Company has formulated a policy for determining Material Subsidiaries. The policy is available on your
Company'swebsiteathttps://www.surarindustries.org/policy/Policy%20for%20determining%20Material% 20Subsidiary.pdf.
Associate Company
M/s Shri Gang Industries and Allied Products Limited ("Shri Gang") is an associate Company of the Company under the provisions of Section 2(6) of the Companies Act, 2013. Shri Gang has set up a Bottling Plant for the manufacture of Indian Made Foreign Liquor/ Country Liquor and a grain-based Distillery for manufacture of Extra Neutral Alcohol ("ENA") at Sandila, District Hardoi, Uttar Pradesh.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company for the year ended March 31, 2024, have been prepared in accordance with the Indian Accounting Standards (IND AS) 110 - "Consolidated Financial Statements" as notified by Ministry of Corporate Affairs and as per the general instructions for preparation of Consolidated Financial Statements given in Schedule III and other applicable provisions of the Act, and in compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The financial statements of the subsidiary and the related detailed information will be made available to the shareholders of the Company seeking such information. The Audited Consolidated Financial Statements along with the Auditors' Report thereon forms part of this Annual Report. A gist of financial highlights/performance of these Companies is contained in Form AOC- 1 and forms part of this report and annexed as Annexure-I.
NUMBER OF BOARD MEETING AND ATTENDANCE BY EACH DIRECTOR
During the financial year 2023-2024, Five (05) Board Meetings were held on 30.05.2023, 11.08.2023, 28.08.2023, 08.11.2023 and 02.02.2024. The intervening gap between any two meetings did not exceed the time prescribed under Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended. The details of composition of Board and presence of each director in the meeting is mentioned hereunder.
Name of Director
No. of Board Meetings Held
No. of Board Meetings Attended
Mr. Suraj Prakash Gupta
05
Mr. Ashu Malik
04
Mr. Syed Azizur Rahman*
Mr. Sanjay Jain
Ms. Pooja Solanki
Mr. Nazir Baig
Non-Executive - Independent Director
* Mr. Syed Azizur Rahman tendered his resignation from the position of Chairperson and Non-Executive & Non-Independent Director in the Company vide his resignation letter dated July 01, 2024 with effect from the close of business hours of July 04, 2024.
AUDIT COMMITTEE
The primary objective of the Audit Committee is to monitor and provide effective supervision of the Management's financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.
The Committee comprises of Mr. Nazir Baig , Mr Syed Azizur Rahman and Mrs. Pooja Solanki . The Committee met 7 (Seven) times during the year under review, the details of which are given in the Corporate Governance Report of this Annual Report.
During the year under review, there were no instances when the recommendations of the Audit Committee were not accepted by the Board.
CORPORATE GOVERNANCE DISCLOSURE
The Company strives to achieve appropriate Corporate Governance practices. In accordance with the requirements of Schedule V read with Regulation 34(3) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 with the Stock Exchange.
Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders' expectations. It is imperative that your company's affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of the stakeholders.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct, which is applicable to the Members of the Board and all Employees in the course of day-to-day business operations of the Company.
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated Employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with Stakeholders.
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated Employees of the Company. The Code requires preclearance 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 closed. The Board is responsible for implementation of the Code.
The Board Members have affirmed compliance with the Code of Conduct for the year ended March 31, 2024. The code of conduct is available on our website www.surajindustries.org.
PREVENTION OF INSIDER TRADING CODE
As per SEBI (Prohibition of Insider Trading) Regulation, 2015 as amended from time to time, the Company has adopted a Code of Conduct to Regulate, Monitoring & Reporting of Trading by Insiders. During the year under review, there has been due compliance with the said code.
PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company has always believed in providing a safe and harassment free workplace for every woman working in Company's premises, through various interventions and practices. The Company has adopted policy and constituted the Internal Complaint Committee under Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 as amended from time to time.
The following are the summary of sexual harassment complaints received and disposed of during the year:
The Company has not received any complaints during the year.
DECLARATION BY INDEPENDENT DIRECTOR(S)
The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and qualify to act as Independent Director of the Company confirming that:
• They meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder,
• In terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered themselves with the Independent Director's database maintained by the Indian Institute of Corporate Affairs, Manesar.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met on March 16, 2024, without the attendance of Non-Independent Directors and members of the management. The Independent Directors reviewed the performance of NonIndependent Directors, the Committees and the Board as a whole along with the performance of the Chairman of your Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
NOMINATION AND REMUNERATION POLICY.
Pursuant to the provisions of Section 178 of the Act, and in terms of Regulation 19 read with Part D of Schedule-II of the SEBI Listing Regulations, the Company has a Nomination and Remuneration Policy for its Directors, Key Managerial Personnel and Senior Management which also provides for the diversity of the Board and provides the mechanism for performance evaluation of the Directors and the said Policy was amended from time to time. It includes criteria for determining qualifications, positive attributes and Independence of a Director. It is available on the Company's website and can be accessed through the following link https://www.surajindustries.org/policv/Nomination-&-Remuneration-Policv.pdf .
PARTICULARS OF LOAN(S), GUARANTEEDS) OR INVESTMENT(S) UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Particulars of loans, guarantees and investments made by the Company required under section 186(4) of the Act are contained in Notes of the Standalone Financial Statements and are not reproduced for the sake of brevity.
However, On May 31,2024, the Board of Directors has approved to give Corporate Guarantee in favour of UCO Bank, Hazratganj branch, Lucknow to secure the credit facilities to the extent of Rs. 186.89 Crore by UCO Bank to M/s Carya Chemicals & Fertilizers Private Limited ("CARYA"), a material Subsidiary Company of the Company, for setting up distillery unit and bottling plant for manufacturing of IMFL and Country Liquor at Plot No. SP1-2 , RIICO Industrial Area, Guwadi & Majhari, Block Shahbad, Dist. Baran, Rajasthan Baran, Rajasthan.
PARTICULARS OF CONTRACT OR ARRANGEMENTS MADE WITH RELATED PARTIES.
In line with the requirements of the Companies Act, 2013 and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions. The Policy can be accessed on the Company'swebsiteathttps://www.surarindustries.org/policy/Related%20Party%20Transaction%20Policy SIL.pdf . The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of RPT, keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All RPT are placed before the Audit Committee for review and approval.
All Related Party Transactions (RPT) that were entered into by the Company during the financial year under review were at arm's length basis and in the ordinary course of business. During the year under review, the Company has entered into material related party transactions with M/s Carya Chemicals and Fertilizers Private Limited (CARYA) and details of the same are stated in Form AOC-2 in Annexure- II of this report. The material related party transactions are entered by the Company are within the limits approved by the Shareholders at their Extra-Ordinary General Meeting ("EGM") and 31st Annual General Meeting ("AGM") of the Company held on March 11,2023 and September 26,2023 respectively.
All the related party transactions were entered on arms' length basis and were in the ordinary course of business. Further, the transactions with related parties were in compliance with applicable provisions of the Act and the Listing Regulations. Omnibus approval was obtained for the transactions which were foreseen and repetitive in nature. A statement of all related party transactions was presented before the Audit Committee on a quarterly basis.
Details of related party transactions entered into by the Company, in terms of IND AS-24 have been
disclosed in the notes to the standalone/consolidated financial statements forming part of the Annual Accounts for the Financial Year 2023-24.
DEPOSITS
The Company has not accepted any deposits including deemed deposits during the Financial Year 202324 covered under Chapter V of the Companies Act, 2013, i.e. within the meaning of Section 2(31) of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as such there are no such overdue deposits outstanding as on March 31,2024.
BORROWINGS FROM DIRECTORS & THEIR RELATIVES
Pursuant to Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014, it is stated that during the financial year under review, the Company had repaid a loan taken from director in compliance of the Provisions of the Act. The details are provided in the notes to financial statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO:
The Company is not engaged in any activity where conservation of energy and technology absorption is required. Further, during the year there were no foreign exchange earnings or outgo. Hence the details required under Section 134(3) (m) of the Companies Act 2013 read with rule 8(3) Companies (Accounts) Rule, 2014 are not given.
RISK MANAGEMENT
The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically. Board has prepared Risk Management plan, which is reviewed and monitored on regular basis, to identify and review critical risks.
PERFORMANCE EVALUATION
The Companies Act, 2013 read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as applicable provides that the Board needs to undertake a formal Annual Evaluation of its own performance and that of its Committees and individual Directors. Schedule IV of the Companies Act, 2013 read with the Rules issued there understates that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.
The Board has carried out the annual evaluation of its own performance, performance of the Directors individually as well as the performance of the working of its Audit, Nomination & Remuneration and other Committees of the Board. The evaluation was carried out taking into consideration various aspects of the Board's functioning, such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance, etc.
The Directors expressed their satisfaction with the evaluation process.
THE CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business during the financial year 2023-2024.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant material orders passed by any Regulators/Courts that would impact the going concern status of the Company and its future operations.
Your Company has complied with all the Acts, Rules, Regulations and Guidelines issued/prescribed by the Securities Exchange Board of India, Ministry of Corporate Affairs and other statutory authorities.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Board of Directors of the Company had adopted the Vigil Mechanism /Whistle Blower Policy in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. The Audit Committee reviews periodically the functioning of whistle blower mechanism. No complaints/suggestions were received during the Financial Year ended March 31, 2024. No personnel have been denied access to the Audit Committee during the Financial Year 2023-24.
The details of said vigil mechanism are given in Corporate Governance Report, which forms part of this Annual Report. A copy of the Whistle Blower Policy is available in the company's website i.e. https://www.suraiindustries.org/policv/Vigil-Mechanism-Policv.pdf .
HUMAN RESOURCES
The focus on human capital continued to be a cornerstone of the Company's strategic endeavours. Recognizing the pivotal role of our workforce as the driving force behind our diverse business ventures, the Company endeavored to cultivate an environment conducive to their growth, development, and overall well-being.
We consider the employees as our most valuable asset and help them realize their full potential.
PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES
1. Disclosure in terms of Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: -
i. The ratio of the remuneration of each director to the median remuneration of the employee of the Company for the financial year 2023-24:
ii. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year:
-
iii. The percentage increase in remuneration in the median remuneration of employee in the financial year: (-) 15.95%
There was percentile decrease in the median remuneration due to increase in number of employees with lower salary base commensurating with their qualification and experience
iv. The Company had 35 permanent employees as on March 31,2024.
v. Average Percentile Increase already 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: -
Percentage increase in the managerial remuneration for the year: 0.36%
Percentage increase in Salaries of Employees other than the Managerial Personnel: (-) 3.94%
There was percentile decrease in the Salaries of Employees other than the Managerial Personnel due to increase in number of employees with lower salary base commensurating with their qualification and experience
The percentile increase in the managerial remuneration was due to the increase in the salary of Managing Director
vi. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
2. Disclosure in terms of Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: -
There was no employee who has drawn salary as mentioned in the previously mentioned rule. MANAGEMENT DISCUSSION & ANALYSIS REPORT
In terms of the provisions of Regulations 34 and Part B of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations 2015, the Management's discussion and analysis report has been given separately and forms integral part of this Annual Report.
INDUSTRIAL RELATIONS
The Industrial Relations have continued to be stable and harmonious during the course of the year. DISCLOSURES UNDER SECRETARIAL STANDARDS
The directors state that applicable Secretarial Standards, i.e SS-1 and SS-2, relating to ‘Meeting of the board of Directors' and ‘General Meetings', respectively, have been duly followed by the company.
DISCLOSURE ABOUT MAINTENANCE OF COST RECORDS
The Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Company's products/business activity,
ISSUANCE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS AS TO DIVIDEND, VOTING OR OTHERWISE.
As on March 31,2024, the Company has no equity shares with differential rights as to dividend voting right or otherwise.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
During the financial year under review, neither any application is made by the Company nor is any proceeding pending under the Insolvency and Bankruptcy Code, 2016.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the financial year under review, disclosure w.r.t. details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
DEVIATION(S) OR VARIATION(S) IN THE USE OF PROCEEDS OF PREFERENTIAL ISSUE, IF ANY
There were no instances of deviation(s) or variation(s) in the utilization of proceeds from the allotment of 551724 fully paid-up equity shares against conversion of equal number of warrants during financial year 2023-24.
The details of the status of receipt of funds and their utilization periods are given in Corporate Governance Report, which forms part of this Annual Report.
GREEN INITIATIVE
As a responsible corporate citizen, the Company supports the ‘Green Initiative' undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report etc. to Members at their e-mail address registered with the Depository Participants ("DPs") and RTAs. To support the ‘Green Initiative', Members who have not registered their email addresses are requested to register the same with the Company's Registrar and Share Transfer Agent ("RTAs")/ Depositories for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically. Pursuant to the MCA Circulars and SEBI Circulars, the Annual Report of the Company for the financial year ended 31 March 2024 including therein the Audited Financial Statements for the financial year 2023-24, are being sent only by email to the Members.
ACKNOWLEDGEMENTS
We, the Board of Directors, feel compelled to express our sincere acknowledgement and heartfelt appreciation to the customers, investors, bankers, employees and business associates, all the stakeholders, shareholders, various departments of the State and the Central Government and Investors who have put their faith in the Company.
We would also like to express our gratitude to our investors for their unwavering confidence in our vision. Your financial backing and strategic guidance have propelled our growth and enabled us to pursue innovation and expansion. Your belief in our potential has been instrumental in transforming our ideas into reality, and we remain committed to delivering sustainable returns on your investment.