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Santosh Industries Ltd.

BSE: 540822 Sector: Financials
NSE: N.A. ISIN Code: INE576C01017
BSE 00:00 | 15 Nov Santosh Industries Ltd
NSE 05:30 | 01 Jan Santosh Industries Ltd
OPEN 326.45
PREVIOUS CLOSE 326.45
VOLUME 200
52-Week high 326.45
52-Week low 0.00
P/E 8.17
Mkt Cap.(Rs cr) 157
Buy Price 326.45
Buy Qty 300.00
Sell Price 320.00
Sell Qty 2.00
OPEN 326.45
CLOSE 326.45
VOLUME 200
52-Week high 326.45
52-Week low 0.00
P/E 8.17
Mkt Cap.(Rs cr) 157
Buy Price 326.45
Buy Qty 300.00
Sell Price 320.00
Sell Qty 2.00

Santosh Industries Ltd. (SANTOSHINDUS) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting the 56th Annua) Report togetherwith the Audited Accounts of the Company for the financial year ended March 312017.

FINANCIAL PERFORMANCE:

Particulars

Standalone

Consolidated

Year ended 31st March 2017

Year ended 31st March 2016

Year ended 31st March 2017

Year ended 31st March 2016
Profit before taxation

2005.93

3211.23

2005.94

3211.23
Less: Provision for taxation
Current Year

210

490

490

210
Earlier Year

(3.18)

(6.38)

(6.38)

(5.33)
Deferred Tax

(5.33)

-

(5.33)

Profit after taxation

1804.44

2727.61

1804.44

2727.61
Share of Net Profit/(loss) of the Associates

-

-

35.89

27.27
Less: Transfer to Special Reserve (As per RBI Guidelines)

363

550

363

550
Cess: Transfer to CSR Fund

45.31

59

45.31

59
Add: Post Acquisition share of profit tilt 31.03.2015 548.91
Add: Excess Provision for Earlier Years

-

-

-

-
Add: Balance brought forward from previous year

16551.22

14431.51

17126.30

14431.51
Balance Carried forward to Balance Sheet

17888.31

16550.12

18500.37

17126.30
Earnings Per Share Basic

37.48

56.65

38.22 57.22
Earnings Per Share Diluted

37.48

56.65

38.22 57.22

DIVIDEND

The Board in its meeting held on 26th May 2017 has recommended a dividendon Equity Shares @ 10% i.e Re. 1/- per Equity Share of theface value of 10/- each. The proposal is subject to the approval of shareholders at theensuing Annual General Meeting (AGM) to be held on 18th September 2017

The Dividend if approved at the ensuing AGM would be paid to those Members whose nameappears in the Register of Members/ Beneficial Owners as stated in Notice of the ensuingAGM.

OPERATIONAL REVIEW

During the year under review the Company recorded profit after tax of Rs. 1804.44Lakhs for the year ended 31st March 2017 as compared to Rs. 2727.61 Lakhs forthe previous year.

The total assets of the Company stood at Rs 33457.94 Lakhs as against Rs 31756.64Lakhs in the last year.

APPROPRIATIONS

The Company proposes to transfer of Rs. 363 Lakhs (previous year Rs. 550 lakhs) toSpecial Reserve created u/s 45-IC of the Reserve Bank of India Act 1934

DEPOSITS

The Company being a Non Deposit Accepting NBFC has not accepted any deposit from thepublic during the year under review and shall not accept any deposits from the publicwithout obtaining prior approval of the Reserve Bank of India.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statement of the Company and its Associate Companies areprepared in accordance with the provisions of the Companies Act 2013 (the Act) andapplicable accounting standards along with all the relevant documents and the Auditors'Report thereon forms the part of this Annual Report. The Consolidated Financial Statementof the Company includes the Financial Statement of its Associate Companies also

INDIAN ACCOUNTING STANDARDS (IND AS)

Your Company has not adopted Indian Accounting Standards ("Ind AS") for thefinancial period 2016- 17 as it is not applicable for the Company; since NBFC Companiesare specifically exempted vide MCA notification dated 16/02/2015.

MATERIAL CHANGES AND COMMITMENTS

"PROPOSAL FOR LISTING OF EQUITY SHARES ON NATION -WIDE TRADING PLATFORM:

Pursuant to the SEBl Circulars dated CIR/MRD/DSA/14/2012 and CIR/MRD/ DSA/05/201S datedMay 30 2012 & April 17 2015 and after a prolonged discussion the Board of Directorsof the Company thought it prudent to get the equity shares of the Company listed on thenationwide trading platform of BSE Limited in order to enhance the value of theShareholders and persevere the status of listing of the equity shares of theCompany."

SHARE CAPITAL

During the year under review the Company there is no change in the share capital ofthe Company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control procedures commensurate with its size andnature of business. The objective of these procedures is to ensure efficient use andprotection of the Company's resources accuracy in financial reporting and due complianceof statutes and corporate policies and procedures.

Internal Audit is conducted periodically by the Internal Auditor who verifies andreports on the efficiency and effectiveness of internal controls. The adequacy of internalcontrol systems are reviewed by the Audit Committee of the Board in its periodicalmeetings.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has a comprehensive Internal Financial Control system commensurate with thesize scale and complexity of its operations. The system encompasses the major processesto ensure reliability of financial reporting compliances with policies procedures lawsregulations safeguarding of assets and efficient use of resources.

The policies and procedures adopted by the company ensures the orderly and efficientconduct of its business and adherence to the Company's policies prevention and detectionof frauds and errors accuracy and completeness of records and the timely preparation ofreliable financial information.

The Internal Auditor continuously monitors the efficiency of Internal Financial Controlsystem with the objective of providing to the Audit Committee and the Board of Directorsan independent objective and reasonable assurance on the adequacy and effectiveness ofthe organization's risk management with regard to the Internal Financial Control system.

The Audit Committee meets regularly to review reports submitted by the InternalAuditor. The Audit Committee also consults with the Company's Statutory Auditors toascertain their views on the financial statements including the financial reportingsystem and compliance to accounting policies and procedures followed by the Company

SUBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES

As on 31st March 2017 the company has 3 (three) associate companies.Neither the Company has any subsidiaries nor has it entered in any joint venture withother companies during the financial year 2016-17. Details of such Associate Companies aregiven in AOC-1 (as Annexure A).

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder section 92 of the Companies Act 2013 is marked as (Annexure B) which is annexedhereto and forms part of the Directors' Report.

AUDITOR & AUDITORS' REPORT

Statutory Auditor:

Pursuant to section 139 of the Companies Act 2013 read with the Rules framed thereunder the term of office of M/s. Narendra & Kochar & Co. Chartered AccountantsKolkata (Firm Registration NO.315201E) as Statutory Auditors of the Company will expire atthe ensuing Annual General Meeting of the Company.

The Board place on record its appreciation for the services rendered by M/s NarendraKochar & Co. as the Statutory Auditors of the Company.

In accordance with the provisions of section 139 of the Companies Act 2013 read withthe Rules framed there under and on the recommendation of the Audit Committee the Boardof Directors of the Company proposed to appoint M/s. Bahety & Goenka CharteredAccountants (Firm Registration No.3l711E) as the Statutory Auditors of the Company whoshall hold the office as Statutory Auditors of the Company from the conclusion of ensuing56th Annual General Meeting(AGM) of the Company for a term of five consecutiveyears till the conclusion of 61th Annual General Meeting subject toratification by members at every AGM. The appointment of M/s Bahety & GoenkaChartered Accountants as the Statutory Auditors of the Company is placed before themembers for approval at the ensuing Annual General Meeting of the Company.

As required under the Provisions of section 139(1) of the Companies Act 2013 theCompany has received a written consent from M/s Bahety & Goenka Chartered Accountantsfor their appointment and a certificate to the effect that their appointment if madewould be in accordance with the Companies Act 2013 and the Rules framed there under andthat they satisfy the criteria provided in section 141 of the Companies Act 2013 readwith Rule 4(1) of the Companies (Audit and Auditors) Rules 2014 and that they are notdisqualified for appointment.

The Members are requested to consider the appointment of statutory as aforesaid and fixtheir remuneration.

The Auditors Report on the Financial Statement for the year ended 31stMarch 2017 is unmodified i.e. it does not contain any qualification reservation oradverse remark and notes thereto are self explanatory and do not contain any explanations.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s J. Patnaik & Associates Practicing Company Secretaries (Certificate ofPractice No.3102) Kolkata as Secretarial Auditor to conduct the Secretarial Audit for thefinancial year ended 31st March 2017. The Secretarial Audit Report for thefinancial ended 31st March 2017 is appended to this Report as Annexure C.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark. INFORMATION PURSUANT TO SEC 134(3)(m) OF THE COMPANIES ACT 2013 Being anInvestment Company these provisions are not applicable to the company.

COMMENTS ON FOREIGN EXCHANGE EARNING AND OUTGO

There was no foreign exchange earnings and outgo during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In view of the provisions of Section 203 of the Companies Act 2013 Sri Surendra KumarDugar Managing Director Sri Rishabh Dugar Chief Financial Officer and Smt Jyoti Bhartia Company Secretary were identified and appointed as Key Managerial Personnel of theCompany.

As per the provisions of the Companies Act 2013 Mr. Kamal Kumar Dugar retires byrotation at the ensuing AGM and being eligible offers himself/herself for re- appointment.The Board recommends his re-appointment.

The Board on recommendation of Nomination and Remuneration Committee had appointed SmtJyoti Bhartia as Company Secretary of the Company with effect from 25.07.2016.

The Board due to the death of Smt Sohani Devi Dugar appointed Smt Madhu Dugar as anwoman director in casual Vacancy with effect from 01.10.2016. Who had expressed herwillingness to act as the Woman Director of the Company pursuant to Section 161 of theCompanies Act 2013 and has not been disqualified to act as a Director under section 164of the Act was appointed as a Director (Woman) on the Board of the Company.

The Board on recommendation of Nomination and Remuneration Committee and subject to theapproval from the members of the Company reappointed Sri Ajit Kumar Bachhawat as anIndependent Director of the Company in its meeting held on 30.03.2017 with effect from01.04.2017 for a period of five years who has expressed his willingness to act as anIndependent Director of the Company pursuant to section 149152 read with Schedule IV andall other applicable provisions of the Companies Act 2013 and the Companies (Appointmentand Qualification of Directors) Rules

2014 and who has submitted a declaration that he meets the criteria for independence asprovided in Section 149(6) of the Companies Act 2013 and whose period of appointmentshall not be liable to retire by rotation.

Mr. Surendra Kumar Dugar was appointed as Managing Director of the Company for a termof three years commencing from 22.09.2014 to 21.09.2017. He is working with the Companyfor a long period of time. He has enormous experience and knowledge in the affairs of theCompany. The Company has achieved notable growth during his tenure as Managing director.

Therefore on the recommendation of Nomination and Remuneration Committee the Board ofDirectors at its meeting held on 11th August 2017 proposed to reappoint Mr.Surendra Kumar Dugar as the Managing Director of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

BOARD EVALUATION

According to Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations

2015 and Schedule IV of the Companies Act 2013 a meeting of the Independent Directorswas held to review the performance of the Non-Independent Directors and the Board as awhole. Accordingly a meeting of Independent Directors was held on 13thFebruary 2017 wherein the performance of the Non-Independent Directors and the Board as awhole was evaluated.

Further the same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the independent Director being evaluated.

CRITERIA FOR EVALUATION OF DIRECTORS

For the purpose of proper evaluation the Directors of the Company have been dividedinto 2 (two) categories i.e. Independent and Board consisting of Non-Independent &Non- Executive and Executive Directors.

The criteria for evaluation includes factors such as engagement strategic planning andvision team spirit and consensus building effective leadership domain knowledgemanagement qualities teamwork abilities result/achievements understanding andawareness motivation/commitment/diligence integrity/ethics/values andopenness/receptivity.

NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the financial year2016-17 forms part of the Corporate Governance Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Vigil Mechanism as envisaged in the Companies Act 2013 the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isimplemented through the Company's Whistle Blower Policy to enable the Directors employeesand all Stakeholders of the Company to report genuine concerns to provide for adequatesafeguards against victimization of persons who use such mechanism and make provision fordirect access to the Chairman of the Audit Committee. The Vigil Mechanism/Whistle BlowerPolicy has also been uploaded on the website of the Company and may be accessed at thelink http://www.santoshindustrleslimited.in.

SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a 'Policy for Prevention of Sexual Harassment' to prohibit prevent or deter anyacts of sexual harassment at workplace and to provide the procedure for the redressal ofcomplaints pertaining to sexual harassment thereby providing a safe and healthy workenvironment in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 and the rules there under. During theyear under review no case of sexual harassment was reported.

COMPANIES POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company Pursuant to the provisions of Section 178 of the Companies Act 2013 andunder SEBI (Listing Obligations and Requirements) Regulations 2015 the Board ofDirectors of the Company based on the recommendation of the Nomination and RemunerationCommittee has formulated a Nomination & Remuneration Policy

The Nomination & Remuneration Policy of the Company inter alia includes theobjectives principles of remuneration guidelines for remuneration to Executive Directorsand KMPs and Non- Executive Directors criteria for identification selection andappointment of Board and KMPs and the terms of reference and role of the Nomination &Remuneration Committee.

The criteria for identification of the Board members including that for determiningqualification positive attributes independence etc. are summarily given hereunder:

• The Board member shall possess appropriate skills qualificationcharacteristics and experience. The object is to have a Board with diverse background andexperience in business government academics technology social responsibilitiesfinance law etc. and in such other areas as may be considered relevant or desirable toconduct the Company's business in a holistic manner

• Independent Director shall be person of integrity and possess expertise andexperience and/or someone who the Committee/Board believes could contribute to thegrowth/philosophy/strategy of the Company.

• In evaluating the suitability of individual Board Members the Committee takeInto account many factors including general understanding of the Company's businessdynamics social perspective educational and professional background and personalachievements.

• Director should possess high level of personal and professional ethicsintegrity and values and he must be willing to devote sufficient time and energy incarrying out their duties and responsibilities effectively. He must have the aptitude tocritically evaluate management's working as part of a team in an environment ofcollegiality and trust.

• The Committee evaluates each individual with the objective of having a groupthat best enables the success of the Company's business and achieves its objectives.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties during the year under review were on anarm's length basis and in the ordinary course of business and the provisions of Section188 of the Companies Act 2013 are not attracted. Thus disclosure in Form AOC-2 is notrequired.

Further there are no materially significant related party transactions during the yearunder review made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.

The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate the transactions between the Company and itsRelated Parties in compliance with the applicable provisions of the Companies Act 2013the Rules there under and the

Listing Agreement. This policy was considered and approved by the Board and has beenuploaded on the Company's website and may be accessed at the linkhttp://www.santoshtndustrieslimited.in

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantees given orsecurities provided or acquisition of securities in the ordinary course of its business bynon-banking financial companies are exempted. Therefore no such disclosure in this regardis required to be given in the Annual Report.

PARTICULARS OF EMPLOYEES:

There were no employees within the purview of Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 during the year ended31st March 2017. None of the employees of the Company was in receipt of remuneration forthat year which in the aggregate was not less than Rs. 6000000/- p.a

DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is marked as Annexure D which is annexedhereto and forms part of the Director' Report.

RISK MANAGEMENT

Risk Management is the process of identification assessment and prioritization ofrisks followed by co-ordinated efforts to minimize monitor and mitigate/control theprobability and/or Impact of unfortunate events or to maximize the realization ofopportunities. Since your Company is a NBFC Company the Risk Management Process is alsofocused towards better management of the affairs of the Company and to bring abouttransparency in the transaction and to ensure that there is no bad Investment insecurities and loans.

In this regard a Risk Management Committee has been constituted by the Board ofDirectors of the Company consisting of three members two of whom are independentdirectors.

The Risk Management Committee conducts quarterly review of all Loan & Investmentproposals and make recommendations to the Board. The guidelines in respect of RiskManagement have been laid down by the Risk Management Committee in respect of Loans &Investments.

The Risk Management Policy has been uploaded or the Company's website and may beaccessed at the link http:// www.santoshindustriesiimited.in

DIRECTORS' RESPONSIBILITY STATEMENT:

In compliance with Section 134(3)(c) of the Companies Act 2013 the Board of Directorsof your Company confirm that:

i) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

ii) the directors had selected such accounting policies and applied them consistentlyand make judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affair of the company at the end of the financial year ended 31stMarch 2017 and of the profit and loss of the company for that period;

iii) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

iv) the directors had prepared annual accounts for the year ended 31stMarch 2017 on a going concern basis;

v) the directors had laid down internal financial controls to be followed by theCompany and such internal financial controls were adequate and were operating effectively;and

vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws were in place and were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) forms an integral part of your Company's businessactivities Your Company is a responsible corporate citizen supporting activities relatedto the benefit of the Society as a whole.

In compliance with section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility policy) Rules 2014 the company has adopted a CSR policywhich is available at http:// www.santoshindustrieslimited.in

The Annual Report on CSR expenditures for the financial year 2016-17 is annexedherewith and forms part of this report (Annexure E)

CORPORATE GOVERNANCE

Your Company complies with the provisions laid down in Corporate Governance laws. Itbelieves in and practices good corporate governance. The Company maintains transparencyand also enhances corporate accountability. A report on Corporate Governance along with aCertificate from the Auditors of the Company regarding the compliance with the conditionsof Corporate Governance as stipulated under regulation 34 read with Schedule V of the SEBI(Listing Obligations and Disclosure RequirementsRegulations 2015 forms part of thisAnnual Report.

ACKNOWLEDGEMENT

Your Directors wish to place records their sincere appreciation to the Bankers of theCompany Company's customers vendors and investors for their continued support during theyear.

The directors also wish to place their appreciation for the dedication and contributionmade by employees at all levels and look forward to their support in future as well.

For and on behalf of the Board

Registered Office:
Suite No 3A 3rd Floor Umang Lodha
3A Auckland Place CHAIRMAN
Kolkata - 700 017. DIN:06646876
Dated: 26th May 2017

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