The Directors present the Annual Report together with the Audited Statement of Accountsfor the Financial Year 2015-16 ended 31st March 2016
1. FINANCIAL RESULTS:
| || ||(Rs. in lakhs) |
|Particulars ||2015-16 ||2014-15 |
|Total Revenue (including other Operating Revenue) ||16956.33 ||17398.62 |
|Total Expenditure (Excluding Finance Cost Depreciation & Tax) ||-16645.39 ||-17081.49 |
|Profit/(loss) before Finance Cost Depreciation & Tax. ||310.94 ||317.13 |
|Finance Cost ||-252.96 ||-249.89 |
|Profit/(loss) before Depreciation & Tax ||57.98 ||67.24 |
|Provision for depreciation ||-34.67 ||-36.04 |
|Profit/(loss) before Tax ||23.31 ||31.20 |
|Provision for Tax ||1.60 ||-10.29 |
|Net profit/(loss) after tax for the year ||24.91 ||20.91 |
|Add: Balance brought forward from Previous year ||0.36 ||107.83 |
|Less: Adjustment for Transitional Depreciation for the year ||0.00 ||-128.38 |
|Less:Investment revaluation Reserve ||-4.98 ||0.00 |
|Balance carried to next year ||20.29 ||0.36 |
2. FINANCIAL / OPERATIONAL PERFORMANCE:
Revenue from operations (gross): The Global slowdown in commodity prices andoverall pressure on demand and consumption resulted in drop in finished goods has lead tomarginal decrease in sales in terms of value and a subdued market for textiles adverselyimpacted on the total Revenue of the company. The total Revenue from operations (gross)was decreased from Rs. 17398.62 lakhs in 2014-15 to Rs. 16956.33 lakhs in 2015-16.
Net Profit: Despite of subdued performance in turnover net profit of the companywas increased by 19.12% from Rs. 20.91 lakh as on March 31 2015 to Rs. 24.91 lakh as onMarch 31 2016 showcasing a better utilization of every rupee invested in business. Duringthe year under reference there was a fires at the manufacturing premise. Due to that thecompanys Raw Material/Finished goods were damaged for which the insurance claim ofRs. 82 lakhs has been placed with insurance company. In absence of the final output of theinsurance claim the impact on loss if any on fire has not been accounted for.
Shareholders funds increased by 1.02% from Rs. 103.24 lakh as on March 312015 to Rs. 105.73 lakh as on March 31 2016. This increase was largely due to a growth inthe profit and loss account balance as a majority of the profits earned during the yearwere ploughed into the Company to fund growth.
With a view to conserve the financial resources for the future requirement of thecompany the Board of Directors has not recommended any dividend for the year underreview.
4. SHARE CAPITAL:
During the year under review the Company has not issued any shares. The total paid upcapital of the company at the end of financial year 2015-16 stood Rs.61744000/- (Rupeessix crores seventeen lakhs forty four thousand) consisting of 6174400 equity shares ofRs.10/- each.
5. ANNUAL RETURN
The extract of Annual Return pursuant to the provision of section 92 read with Rule 12of the Companies (Management and Administration) Rules 2014 for the financial year2015-16 in Form MGT - 9 is annexed hereto and form part of this report as Annexure II.
6. AUDITORS AND AUDITORS REPORT:
M/s. Jayesh M. Shah & Co. Chartered Accountants statutory auditors of the Companyhas carried out the statutory Audit and submitted its report for the financial year endedon March 31 2016.
The Board has recommended the ratification of appointment of M/s. Jayesh M. Shah &Co. Chartered Accountants as Auditors of the Company from the conclusion of this AnnualGeneral Meeting until the conclusion of the next Annual General Meeting.
The Auditors Report to the shareholders for the year under review does notcontain any qualification reservation or adverse remark or disclaimer.
M/s Patel & Associates Company Secretary in Practice were reappointed asSecretarial Auditors of the company by the Board to carry out Secretarial Audit for theFinancial Year 2015-16.
The Secretarial Auditors of the Company have submitted their Report in form No. MR - 3as required under section 204 of the Companies Act 2013for the financial year ended 31stMarch 2016. This Report is self-explanatory and requires no comments. The SecretarialAudit Report forms part of this report as Annexure - IV.
7. SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANIES:
The Company doesnt have any Subsidiaries Associates or Joint Venture Companies.
8. REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THESUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
The Company doesnt have any Subsidiaries Associates or Joint Venture Companies.
9. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES:
There are no companies which have become or ceased to be Companys SubsidiariesJoint ventures or Associate companies.
10. CORPORATE GOVERNANCE REPORT:
The Company is exempt under Regulation 27(2) SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 read with Regulation 15 of Chapter IV SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Hence Annual Report 2015-16does not contain the corporate governance report. Further as and when the company fallsunder the applicability to provide Corporate Governance Report the company will complywith the same. Refer Annex - III.
11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a proper and adequate system of internal control in all spheres of itsactivities to ensure that all its assets are safeguarded and protected against loss fromunauthorized use or disposition and that the transactions are authorized recorded andreported diligently. The Company ensures adherence to all internal control policies andprocedures as well as compliances with all regulatory guidelines. The Audit Committee ofthe Board of Directors reviews the adequacy of internal controls from time to time.
A report on the Internal Financial Control under clause (i) of sub-section 3 of section143 of the Companies Act 2013 is annexed to Independent Audit Report on FinancialStatement as Annex B.
12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
13. BOARD OF DIRECTORS:
|Name of Director ||Category |
|Shri Kalyan J Shah ||Chairman & Managing Director |
|Shri Nirav K Shah ||Jt. Managing Director |
|Shri Fenil R Shah ||Director |
|Shri Pareshbhai R Shah ||Director |
|Shri Janak G Nanavaty ||Director |
|Shri Falguni G Broker ||Director |
14. NUMBER OF MEETINGS AND ATTENDANCE:
The Company sends notice of meetings of the Board well in advance so as to allow theDirectors to block their calendars. There were four meetings of the board viz. 25.05.201527.07.2015 02.11.2015 13.02.2016 held during the year details which is requiredpursuant to section 134(3)(b) of the Companies Act 2013 are given as under:
|Name of director ||No. of Board meetings attended ||Whether attended AGM |
|Shri Kalyan J Shah ||2 ||Y |
|Shri Nirav K Shah ||4 ||Y |
|Shri Fenil R Shah ||4 ||Y |
|Shri Pareshbhai R Shah ||4 ||Y |
|Shri Janak G Nanavaty ||3 ||Y |
|Smt Falguni G Broker ||4 ||N |
15. COMPOSITION OF COMMITTEES AND ATTENDANCE:
A. AUDIT COMMITTEE:
Pursuant to provision of section 177 of the Companies act 2013 the Audit committeeconsists of four Members Shri Janak G Nanavaty (designated as chairman of the committee)Shri Nirav K Shah Shri Fenil R Shah and Shri Paresh R Shah. During the year under review4 meetings were held on 25.05.2015 27.07.2015 02.11.2015 and 13.02.2016. The attendancerecord of the members at the meeting was as follows:
|Name of Member ||Designation ||Attendance |
|Shri Janak G Nanavaty ||Chairman ||3 |
|Shri Nirav K Shah ||Member ||3 |
|Shri Fenil R Shah ||Member ||4 |
|Shri Paresh R Shah ||Member ||3 |
B. NOMINATION AND REMUNERATION COMMITTEE:
Pursuant to provision of section 178 (1) of the Companies act 2013 the Nomination andRemuneration Committee consists of three Members Shri Janak G Nanavaty (designated aschairman of the committee) Shri Fenil R Shah and Shri Paresh R Shah. Not a single Meetingwas held during the year under review.
C. STAKEHOLDER RELATIONSHIP COMMITTEE:
Pursuant to provision of section 178 (5) of the Companies act 2013 the StakeholderRelationship Committee consists of three Members Shri Janak G Nanavaty (designated aschairman of the committee) Shri Nirav K Shah and Shri Fenil R Shah. During the year underreview 4 meetings were held on 25.05.2015 27.07.2015 02.11.2015 and 13.02.2016. Theattendance record of the members at the meeting was as follows:
|Name of Member ||Designation ||Attendance |
|Shri Janak G Nanavaty ||Chairman ||3 |
|Shri Nirav K Shah ||Member ||3 |
|Shri Fenil R Shah ||Member ||4 |
16. DIRECTORS RESPONSIBILITY STATEMENT;
In terms of section 134 (3) (c) read with section 134 (5) of the Companies Act 2013in relation to financial statements for the year 2015-16 the Board of Directors statethat:
(a) In the preparation of Annual Accounts for the period ended March 31 2016 theapplicable accounting standards had been followed along with proper explanation relatingto material departures.
(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe Profit/Loss of the Company for the year ended March 31 2016.
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) The Directors had prepared the annual accounts for the financial year ended March31 2016 on a going concern basis.
(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
17. DECLARATION AS TO INDEPENDENT DIRECTORS PURSUANT TO PROVISIONS OF SECTION 134(3)(D)READ WITH SECTION 149(6) OF THE COMPANIES ACT 2013;
All the Independent Directors of the Company are neither Managing Director nor a WholeTime Director nor a Manager or a Nominee Director.
(a) All the Independent Directors in the opinion of the Board are persons of integrityand possesses relevant expertise and experience.
(b) (i). Independent Directors are or were not a Promoter of the Company or its Holdingor subsidiary or associate company.
(ii) Independent Directors are or were not related to promoters or directors in thecompany its holding subsidiary or associate company.
(c) Independent Directors have or had no pecuniary relationship with the company itsholding subsidiary or associate company or their promoters or directors during the twoimmediately preceding financial years or during the current financial year.
(d) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhsrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year
(e) That Independent Directors neither himself nor any of his relatives
i. Holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of threefinancial years immediately preceding the financial year in which he is proposed to beappointed.
ii. Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial years in which he is proposed to beappointed of
(A) A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
(B) Any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or Associate company amounting to ten per cent or more of thegross turnover of such firm;
iii. Holds together with his relatives less than two per cent or more of the totalvoting power of the company; or
iv. Is a Chief Executive or director by whatever name called or any non-profitorganization that receives twenty five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; or
(f) Independent Directors possesses such other qualifications as may be prescribed.
18. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THEEMPLOYEES OF THE COMPANY FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016;
The particulars of ratio of remuneration of each director to median remuneration of theemployees of the Company for the financial year under report percentage increase inremuneration to each Director and KMP etc. more particularly described under Section197(12) of the Companies Act 2013 and Rule 5 of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are given as under;
|Name of Director and KMP ||Designation ||Performance of the Company |
|Shri Kalyan J Shah ||Managing Director || |
|Shri Nirav K Shah ||Jt. Managing Director ||Net profit of the company was increased by 19.12% from Rs. 20.91 lakh as on March 31 2015 to Rs. 24.91 lakh as on March 31 2016 |
|Shri Fenil R Shah ||Director || |
|Shri Pareshbhai R Shah ||Director || |
|Shri Janak G Nanavaty ||Director || |
|Smt. Falguni G Broker ||Director || |
III. The ratio of the remuneration of each director to the median remuneration ofthe employees of the company:
Total Remuneration: Rs.846499.00
Managerial remuneration: NIL
Remuneration to other Employee: Rs. 817999.00
Sitting Fees paid to other director: Rs. 28500.00
IV. The percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer
Company Secretary or Manager if any in the financial year; NIL
V. The Percentage (%) increase in the median remuneration of employees: NIL
VI. Number of permanent Employees on the rolls of Company: 3
VII. Relationship between average increase in remuneration and company performance:Not Applicable as there was not any increase.
VIII. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:
The remuneration to the KMP i.e. Managing Director(s) kept constant and there is noincrease during the year.
IX. The Market Capitalisation of the Company as at 31st March 2016 is 295.13 lakhsagainst Rs. 159.30 lakhs as at 31st March 2015. There was a variation of Rs. 135.83 lakhs.
Price Earnings Ratio:
|As on ||Market Value per Shares (P) ||Earnings Per Share (E) ||P/E Ration |
|31st of March 2015 ||Rs. 2.58 ||0.34 ||7.59 |
|31st of March 2016 ||Rs. 4.78 ||0.40 ||11.95 |
X. Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration; NOTAPPLICABLE as there was no increase.
XI. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company: As the company has not paid any remuneration to ManagingDirectors the comparison not possible.
XII. The key parameters for any variable component of remuneration availed by thedirectors: Directors are paid sitting fees only. Components for the Sitting fees arevariable. Sitting fee depends upon ones attendance of the meeting. The Key parameterstherefore are as envisaged under the Companies Act.
XIII. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year; and No employee is receiving remuneration in excess or higherthan the remuneration of Director or Key Managerial Personnel.
XIV. Affirmation that the remuneration is as per the remuneration policy of thecompany. All remuneration of the Employees and directors are decided by Nomination &Remuneration Committee and by the Board of Directors within the organization
19. FORMAL ANNUAL EVALUATION PROCESS BY BOARD PURSUANT TO SECTION 134(3)(P);
During the year the Board adopted a formal mechanism for evaluating its performance aswell as that of its Committees and individual Directors including the Chairman of theBoard. The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
20. RISK MANAGEMENT:
The Company was already having risk management system to identify evaluate andminimize the Business risks. The Company during the year had formalized the same byformulating and adopting Risk Management Policy. This policy intends to identifyevaluate monitor and minimize the identifiable risks in the Organisation.
None of the Directors are receiving Commission from the company.
22. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large. However details of transactions with related partiesare given in 30 (K) of Accounting Policies by Auditors as per Accounting Standard 18.
23. CORPORATE SOCIAL RESPONSIBILITY:
As Company does not come under the ambit of 135 of the Companies Act 2013 and Rules ofCompanies (Corporate Social Responsibility policy) 2014 Company has not formed CorporateSocial Responsibility Committee and hence Rule 9 of Companies (Accounts) Rule 2014regarding disclosure of contents of Corporate Social Responsibility Policy is notapplicable to the Company.
24. PARTICULARS OF EMPLOYEES:
Pursuant to the provisions of Rule 5 of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with the Companies Act 2013 it is hereby informedthat none of the employees of the Company was in receipt of remuneration of Rs.5 lakhs permonth or Rs. 60 lakhs per annum during the year under review.
During the year under review the Company had not accepted any deposit from publicduring the year.
26. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of investments made and loans advanced by the company have been given in noteno. 13 14 & 16 to the Financial Statement. The Company has not given any Guaranteepursuant to the provision of 186 of the Companies Act 2013.
27. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
Pursuant to section 177(9) of Companies Act 2013 the Board has approved whistleblower policy/vigil mechanism to enable directors and employees to report to theManagement their concerns about unethical behavior actual or suspected fraud or violationof Companys code of conduct or ethics policy. This mechanism provides safeguardsagainst victimisation of directors/employees who avail of the mechanism and provides fordirect access to the Chairman of the Audit Committee in exceptional cases. Thepolicy/vigil mechanism has been appropriately communicated to the employees within theorganisation and has been put on the Companys website www.santaramspinners.com.
28. SAFETY HEALTH AND ENVIROMENT:
(a) Safety: The Company encourages a high level of awareness of safety issues among itsemployees and strives for continuous improvement. All incidents are analysed in the safetycommittee meetings and corrective actions are taken immediately. Employees are trained insafe practices to be followed at work place.
(b) Health: Your Company attaches utmost importance to the health of its employees.Periodic checkup of employees is done to monitor their health. Health related issues ifany are discussed with visiting Medical Officer.
(c) Environment: Company always strives hard to give importance to environmental issuesin normal course of operations. Adherence to Environmental and pollution control Norms asper Gujarat Pollution Control guidelines is of high concern to the Company.
29. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed.
All Board Directors and the designated employees have confirmed compliance with theCode.
30. INDEPENDENT DIRECTORS MEETING:
In compliance with Section 149(8) of the Act read along with Schedule IV of the Act andAs per SEBI (Listing obligations and Disclosure Requirements) Regulations 2015 theIndependent Directors met on March 31 2016 inter alia to discuss:
a) The performance of Non-Independent Directors and the Board of Directors;
b) The performance of the Chairperson of the Company
c) Assess the quality quantity and timeliness of flow of information between themanagement of the Company and the Board of Directors that is necessary for the Board ofDirectors to effectively and reasonably perform their duties.
All the Independent Directors were present at the meeting.
The Equity shares of the company are listed on BSE Limited and Company has paid AnnualListing Fees up to the Year 2016-17.
32. DISCLOSURE OF SEXUAL HARASSMENT:
Pursuant to section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 entire staff in the Company is working in a mostcongenial manner and there are no occurrences of any incidents of sexual harassment duringthe year.
33. ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
As require by the section 134 (3) (m) Companies Act 2013 read with rule 3 of theCompany (Account) Rule 2014 the relevant data pertaining to Conservation of EnergyTechnology Absorption and Foreign Exchange Earning and Outgo pursuant are given inAnnexure-I to this Report.
Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous cooperation and assistance.
|Date: 13th August 2016 ||For Santaram Spinners Limited |
|Place: Ahmedabad ||Kalyan J Shah |
| ||Chairman & Managing Director |
| ||DIN: 00397398 |