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Span Divergent Ltd.

BSE: 524727 Sector: Others
NSE: N.A. ISIN Code: INE004E01016
BSE 00:00 | 09 Apr 13.16 0.88
(7.17%)
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NSE 05:30 | 01 Jan Span Divergent Ltd
OPEN 12.88
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VOLUME 1477
52-Week high 17.80
52-Week low 8.66
P/E 9.20
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.88
CLOSE 12.28
VOLUME 1477
52-Week high 17.80
52-Week low 8.66
P/E 9.20
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Span Divergent Ltd. (SPANDIVERGENT) - Director Report

Company director report

To

The Shareholders

Your Directors have pleasure in presenting the 39th Annual Report of Span DivergentLimited (the Company) on the business and operations of the Company together with theaudited financial statements for the year ended on March 31 2019.

1. FINANCIAL SUMMARY/PERFORMANCE OF THE COMPANY

The financial performance of the Company for the financial year ended March 31 2019along with figures of previous financial year is summarized below:

Amount (Rs. In Lacs)

Particulars 2018 - 19 2017 - 18
Total Revenue 296.24 510.73
Profit/(Loss) before tax Depreciation and Finance Cost (Excluding extraordinary income/(Loss)) (0.78) (87.70)
Less: Finance Cost (17.26) (70.43)
Profit/(Loss) before Depreciation (18.03) (158.13)
Less: Depreciation (112.35) (55.56)
Profit/(Loss) before tax (130.38) (213.69)
Exceptional Item (183.10) (63.95)
Profit/(Loss) before tax (313.49) (277.65)
Income Tax Expense (10.73) (30.23)
Profit/(Loss) for the period from continuing operations (324.21) (307.88)
Other comprehensive income
Remeasurement costs of Post employment benefits (7.98) (0.31)
Deferred tax on post employment 0.02 0.11
Other comprehensive income for the year net of tax (7.96) (0.20)
Total comprehensive income for the year (332.17) (308.09)
Earnings per equity share for profit from operation attributable to owners of the entity:
Basic earnings per share (5.94) (5.64)
Diluted earnings per share (5.94) (5.64)

2. DIVIDEND

Board after detailed deliberation and considering loss incurred during the year underreview decided not to recommend any dividend for the financial Year 2018-19.

The dividend declared/recommended is in accordance with the principles and criteria asset out in the Dividend Distribution Policy. The Dividend Distribution Policy of theCompany is set out as Annexure A.

3. TRANSFER TO RESERVES:

No amount has been transferred to Reserves for the financial year ended on March 312019.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

During the Financial Year 2018-19 the Company has incurred losses which includes anexceptional item of Rs 18310183 Contributed by Impairment of capital invested in asubsidiary company Biospan Scientific LLP. The principal reasons for such loss areattributed to the fact that the Company's investments are in two business verticals whichare into start-up phase. After sale of In-Vitro Diagnostics Business of the Company toJapanese Company the Company explored various business opportunities and decided toventure into Food & Agriculture (FAB) and Health Care & Life Science (HCLS)related businesses.

Company is operating in various businesses through specific subsidiary firm formed foreach of the businesses.

Your Company has wholly owned overseas subsidiary company viz. Span Diagnostics SouthAfrica (Pty) Limited and subsidiary company a joint venture with UK based companyMicronclean viz M/s. BioSpan Contamination Control Solutions Private Limited. In terms ofproviso to sub-section (3) of the Section (3) of Section 129 of the Act the salientfeatures of the financial statement of the subsidiaries are set out in the prescribed FormAOC – 1 which forms part of the Annual Report.

The details of firms where Company is actively pursuing the business development areas follows:

FAB Vertical:

Dryfruit Factory LLP:

Company has completed process of setting up Dry Fruits processing plant near Ahmedabad;Gujarat for processing of Raw Cashew Nuts (RCNs) into finished cashews and commercialproduction has begun from second quarter of FY2018. During the year Company is accreditedwith ISO 9001:2015 and Food Safety System Certification (FSSC) 22000 successfully. Companyhas also started offering "Tolling services" to other players to ensure thatplant is utilized for its maximum capacity.

During the year under review the LLP yielded Total Revenue of INR 1937.56 lacs and netloss of INR 580.13 Lacs as against Total Revenue INR 1268.14 Lacs and net loss of INR549.12 Lacs of previous year. The Total Comprehensive Income of the LLP for the year endedMarch 31 2019 is INR (582.31) lacs as against INR (549.19) Lacs in previous year. Theloss is attributed mainly to the unprecedent increase in the Raw Cashew Nut cost whichturmoiled entire cashew industry during the year.

Aranya Agri Biotech LLP:

Company has ventured in to Plant Tissue Culture business by setting up a business inand around Vadodara Gujarat. The Company has already acquired an asset of an existingnon-operative unit which was in the business of Plant Tissue Culture which has helpedCompany getting strong Head way in starting its operation and the Company become fullyoperational in second half of FY2018. Apart from the already available product rangeCompany also has started Research and development to embark upon new products which can becultivated through tissue culture techniques. Company is likely to have tie ups withUniversities for various projects planned in next year.

During the year under review the LLP yielded Total Revenue of INR 369.94 lacs and netloss of INR 331.31 Lacs as against Total Revenue INR 63.48 Lacs and net loss of INR 262.28Lacs of previous year. The Total Comprehensive Income of the LLP for the year ended March31 2019 is INR (332.20) lacs as against INR (262.28) Lacs in previous year. The principalreason for loss in the initial years are very long operating cycle of plant tissue cultureproducts handled by the company (12-18 months) which called for large operatingexpenditures

Desai Farmharvest LLP:

No operation has started in this company. It will be operational at an appropriate timein line with the overall strategy of the Company. During the year under review the LLPincurred net loss of INR 0.04 Lacs as against net loss of INR 2.23 lacs in previous year.The Total Comprehensive Income of the LLP for the year ended March 31 2019 is INR (0.04)lacs as against INR (2.23) Lacs in previous year.

HCLS Vertical:

BioSpan Scientific LLP

Company had introduced a niche and selective product portfolio to serve Indiancustomers in Health Care and Academia segments. BioSpan Scientific's portfolio focuses onthe areas of Microbiology Protein research and Scientific Laboratory products. As of nowcompany has limited products under its name.

During the year under review the LLP yielded Total Revenue of INR 56.11 lacs and netloss of INR 9.83 Lacs as against Total Revenue INR 108.80 Lacs and net loss of INR 95.13Lacs of previous year. The Total Comprehensive Income of the LLP for the year ended March31 2019 is INR (9.83) lacs as against INR (95.13) Lacs in previous year.

BioSpan Contamination Control Solutions Private Limited: (BSCCS)

BSCCS is a joint venture formed between Span Divergent Ltd. and Micronclean UK withSpan having 67 % equity stake. It caters to the niche segment of Pharmaceutical andBiotechnology industry having clean room consumable requirement. The products are importedfrom Joint Venture partner P company from UK and other reputed companies world-wideoperating in the same segment.

It is expected to have some more-tie-ups in coming year to increase the productportfolio.

During the year under review the Company yielded Total Revenue of INR 82.93 lacs andnet loss of INR 166.51 Lacs as against Total Revenue INR 2.63 Lacs and net loss of INR15.73 Lacs of previous year. The Total Comprehensive Income of the Company for the yearended March 31 2019 is INR (169.35) lacs as against INR (15.73) Lacs in previous year.

Span Diagnostics LLP

No operation has started in this company. It will be operational at an appropriate timein line with the overall strategy of the Company. During the year under review the LLPincurred net loss of INR 0.05 Lacs as against net loss of INR 0.07 lacs in previous year.The Total Comprehensive Income of the LLP for the year ended March 31 2019 is INR (0.05)lacs as against INR (0.07) Lacs in previous year.

Apart from theses above mentioned ventures the Company is also working onconsolidating its presence in the field of Food Agriculture and Healthcare which will beshared with all the stake holders from time-to-time.

Span Diagnostics South Africa (PTY) Limited

To explore the business potential in strategically important region the company haswholly owned overseas subsidiary Company in South Africa.

Pursuant to sale of IVD business of Span Divergent Ltd. (Formerly Span DiagnosticsLimited) (SDL) to Arkray Healthcare Private Limited in India the distribution agreementfor the Southern African region (SADC Region) between SDL and Span SA also becameinoperative. However because of its strategic importance and potential of the regionBoard of Directors of SDL decided to continue Span SA as an active entity.

Industry Structure Development & outlook

The Company after selling its IVD Business Undertaking through Slump Sale to M/S.Arkray Healthcare Private Limited has invested in the business in FAB and HCLS verticalsand operating businesses through its Subsidiaries. The Company is mainly providing supportto all the entities in terms of business management financial technical and operationalexpertise. Additionally it also gets involved in monitoring and guiding all the entitiesin various compliances providing them a vital support in networking liasioning andbuilding business in each of these entities.

Company will continue to look for further opportunities in these segments for furtherconsolidating the business.

Research & Development

As Company is operating through its subsidiary it is not having any R&Dactivities.

Human resources and industrial relations

As on March 31 2019 Company has 8 employees. The focus of the Company is to enrichits employees by promoting learning & development and providing opportunities forenhancing their knowledge base continuously.

During the year Company continues to have cordial and harmonious relations with itsemployees.. The Company strives to empower its employees to take up independentresponsibility and thereby reaping the benefits of diverse skills set of all employees.Company also encourages employees for taking up multi functional roles which eventuallycan result in overall development of their talent and capability and Company also getsbenefited through such talent.

5. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There was no significant material order passed by the regulators or courts.

6. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:

Management is committed to continue maintaining Company's internal control systemwhich is reviewed and monitored critically. Compliance of the same is ensured with veryvaluable inputs from the independent directors Internal Auditors and Statutory Auditors.Their vast experience and knowledge base has contributed tremendously in betterment ofsystems and processes resulting in better internal control. Internal control system isfurther supported by periodic review by management and the Audit Committee. Companymaintains high focus towards all regulatory compliances which is regularly reviewed bythe Board.

During the year such controls were tested and no reportable material weakness in thedesign or operations were observed.

7. FIXED DEPOSITS

Company have not accepted any fixed deposits and as such no amount of principal orinterest of fixed deposit was outstanding as of balance-sheet date.

8. PARTICULARS OF EMPLOYEES

During the financial year 2018-19 none of the employee of the Company has receivedremuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

The information required under Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is provided in the Annexure - B forming part of theReport. None of the employees listed in the said Annexure is related to any Director ofthe Company.

9. AUDITORS & THEIR REPORTS

(1) Statutory Auditors:

Pursuant to the provisions of Section 139 of the Act and the rules framed there underat the Annual General Meeting held on September 20 2015 M/s. Haribhakti & Co LLP.Chartered Accountants had been appointed as Statutory Auditors of the Company to holdoffice from conclusion of 36 Annual General Meeting till the conclusion of 40 the AnnualGeneral Meeting to be held in the year 2020. The Companies (Amendment) Act 2017 haswaived the requirement for ratification of the appointment of Statutory Auditors by theShareholders at every Annual General Meeting. Hence the ratification of appointment ofStatutory Auditors by your company is not required. Accordingly Statutory Auditor willcontinue to hold office till the conclusion of the 40th Annual General Meeting of theCompany.

The Auditor's Report for the financial year 2018-2019 does not contain anyqualification reservation or adverse remark which requires any clarification /explanation. The Auditor's Report is enclosed with the financial statement in this AnnualReport. There was no instance of fraud during the year under review which required thestatutory auditors to report to the Audit Committee and/or Board under Section 143(12) ofthe Act and the rules made thereunder.

The Notes on accounts referred to in the Auditor's Report are self explanatory andtherefore do not call for any further comments.

(2) Secretarial Auditors:

Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rule 2014 the Board of Directors of theCompany had appointed M/s. Mitesh Rana & Co. a firm of Company Secretaries to carryout Secretarial Audit for the year ended on March 31 2019. The Secretarial Audit Reportis annexed as Annexure-E.

The Auditors'' Report and the Secretarial Audit Report for the financial year endedMarch 312019 do not contain any qualification reservation adverse remark.

The Board of Directors of your Company has appointed M/s. Mitesh Rana & Co.Company Secretaries Vadodara to carry out Secretarial Audit of your Company for FY 2019– 2020

Your Company had complied with the provisions of Secretarial Standards on BoardMeetings and General Meetings issued by the Institute of Company Secretaries of India andapproved by the Central Government.

(3) Internal Auditors

The Board of Directors appointed M/s. Ramanlal G Shah & Co. Chartered Accountantsas Internal Auditors of the Company for financial year 2019 – 2020.

10. SHARE CAPITAL

The paid up equity capital of the Company as on March 31 2018 was Rs. 54617470/-divided into 5461747 Equity Shares of Rs. 10/- each. The Company has neither issued anyshares nor granted stock option nor sweat equity.

11. ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as "Annexure E" to theBoard's Report.

12. CONSERVATION OF ENERGY

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 are not given considering the factthat the Company is in the process of establishing new business after sale of its In-VitroDiagnostics Business and its office is an administrative office only and no manufacturingactivity have been carried out during the year. However in the office all the lights usedare LED lights and all air-conditioners are rated 5 star for every efficiency and operatedat optimum temperature to conserve the electricity.

13. TECHNOLOGY ABSORPTION RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING& OUTGO

The particulars are attached in "Annexure 'C'" of this report.

14. CORPORATE SOCIAL RESPONSIBILTY

Though not mandatory in terms of Section 135 of Companies Act 2013 for the year endedon March 31 2019 the Company has formulated Corporate Social Responsibility (CSR) Policyin accordance with Section 135 of the Companies Act 2013 and reconstituted CSR Committeeunder the Chairmanship of an Independent Director Mr. Kamlesh Patel. During the year underreview Company had contributed funds for medical aid. The contribution in this regard hasbeen made to the Registered Trust.

15. DIRECTORS/KEY MANAGERIAL PERSONNEL

Name of the Director Designation
Sanjay Natwarlal Mehta Director
Pradipkumar Keshavlal Desai Director
Late. Lataben Pradipkumar Desai Woman Director (uo to March 23 2019)
Pranav Sureshbhai Desai Director
Viral Pradipkumar Desai Managing Director
Sushil Kanubhai Shah Independent Director
Shyamal Ghosh Independent Director
Kamlesh Maganlal Patel Independent Director
Needamangalam Gopalaswami Independent Director
Manjila Subramaniam Woman Independent Director (w.e.f. March 23 2019)
Paras Desai Chief Finance Officer (CFO) w.e.f August 09 2018
Minesh Mohanbhai Patel Chief Finance Officer (CFO ) upto August 09 2018
Samiksha Kansara Company Secretary

16. INDEPENDENT DIRECTORS DECLARATION

The Independent Directors of the Company have given the declaration and confirmation tothe Company as required under Section 149(7) of the Companies Act 2013 and Regulation25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015confirming that they meet the criteria of independence and that they are not aware of anycircumstances or situation which exists or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgementand without any external influence.

The Board of Directors of the your company confirms that the Independent Directorsfulfill the conditions specified in Section 149 (6) of the Act and Regulation 16(1)(b) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and areindependent of the management.

17. BOARD MEETINGS

An agenda of the meeting is prepared and circulated in advance to the Directors. Duringthe year Five Board Meetings and Four Audit Committee meetings were convened and held. Thedetails of which are given in the Corporate Governance Report along with other committeemeetings. The intervening gap between the meetings was within the period prescribed underthe Companies Act 2013.

18. BOARD EVALUATION

Pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015mandates that the Board shall monitor and review the Board evaluation framework. TheCompanies Act 2013 states that a formal annual evaluation needs to be made by the Boardof its own performance and that of its committees and individual directors. Schedule IV ofthe Companies Act 2013 states that performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the Director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe corporate governance report. The Board approved the evaluation results as collated bythe nomination remuneration committee. None of the independent directors are due forre-appointment.

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and Individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by Securities and Exchange Board of India(SEBI) under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes Information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performanceof the Individual Directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. 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.

19. Appointments :

The Companies Act 2013 provides for the appointment of the independent directors.Sub-section 10 of Section 149 of the Companies act 2013 provides that independentdirectors shall hold office for a term of five consecutive years on the Board of aCompany; and shall be eligible for the re-appointment on passing a special resolution bythe shareholders of the company. In compliance with the aforesaid provision and subject toprovision of Securities Exchange Board of India Act 1992 Mr. Kamlesh Patel Mr. N.Gopalaswami Mr. Shyamal Ghosh and Dr. Sushil Shah have been appointed as an IndependentDirectors of the Company for term of 5 (Five) years. At the ensuing Annual General Meetingthe Company re-appointment of all these directors recommended by passing specialresolution for second term of 5 years.

20. RETIREMENTS RESIGNATIONS AND CHANGE IN THE DESIGNATION :

I. Dr. Pranav S Desai Director of the Company who retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for reappointment. Theretirement of Director by rotation at the ensuing Annual General Meeting is determined inaccordance with the provisions of the Companies Act 2013.

II. During the year under review Mrs. Lataben Pradipkumar Desai resigned from thedirectorship of the Company with effect from March 23 2019.

III. Dr. Manjula Subramaniam was appointed as an Additional Director of the Companywith effect from March 23 2019 to hold office of director upto this Annual GeneralMeeting. At the ensuing Annual General Meeting of the Company her appointment as NonExecutive Independent Director of the Company is recommended by passing special resolutionfor term of five years.

IV. Mr. Minesh Patel Chief Finance Officer of the Company had resigned from theposition of Chief Finance Officer of the Company with effect from August 09 2018.

V. Mr. Paras Desai had been appointed as Chief Finance Officer of the Company witheffect from August 09 2018

21. AUDIT COMMITTEE :

The Audit Committee comprises of three Independent Directors namely Mr. Shyamal GhoshChairman Mr. N. Gopalaswami Mr. Kamlesh M. Patel and Mr. Sanjay N. Mehta (Non ExecutiveDirectors). Ms. Samiksha Kansara Company Secretary acts as the secretary to the AuditCommittee with effect from September 01 2017. The composition and the Terms of Referenceof the Audit Committee meet with the requirements of Section 177 of the Companies Act2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

There were four meetings held during the year.

Attendance of each member at the Audit Committee meetings held during the year

Name of Members No. of Meetings held No. of Meetings Attended
Mr. Shyamal Ghosh Chairman 4 4
Mr. N. Gopalaswami 4 4
Mr. Sanjay N. Mehta 4 3
Mr. Kamlesh M. Patel 4 3

22. VIGIL MECHANISM

The Company has established a mechanism for employees to report to the managementconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct or ethics policy and the same has been communicated withinorganization.

In staying true to our values of strength performance and passion the Company iscommitted to the high standards of Corporate Governance and Stakeholders Responsibility.

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company hasformulated policy on "Protection of Women's Rights at Workplace' as per theprovisions of the Sexual Harassment of women at Workplace (Prevention Prohibition &Redressal) Act 2013. This has been widely disseminated. There were no cases of sexualharassment complaints received by the Company in the financial year 2018 – 19. Thepolicy on Prevention Prohibition and Redressal of Sexual Harassment of Women at workplace is placed on website of the Company www.span.in.

23. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises of 3 directors of which twodirectors are independent directors & one Non Executive Director as at March 31 2019.

There was a one nomination and remuneration committee meeting held during the year.

Attendance of each member at the Nomination and Remuneration Committee held during theyear.

Name of Members No. of Meetings held No. of Meetings attended Designation
Mr. Shyamal Ghosh Chairman 1 1 Independent Non-Executive Director
Mr. Sanjay N. Mehta 1 1 Non Executive Director
Mr. N. Gopalaswami 1 1 Independent & Non-Executive Director

The main term of reference of Nomination and Remuneration Committee is to review andrecommend the revision in remuneration of managerial personnel to the Board of Directors.The Nomination and Remuneration Committee while reviewing the remuneration considers theindustry remuneration standards educational qualification relevant experience andperformance of the concerned managerial personnel vis--vis the company requirements.

The Board has on recommendation of the Nomination and Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management and theirremuneration. The Nomination and Remuneration Policy is stated in the Corporate GovernanceReport.

24. LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

25. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onarm's length basis were in the ordinary course of business and in compliance of theprovision of Section 188 of the Companies Act 2013 and rules made there under and ListingAgreement & SEBI (Listing Obligations and Disclosures Requirement) Regulation 2015.There were no materially significant related party transactions made by the Company withpromoters Key Managerial Personnel or other designated persons which may have potentialconflict with Interest of the Company at large. All related party transactions are placedbefore the Audit Committee as also the Board for approval. You may refer to related partytransactions in note No. 28 of the Stand Alone Financial Statements.

Prescribed form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act 2013& Rule 8(2) of the Companies (Accounts) Rules 2014 is furnished as Annexure – Dto this report.

26. MANAGERIAL REMUNERATION :

Name of the Director Designation Remuneration in the year 2019 in Rs. Remuneration in the year 2018 in Rs. Sitting fees in the F.Y. 2019
Sanjay Natwarlal Mehta Director NIL NIL 30000
Pradipkumar Keshavlal Desai Director NIL NIL 25000
Lataben Pradipkumar Desai* Woman Director NIL NIL 25000
Pranav Sureshbhai Desai Director NIL NIL 10000
Viral Pradipkumar Desai Managing Director 6280160*** 8595000 NIL
Sushil Kanubhai Shah Independent Director NIL NIL 15000
Shyamal Ghosh Independent Director NIL NIL 40000
Kamlesh Maganlal Patel Independent Director NIL NIL 35000
Needamangalam Gopalaswami Independent Director NIL NIL 40000
Mr. Minesh Patel** Chief Financial Officer 133901 343725 NA
Mr. Paras Desai** Chief Financial Officer 4267758 NIL NA
Ms. Samiksha Kansara Company Secretary 192000 112000 NA

*Ms. Lataben P Desai Director of the Company resigned from directorship with effectfrom March 23 2019

** Mr. Minesh Patel ceased to be CFO of the Company with effect from August 9 2018 andMr. Paras Desai was appointed as CFO of the company with effect from August 9 2018

*** Includes provision of superannuation Gratuity and contribution to Provident Fund

The median remuneration of the employee of the Company for the year 2018 – 19 isRs. 580608 as against Rs. 120515 for the year 2017 – 18. During the year medianremuneration is increased by 382%. There were 12 employees on rolls of the Company duringthe financial year. The increase in remuneration is in line with the market trends. Inorder to ensure that remuneration reflects company performance the performance pay waslinked to organization performance.

Sr. No. Name of Director Remuneration Ratio of Remuneration to the median remuneration of the employees
01. Mr. Viral P Desai 6280160 10.82

During the year under review there was no increase in remuneration of the ManagingDirector Mr. Viral P Desai who is reappointed for a further period of 3 years with effectfrom July 01 2016.

The further information required pursuant to Section 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofthe employees of the Company will be provided upon request. The information required underRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided in the Annexure-B forming part of the Report.

27. CERTIFICATE ON CORPORATE GOVERNANCE :

A report on Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 forms part of the Annual Report. Thecertificate received from the M/s. Mitesh Rana & Co. confirming compliance with theconditions of Corporate Governance is attached to this Report.

28. MATERIAL CHANGE & COMMITMENTS IF ANY

There is no material changes and commitments that would affect financial position ofthe company from the end of the financial year of the company to which the financialstatements relate and the date of director's report.

29. COST AUDITORS

Cost Audit is not applicable to the Company for the year 2019 – 20. Hence Noappointment of Cost Auditor was required to be made.

30. RISK MANAGEMENT

Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. A formal enterprise wide approach to Risk Management is being adopted by theCompany and key risks will now be managed within a unitary framework. As a formalroll-out all business divisions and corporate functions will embrace Risk ManagementPolicy and Guidelines and make use of these in their decision making. Key business risksand their mitigation are considered in the annual/ strategic business plans and inperiodic management reviews. The risk management process in our multi-business multi-siteoperations over the period of time will become embedded into the Company's businesssystems and processes such that our responses to risks remain current and dynamic.

The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis.

31. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 the directors would like tostate that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed.

(b) the directors have selected such accounting policies and applied them consistentlyand made judgements 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 of the Company for the year under review

(c) the directors have 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 detecting fraud and other irregularities

(d) the directors have prepared the annual accounts on a going concern basis

(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

32. CAUTIONARY STATEMENT

Statements in this Report particularly those which relate to Management Discussion andAnalysis and the Corporate Governance Report describing the Company's objectivesprojections estimates and expectations may constitute "forward lookingstatement" within the meaning of applicable laws and regulations. Actual results maydiffer substantially or materially from those either expressed or implied in the statementdepending on the circumstances.

33. ACKNOWLEDGMENT

Your Directors are happy to place on record their appreciation of the whole-heartedco-operation and hard work of all members of SPAN family. The Directors would like toplace on record a deep sense of gratitude to the HDFC Bank and Government Authorities fortheir co-operation and assistance rendered to the Company.

For and on behalf of the Board
Date: May 17 2019 Viral P Desai Dr. Pradip K Desai
Place: Surat Managing Director Non Executive Director
DIN : 00029219 DIN : 00026451

ANNEXURE A TO THE DIRECTORS' REPORT – DIVIDEND DISTRIBUTION POICY

OBJECTIVE

The objective of this policy is to establish the principles and criteria to beconsidered by the Board of Directors prior to recommending dividend to the EquityShareholder of Span Divergent Limited. The policy is framed under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015. TheCompany has a consistent dividend policy and has endeavored to judiciously balancerewarding shareholder through dividends whilst supporting future growth and long-terminterests of the Company and its stakeholders.

PARAMETERS TO BE CONSIDERED BEFORE RECOMMEDING DIVIDEND

The Board of Directors shall inter alia consider the following parameters beforerecommending dividend:

Statutory and Regulatory Parameters

The Company shall declare dividend only after ensuring compliance with requisiteregulations and provisions of the Companies Act 2013 and rules made there under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended and anyother regulations as may be applicable from time to time. The Board will consider variousparameters as mentioned below before arriving at a decision on declaration of dividend:

Financial Parameters

Profits earned during the financial year Accumulated reserves Funding and liquidityconsiderations

Profitability outlook for the next two/three years Leverage ratios

Other factors and/or material events which the Board may consider

External Factors

Shareholder expectations including individual shareholders Taxation provisions Macroand Micro Economic conditions Government policies

Any other factors and / or material events which the board may consider

UTILISATION OF RETAINED EARNINGS

Retained earnings shall be utilised in accordance with prevailing regulatoryrequirements creating reserves for specific objectives fortifying the balance sheetagainst contingencies generating higher returns for shareholders through reinvestment ofprofits for future growth and expansion and any other specific purpose as approved by theBoard. The Company shall endeavor to utilise retained earnings in a manner that shall bebeneficial to both the interests of the Company and its stakeholders.

DIVIDEND AND CLASSES OF SHARES

The Board may declare interim or recommend final and/or special dividend as may bepermitted under the Companies Act 2013 or any amendment modification variation orre-enactment thereof.

Currently the Company does not have any other class of shares (including shares withdifferential voting rights) other than equity shares.

DIVIDEND PAYOUT RATIO

The Company has followed a stable dividend policy in the past and strives to maintain aconsistent dividend payout ratio.

CONFLICT IN POLICY

In the event of a conflict between this policy and the then existing regulations theregulations shall prevail.

AMENDMENTS

To the extent any change/amendment is required in terms of applicable law or change inregulations the regulations would prevail over the policy and the provisions in thepolicy would be suitably modified to make it consistent with the law. Such amended policyshall be placed before the Board for noting and necessary ratification.

REVIEW OF POLICY

The Board shall review the Dividend Distribution Policy of the Company periodically.

DISCLOSURE OF POLICY

The Dividend Distribution Policy shall be disclosed in the Annual Report of the Companyand placed on the Company's website www.span.in

Annexure – B to the Board's Report

[Pursuant to Rule 5 of the Companies (Appointment and Remuneration of ManagementPersonnel Rules 2014]

a. The ratio of the remuneration of each director to the median remuneration of theEmployees of the Company for the financial year:

The median remuneration of the employees of the Company for the financial year is INR580608/-

Non Executive Directors Ratio to Median Remuneration
Pradipkumar Keshavlal Desai -
Lataben Pradipkumar Desai -
Sanjay Natwarlal Mehta -
Pranav Sureshbhai Desai -
Sushil Kanubhai Shah -
Shyamal Ghosh -
Kamlesh Maganbhai Patel -
Needamangalam Gopalaswami -
Executive Directors Ratio to Median Remuneration
Mr. Viral P Desai 10.82

b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Finance Officer and Company Secretary in the financial year:

Directors Chief Executive Officer Chief Financial Officer % Increase in remuneration in the financial year
and Company Secretary
Pradipkumar Keshavlal Desai -
Lataben Pradipkumar Desai -
Sanjay Natwarlal Mehta -
Pranav Sureshbhai Desai -
Sushil Kanubhai Shah -
Shyamal Ghosh -
Kamlesh Maganbhai Patel -
Needamangalam Gopalaswami -
Mr. Viral P Desai* Nil
Mr. Minesh Patel 10.57%
Mr. Paras Desai Nil
Ms. Samiksha Kansara Nil

*There is no increase in remuneration paid to Mr. Viral P Desai. However Remunerationincludes provision of superannuation gratuity and contribution to provident fund.

c. The percentage increase in the median remuneration of employees in the financialyear: 381%

Above figures given here as compared to previous year median which is not strictlycomparable since the number of employee on rolls of the company stood 8 as on March 312019 as compared to 10 as on March 31 2018.

d. The number of permanent employees on the rolls of the Company: 8

e. Average percentile increase already 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:

The average increase in remuneration per employees was -41 % The Profit after tax forthe year 2018-19 is INR (332.17) Lacs. The employees related cost is INR 171.36 Lacs. Theaverage increase in remuneration per employee is in line with normal pay revision andvariable component forming integral part of the remuneration which is linked to individualperformance revenue achievement profitability achievement employee satisfactionretention of key employees achieving strategic goals customer satisfaction apart fromCompany's performance as a whole.

The average annual increase in the salaries of employees other than managerialpersonnel in the last financial year was around 10.25%. Increase in the managerialremuneration for the year was Nil.

There were no exceptional circumstances which warranted an increase in managerialremuneration which was not justified by the overall performance of the Company.

f. Affirmation that the remuneration is as per the remuneration policy of the Company.

The Company affirms that the remuneration paid are as per the remuneration policy ofthe Company.

ANNEXURE 'C'

Form of disclosure of particulars with respect to Absorption of Technology Research& Development (R & D)

1. Specific areas in which R&D was carried out by the Company and benefits derivedas a result of the above R & D:

During the year under review subsequent to sale of its In-Vitro Diagnostics Businessto the Arkray Healthcare Private Limited there is no manufacturing as well as R & Dactivity carried out.

Expenditure on R & D – Not Applicable

2. Technology absorption adaptation and innovation

Efforts in brief made towards technology absorption adaptation and innovation: NotApplicable

Benefits derived as a result of the above efforts e.g. product improvement costreduction product development import substitution etc: Not Applicable

3. FOREIGN EXCHANGE EARNING AND OUTGO

Sr. No. Particulars 2018 – 19 2017 – 18
Rs. Rs.
1. Total Foreign Exchange Earned Nil. Nil.
2. Total Foreign Exchange Outgo 35312 858268

 

For and on behalf of the Board
Date: May 17 2019 Viral P Desai Dr. Pradip K Desai
Place: Surat Managing Director Non Executive Director
DIN : 00029219 DIN : 00026451

Annexure – D to the Board's Report

Form No. AOC – 2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014

Form for disclosure of particulars of contracts/arrangement entered into by the companywith related parties referred to in sub-section (1) of section 188 of the Companies Act2013 including certain arms length transaction under third proviso thereto.

Details of contracts or arrangements or transactions not at arm's length basis:

Name(s) of the related party and nature of relationship Nature of contracts/ arrangements/ transactions Duration of the contracts/ arrangements/ transactions Salient terms of the contracts or Arrangement or transactions including the value if any Justification for entering into such contracts or arrangements or transactions Date(s)of approval by the Board Amount paid as advances if any Date on which the special resolution was passed in general meeting as require under first proviso to section 188
Not Applicable

*During the Financial Year 2018-19 no contract or arrangement or transaction wasentered into by the company with the related parties which is not at arm's length basis.

Details of material contracts or arrangement or transactions at arm's length basis:

Name(s) of the related party and nature of relationship Nature of contracts/ arrangements/ transactions Duration of the contracts/ arrangements/ transaction Salient terms of the contracts or Arrangement or transactions including the value if any Date(s) of approval by the Board Amount paid as advances if any
Not Applicable

Note: During the year under review no material transactions contracts or arrangements{as defined under the listing Agreement or which were above the threshold limits mentionedunder Rule 15 of the Companies (Meetings of Board & its Powers) Rules 2014}wereentered with the related parties by the Company. For details on related partytransactions members may refer to the notes to the standalone financial statement.

For and on behalf of the Board
Date: May 17 2019 Viral P Desai Dr. Pradip K Desai
Place: Surat Managing Director Non Executive Director
DIN : 00029219 DIN : 00026451

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