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Shreenath Investment Company Ltd.

BSE: 503696 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE475V01012
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Shreenath Investment Company Ltd. (SHREENATHINVEST) - Director Report

Company director report

To

The Members

Shreenath Investment Company Limited

Your Directors are pleased to present herewith the 37th Annual Report on thebusiness and operation of the Company together with Audited Financial Statement of yourCompany for the Financial Year ended 31st March 2017.

The State of the Company's Affairs

1. KEY FINANCIAL HIGHLIGHTS:

Particulars For the Year ended 31st March 2017 For the Year ended 31st March 2016
(Rs.) (Rs.)
Income 179125540 4622156
Expenditure 20133104 1594620
Profit/ (Loss) before Depreciation and Tax 158992436 3027536
Depreciation 136630 249417
Profit /(Loss) before Tax 158855806 2778119
Deferred Tax/Current Tax 30393599 9285
Profit/ (Loss) after Tax 128462207 2768834

During the year under review your Company has reported a Net income of Rs.128462207/- which has increased by Rs. 125693373/- as compare to previous financialyear which is mainly due to profit on sale of Long Term Investment

2. DIVIDEND:

With a view to plough back the profits of the Company for future growth your Directorsdo not recommend dividend for the year ended 31st March 2017.

3. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO(SECTION 134 (3) (m) OF THE COMPANIES ACT 2013:

Since there is no manufacturing carried on by the Company particulars required to begiven in the terms of Section 134(3) (c) of the Companies Act 2013 read with Rule 8 ofthe Companies (Accounts) Rules 2014 regarding Conservation of energy and TechnologyAbsorption is not applicable. There is no earning and outgo in foreign currency.

4. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

There has been no material changes and commitments affecting the financial position ofthe company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report.

5. REVISION OF FINANCIAL STATEMENT OF THE COMPANY/THE REPORT OF THE BOARD:

The Financial Statement of the Company/Board Report has not been revised during theFinancial Year 2016-2017 as per Section 131 of the Companies Act 2013.

6. ANNUAL – RETURN EXTRACTS:

Extracts of the Annual Return as provided in Section 92(3) of the Companies Act 2013in MGT-9 is attached as Annexure-I.

7. DETAILS OF NEW SUBSIDIARY/ JOINT VENTURES/ASSOCIATECOMPANIES:

Name of the Company Subsidiary ventures/ Company / Joint Associate Date of becoming of Subsidiary / Joint ventures/ AssociateCompany.
N.A. N.A. N.A. N.A.

8. DETAILS OF THE COMPANY WHO CEASED TO BE ITS SUBSIDIARY/ JOINT VENTURES/ASSOCIATECOMPANIES:

Sr. No Name of Company Subsidiary/ ventures/ Company Joint Associate Date of Subsidiary ventures/ cession of / Joint Associate
N.A. N.A. Company. N.A.

9. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

Sr. No Name of Authority who has issued an order. Date of Order. Particulars of Order.
N.A. N.A. N.A. N.A.

10. DEPOSITS:

During the year the Company has not accepted any deposits covered under section 73 to76 under the Companies Act 2013.

11. INTERNAL FINANCIAL CONTROL:

The Board of Directors is responsible for ensuring that internal financial controlshave been laid down in the Company and that such controls are adequate and is functioningeffectively. Shreenath Investment Company Limited has policies procedures controlframeworks and management systems in place that map into the definition of InternalFinancial Controls. These have been established at the entity and process levels and aredesigned to ensure compliance to internal control requirements regulatory compliance andappropriate recording of financial and operational information. The company has adequateinternal control system in place on the basis of which financial accounting is done andperiodically financial statements are prepared. Such Internal control systems are adequateand operating effectively.

12. BOARD MEETINGS:

The Board met Seven times during the year. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.The details of which are givenbelow:

Sr. No. Date of Meetings Directors Present Venue
01 27/05/2016 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
02 10/08/2016 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
03 27/08/2016 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
Ms. Shubhada Jahagirdar
04 25/10/2016 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
Ms. Shubhada Jahagirdar
05 14/11/2016 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
Ms. Shubhada Jahagirdar
06 29/12/2016 Mr. VikasMapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
Ms. ShubhadaJahagirdar
07 10/02/2017 Mr. Vikas Mapara 801-802 DALAMAL TOWER
Mr. Ashwin Jain NARIMAN POINT MUMBAI
Mr. Mukul Goyal – 400 021
Ms. Shubhada Jahagirdar

13. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Changes in Directors and Key managerial personnel are as follows:

Name of the Director/Key managerial personnel Particulars Date of Appointment/ Resignation
1. Mr. Mayur Kadakia Appointment of Chief Financial Officer (CFO) 27/08/2016
2. Mr. Vikas Mapara Change in Designation of Mr. Vikas Mapara as a Managing Director 27/08/2016
3. Ms. Latika Rohara Appointment of Company Secretary (CS) 01/09/2016
4 Ms. Latika Rohara Resignation of Company Secretary (CS) 04/11/2016
5 Ms. Priya Dhanuka Appointment of Company Secretary (CS) 29/12/2016

14. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT

DIRECTORS UNDER SECTION 149 (6) OF THE COMPANIES ACT 2013:

The Company has received the necessary declaration from each Independent Directors inaccordance with Section 149(7) of the Companies Act 2013 that he/she meets the criteriaof independence as laid out in sub-section (6) of Section 149 of the Companies Act 2013.In view of the above provisions your Company has following Independent Directors:

Name of the Independent Director Date of appointment / Reappointment Date of passing of special resolution (if any)
1. Mukul Mohandas Goyal 31/10/2012 N.A.
2. ShubhadaKeshavJahagirdar 31/03/2015 N.A.

15. NOMINATION AND REMUNERATION COMMITTEE:

Composition

The ‘Nomination and Remuneration Committee' consists of three Directors with theChairman being the Independent Director. The Committee acts in accordance with the Termsof Reference as approved and adopted by the Board in its Nomination & RemunerationPolicy.

The Composition of the Committee is as under: Chairman: Mr. MukulGoyal Members:Mr.Vikas Mapara

Ms. Shubhada Jahagirdar

Meeting and Attendance

The Nomination and Remuneration Committee met 2 (Two) times during the year ended on 31stMarch 2017. The necessary quorum was present for meeting(s).

Date and Time of Meetings Venue Committee Member Attendance/Present
01. 24/08/2016 801-802 DALAMAL TOWER NARIMAN POINT MUMBAI – 400 021 Mr. Mukul Goyal Mr. Vikas Mapara Mr. Mukul Goyal
02. 29/12/2016 801-802 DALAMAL TOWER NARIMAN POINT MUMBAI – 400 021 Ms. Shubhada Jahagirdar Mr. Vikas Mapara

Nomination and Remuneration Policy

The Company's Nomination and Remuneration Policy for Directors Key ManagerialPersonnel and other employees is annexed as "Annexure II'' to the Directors' Report.Further the Company has devised a Policy for performance evaluation of IndependentDirectors Board Committees and other individual Directors. The Company's Nomination andRemuneration Policy is directed towards rewarding performance based on review ofachievements periodically. The Nomination and Remuneration Policy is in consonance withthe existing industry practice.

16. AUDIT COMMITTEE:

In accordance with the provisions of Section 177 of the Companies Act 2013 yourCompany has constituted an "Audit Committee" comprising of minimum threedirectors consisting of two Non- Executive Independent directors and one ExecutiveDirector with the Chairman being Independent Director. The Audit Committee acts inaccordance with the Terms of Reference specified by the Board in writing.

The Composition of the Committee is as under: Chairman: Mr. MukulGoyal Members: Ms.ShubhadaJahagirdar Mr. Vikas Mapara

Meeting and Attendance

The Audit Committee met 6 (Six) times during the year ended on 31st March2017. The necessary quorum was present for meeting(s).

Date and Time of Meetings Venue Committee Member Attendance/Present
01. 27/05/2016 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400 021
02. 10/08/2016 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400 021
03. 24/08/2016 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400021
04. 24/10/2016 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400021 Ms. Shubhada Jahagirdar
05. 14/11/2016 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400021 Ms. Shubhada Jahagirdar
06. 10/02/2017 801-802 Dalamal Tower Mr. Mukul Goyal
Nariman Point Mumbai – Mr. Vikas Mapara
400021 Ms. Shubhada Jahagirdar

The Terms of Reference of the Audit Committee are broadly stated as under:

(a) Recommendation for appointment remuneration and terms of appointment of auditorsof the company; (b) Overview of the company's financial reporting process and thedisclosure of its financial information to ensure that the financial statement is correctsufficient and credible; (c) Review and monitoring of internal financial controls and riskmanagement systems; (d) Review of the financial statements before submission to the Board;(e) Supervision of other financial and accounting matters as may be referred to by theBoard; (f) Discussion with statutory auditors before the audit commences about the natureand scope of audit as well as have post-audit discussion to ascertain any area of concern;(g) Scrutiny of inter-corporate loans and investments; (h) Monitoring the end use of fundsraised through public offers and related matters; (i) Valuation of undertakings or assetsof the company wherever it is necessary; (j) Approval of Appointment of chief financialofficer after assessing the qualifications experience and background etc of thecandidate;

17. THE VIGIL MECHANISM:

Pursuant to Section 177(9) of the Companies Act 2013 the company has established a‘Whistle Blower Policy & Vigil Mechanism' is annexed as "Annexure III"to the

Director's Report for directors and employees to report their genuine concerns to thecompany. The company oversees this 'Vigil Mechanism' through the Audit Committee of theBoard

18. QUALIFICATION GIVEN BY THE AUDITORS:

There are no qualifications reservation or adverse remarks or disclaimers made by theStatutory Auditors of the Company in their report.

19. SECRETARIAL AUDIT:

Pursuant to provisions of Section 204 of the Companies Act 2013 and rules made thereunder the Company has appointed M/s. Pramod S. Shah & Associates a firm of CompanySecretaries in Practice (C. P. No- 3804) to undertake Secretarial Audit of the Company.The Secretarial Audit Report is included as Annexure- IV and it forms an integral part ofthis Report.

Following Observation made by Secretarial Auditor in Secretarial Audit Report:

Observation of Secretarial Auditor Board Explanation or Comments
1 As per the provision of section 203 of the Companies Act 2013and the rules made thereunder the Company was required to appoint following whole-time Key Managerial Personnel: To meet the expertise and knowledge required as per Company's object and industry line it was an unintentional delay on the part of the Company and there was no malafide intention of the Company and its officers.
1) Managing director or Chief Executive Officer or Manager and in their absence a Whole- time Director;
2) Company Secretary; and
3) Chief Financial Officer. The Company has appointed the whole-time key managerial personnel as mentioned above from 27thAugust 2016.
2 As per Section 178 of the Companies Act 2013 the Composition of Nomination & Remuneration Committee comprises of three or more Non- Executive Directors. However Nomination& Remuneration Committee comprise one Director is Executive Director. Your Company is under process to complying with the same and will be done in due course.
3 Company is falling under the purview of sub-section (1) of Section 188 of the Companies Act 2013 approval of Shareholders was required to be taken at the General Meeting of the Company to approve the related party transaction. However the Company will take the approval of its shareholders in the ensuing Annual General Meeting of the Company.
4 Company was required to take shareholders approval during the year for transaction entered u/s 186 of the Companies Act 2013. We have been informed by the management that the Company will take the approval of its Shareholders in the ensuing Annual General Meeting for the year ended 31st March 2017 and ratify the transaction made by the Company.

20. LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:

The company has not given any loan or guarantee or provided security in connection witha loan to any other body corporate during the year.

Details with respect to Investment made are as under:

Particulars of Transaction Amount Whether the Limits prescribed under Section 186 exceed Yes/No Date of Board Meeting Date of General Meeting Balance Limit after utilization
1 Equity shares 120643963 Yes 29/12/2016 *Note NA
of HDFC
Bank Limited

* Company will take the approval of its shareholders in the ensuing Annual GeneralMeeting of the Company to ratify the transaction made by the Company.

21. CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

The company has entered into transactions with related party and the particulars ofcontracts or arrangements with related parties referred to in Section 188(1) asprescribed in Form AOC - 2 of the rules prescribed under Chapter IX relating to Accountsof Companies under the Companies Act 2013 is appended as Annexure – V.

22. PERFORMANCE EVALUATION:

The company has in place a policy on performance evaluation of independent directorsboard committees and individual directors. The Board of Directors evaluates its ownperformance in terms of operations of the company financial results etc. The performanceof committee(s) is evaluated by the board based on effectiveness of committee itsfunctioning and decisions etc. The board also reviews the performance of individualdirector(s) based on the contribution of the individual director to the board/ committeemeetings participation in discussions inputs given in the meeting.

As required under section 178(2) of the Companies Act 2013 and under Schedule IV tothe Companies Act 2013 on Code of conduct for Independent Directors a comprehensiveexercise for evaluation of the performances of every individual director of the Board asa whole and its Committees and of the Chairperson of the Company has been carried by yourcompany during the year under review as per the evaluation criteria approved by the Boardand based on guidelines given in Schedule IV to the Companies Act 2013.

For the purpose of carrying out performance evaluation exercise four types ofEvaluation forms were devised in which the evaluating authority has allotted to theindividual Director the Board as a whole its Committees and the Chairperson appropriategrading form 1 to 5 and in which rating 1 would be considered as lowest rating and rating5 would be considered as highest rating depending upon the performance.

Such evaluation exercise has been carried out:-

(i) of Independent Directors by the Board;

(ii) of Non-Independent Directors by all the Independent Directors in separate meetingheld for the purpose on 10th February 2017; (iii) of the Board as a whole andits Committees by all the Independent Directors in separate meeting held for the purposeon 10th February 2017; (iv) of the Chairperson of your Company by theIndependent Directors in separate meeting held on 10th February 2017aftertaking into account the views of the Executive/Non-Executive Directors; (v) of individualDirectors by the Nomination and Remuneration Committee; (vi) of the Board by itself;

Having regard to the industry size and nature of business your company is engaged inthe evaluation methodology adopted is in the opinion of the Board sufficientappropriate and is found to be serving the purpose.

23. AUDITORS:

As per Section 139 (2) of the Companies Act 2013 no listed company shall appoint orre-appoint an audit firm as an auditor for more than two terms of five consecutive years.Audit Firm which has completed its term shall not be eligible for reappointment as anauditor in the same company. Accordingly the term of existing Statutory Auditors M/s.Khimji Kunverji & Co. Chartered Accountants having firm registration no: 105146W iscoming to an end.

In view of the above there is need to appoint an Individual or a Firm as a StatutoryAuditor who shall hold office from the conclusion of forthcoming

Annual General Meeting of the Company until the conclusion of Annual General Meeting ofthe Company to be held in the financial year 2022.

Further Company has received written consent from M/s. Kamdar Dalal and Associates(Firm Registration no (129596W) Chartered Accountants as Statutory Auditor of the Company.The Audit Committee has also recommended to appoint said auditors in place of retiringauditor.

24. DISCLOSURE AS PER RULE 5 OF THE COMPANIES (APPOINTMENT

AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014:

Disclosures with respect to the remuneration of Directors KMPs and employees asrequired under Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenin ANNEXURE-VI.

25. PARTICULARS OF EMPLOYEES:

None of the employees of the Company is drawing remuneration in excess of the limitsprescribed under Rule (5)(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

26. LISTING ON STOCK EXCHANGES:

Your company's equity shares are listed on The Bombay Stock Exchange Mumbai (BSE). Thecompany has paid the listing fees to the stock exchanges for the financial year 2017-'18.

27. CORPORATE GOVERNANCE REPORT:

The Corporate Governance provision of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 is not applicable to the Company.

28. MANAGEMENT DISCUSSION ANALYSIS REPORT:

The Management Discussion and Analysis Report are provided in

ANNEXURE-VII.

29. RISK MANAGEMENT:

Your Director have enlarged mandate of Audit Committee to include responsibility toassist the Board in

a) Overseeing and approving the Company's enterprise wide risk management framework;and b) Periodic appraisal to assess any change needed in the context of changing businessenvironment.

30. RE-APPOINTMENT OF INDEPENDENT DIRECTOR:

Company has received notice in writing from Mr. Mukul Goyal along with the deposit ofrequisite amount under Section 160 of the Companies Act 2013 proposing himself as anIndependent Directors of the Company.

The re-appointment of Independent Director is made as a result of performanceevaluation of Directors. The Nomination & Remuneration Committee has also recommendedthe reappointment of Mr. Mukul Goyal as an Independent Director for a period of five yearsw.e.f. October 30 2017. Further Mr. Mukul Goyal has given a declaration to the Companythat they meet the criteria of independence as provided under section 149(6) of the Act.In the opinion of the committee he fulfils the conditions specified in the Act and therules framed thereunder for appointment/re-appointment as an Independent Director and heis Independent of the management. Reappointment of Independent Director is subject toapproval of Shareholders in ensuing Annual General Meeting of the Company.

31. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to sub-section (5) of Section 134 of the Companies Act 2013 and to the bestof their knowledge and belief and according to the information and explanations obtained/received from the operating management your Directors make the following statement andconfirm that-

(A) In the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

(B) The directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;

(C) The directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

(D) The directors had prepared the annual accounts on a going concern basis;

(e) The directors had laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and operating effectively

(F) The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and with aid down internal financial controls to befollowed by the company and those systems were adequate and operating effectively.

32. SEXUAL HARASSMENT:

Your Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices. The Company alwaysendeavours to create and provide an environment that is free from discrimination andharassment including sexual harassment. During the year ended March 31 2017 nocomplaints have been received pertaining to sexual harassment.

33. REVOCATIN OF SUSPENSION:

The Company's Shares are listed on BSE Ltd. on January 18 1999. BSE Ltd has suspendedthe trading in the Company's shares on account of non-compliance with Listing Agreementwith BSE Ltd. However Company is in the process of complying with the requirements andthe Company has filed application for revocation of suspension with BSE Ltd. As percommunication from BSE Ltd. dated 11 January 2017 Company has to incur reinstatementfees of Rs. 34 Lac plus tax upon issuance of In-principle approval from BSE Ltd. The feesmay be revised upward at the time of issue of In-principle approval.

34. ACKNOWLEDGEMENT:

Your Directors place on record their sincere gratitude for the assistance guidance andco-operation the Company has received from all stakeholders. The Board further places onrecord its appreciation for the dedicated services rendered by the employees of theCompany.

For and on behalf of the Board

Vikas Mapara –Managing Director Ashwin Jain -Director
DIN: 00211580 DIN: 00173983
Address: B/7 Sitaram Society Address: B-3-246 Kasturi
Devi Dayal Road Mulund (w) Plaza Manpada Road
Mumbai- 400080. Dombivali (E) Mumbai-421201
Date: 24.08.2017
Place: Mumbai.