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Santaram Spinners Ltd.

BSE: 531323 Sector: Industrials
NSE: N.A. ISIN Code: INE250D01017
BSE LIVE 15:15 | 15 Dec 4.15 0.19
(4.80%)
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4.15

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 4.15
PREVIOUS CLOSE 3.96
VOLUME 200
52-Week high 5.17
52-Week low 3.40
P/E 21.84
Mkt Cap.(Rs cr) 3
Buy Price 4.15
Buy Qty 1305.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.15
CLOSE 3.96
VOLUME 200
52-Week high 5.17
52-Week low 3.40
P/E 21.84
Mkt Cap.(Rs cr) 3
Buy Price 4.15
Buy Qty 1305.00
Sell Price 0.00
Sell Qty 0.00

Santaram Spinners Ltd. (SANTARAMSPIN) - Director Report

Company director report

Dear Shareholders

We have pleasure in presenting the 33rd Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2017. The financialresults for the year are shown below.

1. FINANCIAL RESULTS:

(Rs. in lakhs)
Particulars 2016-17 2015-16
Total Revenue (including other income) 10515.79 16956.33
Total Expenditure (including Finance Cost & Depreciation) (10481.52) (16933.02)
Profit/(loss) before exceptional & extraordinary item & Tax. 34.27 23.31
Exceptional Item 0 0
Profit/(loss) before extraordinary item & Tax 34.27 23.31
Extraordinary Item 0 0
Profit/(loss) before Tax 34.27 23.31
Tax expense (16.77) 1.60
Net profit/(loss) after tax for the year 17.50 24.91
Add: Balance brought forward from Previous year 20.29 0.36
Less : Adjustment for Transitional Depreciation for the year 0.00 0.00
Less : Investment revaluation Reserve 0.00 -4.98
Balance carried to next year 37.79 20.29

2. FINANCIAL / OPERATIONAL PERFORMANCE:

Revenue from operations (gross): The Company has achieved total Revenue of Rs. 10515.79lakhs during the financial year 2016-17. Previous year the net operating profit before taxof the company was Rs. 23.31 lakhs. Against that during the year under reference thecompany has achieved net profit before tax of Rs. 34.27 lakhs. During the year the companyhas earned net profit (profit after tax) of Rs. 17.50 lakh in March 31 2017.

3. DIVIDEND:

Since the Company needs to plough back the profits for the future development andexpansion hence the Board of Directors has not recommended any dividend for the financialyear 2016-17.

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 2016-17 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 year2016-17 in Form MGT - 9 is annexed hereto and form part of this report as Annexure - II.

6. AUDITORS AND AUDITORS' REPORT:

Statutory Auditor:

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 2017. There is no qualification disclaimer reservation or adverse remarkmade by the Statutory Auditors in Auditors' Report.

The Company has proposed the appointment of M/s. Keyur Bavishi & Co. CharteredAccountants (ICAI Firm Reg. No. 131191W) as the Independent Statutory Auditors of theCompany. The Auditors if appointed shall hold office for the period of 5 years from theconclusion of this Annual General Meeting. The Company has received a letter from the M/s.Keyur Bavishi & Co. Chartered Accountants to the effect that the approval of theirappointment if made at the forthcoming Annual General Meeting would be in accordancewith the limits prescribed under 141 (3) (g) of the Act.

Secretarial Auditor:

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 2016-17.

The Secretarial Auditors of the Company have submitted their Report in form No. MR - 3as required under section 204 of the Companies Act 2013 for the financial year ended 31stMarch 2017. This Report is selfexplanatory and requires no comments. The Secretarial AuditReport forms part of this report as Annexure - IV.

7. SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company doesn't have any Subsidiaries Associates or Joint Venture Companies.

8. REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIESASSOCIATES AND JOINT VENTURE COMPANIES:

The Company doesn't have any Subsidiaries Associates or Joint Venture Companies.

9. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES ORASSOCIATE COMPANIES:

There are no companies which have become or ceased to be Company's Subsidiaries Jointventures 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 2016-17does 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 COMPANY'S 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 CEO & 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. 30.05.201613.08.2016 14.11.2016 14.02.2017 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 held on 29.09.2016
Shri Kalyan J Shah 4 Y
Shri Nirav K Shah 2 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 30.05.2016 13.08.2016 14.11.2016 & 14.02.2017. 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 2
Shri Fenil R Shah Member 4
Shri Paresh R Shah Member 4

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 30.05.2016 13.08.2016 14.11.2016 & 14.02.2017. 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 2
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 2016-17 the Board of Directors statethat:

(a) In the preparation of Annual Accounts for the period ended March 31 2017 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 2017.

(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 2017 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 2017;

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 Net operating profit of the company was increased from Rs. 23.31 lakh as on March 31 2016 to Rs. 34.27 lakh as on March 31 2017. Though the profit after tax was decreased from Rs. 24.91 lakh to Rs. 17.50 due to the tax expenses.
Shri Nirav K Shah CEO and Director *
Shri Fenil R Shah Director
Shri Pareshbhai R Shah Director
Shri Janak G Nanavaty Director
Smt. Falguni G Broker Director

*Designation has been changed from Jt. MD to CEO w.e.f. 28.08.2017

I. The ratio of the remuneration of each director to the median remuneration of theemployees of the company:

Total Remuneration: Rs.1635658.00

Allowances and Reimbursement to KMP: 530909.00

Remuneration to other Employee: Rs.1065999.00

Sitting Fees paid to other director: Rs. 38750.00

II. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year; NIL

III. The Percentage (%) increase in the median remuneration of employees: 5%

IV. Number of permanent Employees on the rolls of Company: 3

V. Relationship between average increase in remuneration and company performance: Theincrease in the remuneration is determined based on the performance by the employee of thecompany.

VI. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company: The remuneration to the KMP i.e. Managing Director(s) keptconstant and there is no increase during the year.

VII. The Market Capitalisation of the Company as at 31st March 2017 is275.37 lakhs against Rs. 295.13 lakhs as at 31st March 2016. There was avariation of Rs. 19.76 lakhs.

Price Earnings Ratio:

As on Market Value per Earnings Per Share P/E Ratio
Shares (P) (E)
31st of March 2016 Rs. 4.78 0.40 11.95
31st of March 2017 Rs. 4.46 0.28 15.93

VIII. 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 in the managerial remuneration.

IX. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company: The Remuneration of KMP is given in point (I).

X. 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.

XI. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year; and No employee is receiving remuneration in excess or higher than theremuneration of Director or Key Managerial Personnel.

XII. 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);

The Company has in place a formal mechanism for evaluating its performance as well asthat of its Committees and individual Directors including the Chairman of the Board. TheBoard after taking into consideration the criteria of evaluation laid down by theNomination and Remuneration Committee in its policy such as Board Composition level ofinvolvement performance of duties attendance etc. had evaluated its own performance theperformance of its committees and Independent Directors (excluding the Director beingevaluated) and that of the Chairman and the Non-Independent Directors was carried out bythe Independent Directors in their separate meeting held.

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.

21. COMMISSION:

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 onarm's 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.

25. DEPOSITS:

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 of the Companies Act 2013 the rules made thereunder and theRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Company has established a Vigil Mechanism for directors and employees to reportgenuine concerns about any instance of any irregularity unethical practice and/ormisconduct. This mechanism provides safeguards against victimisation ofdirectors/employees who avail of the mechanism and provides for direct access to theChairman of the Audit Committee in exceptional cases. The policy/vigil mechanism has beenappropriately communicated to the employees within the organisation and has been put onthe Company's 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 25 2017 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.

31. LISTING:

The Equity shares of the company are listed on BSE Limited and Company has paid AnnualListing Fees up to the Year 2017-18.

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.

34. CAUTIONARY STATEMENT:

Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.

35. ACKNOWLEDGMENTS

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: 28th August 2017 For Santaram Spinners Limited
Place: Ahmedabad Kalyan J Shah
Chairman & Managing Director
DIN: 00397398