TO THE MEMBERS
Your Directors have pleasure in presenting the 56th Annua) Report together
with the Audited Accounts of the Company for the financial year ended March 31,2017.
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 dividend
on Equity Shares @ 10% i.e, Re. 1/- per Equity Share of the
face value of 10/- each. The proposal is subject to the approval of shareholders at the
ensuing 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 name
appears in the Register of Members/ Beneficial Owners as stated in Notice of the ensuing
AGM.
OPERATIONAL REVIEW
During the year under review, the Company recorded profit after tax of Rs. 1804.44
Lakhs for the year ended 31st March, 2017 as compared to Rs. 2727.61 Lakhs for
the previous year.
The total assets of the Company stood at Rs, 3,34,57.94 Lakhs as against Rs, 3,17,56.64
Lakhs in the last year.
APPROPRIATIONS
The Company proposes to transfer of Rs. 3,63 Lakhs (previous year Rs. 550 lakhs) to
Special 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 the
public during the year under review and shall not accept any deposits from the public
without obtaining prior approval of the Reserve Bank of India.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statement of the Company and its Associate Companies are
prepared in accordance with the provisions of the Companies Act, 2013 (the Act) and
applicable accounting standards along with all the relevant documents and the Auditors
Report thereon forms the part of this Annual Report. The Consolidated Financial Statement
of 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 the
financial period 2016- 17 as it is not applicable for the Company; since NBFC Companies
are 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 dated
May 30, 2012 & April 17, 2015 and after a prolonged discussion, the Board of Directors
of the Company thought it prudent to get the equity shares of the Company listed on the
nationwide trading platform of BSE Limited in order to enhance the value of the
Shareholders and persevere the status of listing of the equity shares of the
Company."
SHARE CAPITAL
During the year under review the Company, there is no change in the share capital of
the Company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control procedures commensurate with its size and
nature of business. The objective of these procedures is to ensure efficient use and
protection of the Companys resources, accuracy in financial reporting and due compliance
of statutes and corporate policies and procedures.
Internal Audit is conducted periodically by the Internal Auditor who verifies and
reports on the efficiency and effectiveness of internal controls. The adequacy of internal
control systems are reviewed by the Audit Committee of the Board in its periodical
meetings.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a comprehensive Internal Financial Control system commensurate with the
size, scale and complexity of its operations. The system encompasses the major processes
to ensure reliability of financial reporting, compliances with policies, procedures, laws,
regulations, safeguarding of assets and efficient use of resources.
The policies and procedures adopted by the company ensures the orderly and efficient
conduct of its business and adherence to the Companys policies, prevention and detection
of frauds and errors, accuracy and completeness of records and the timely preparation of
reliable financial information.
The Internal Auditor continuously monitors the efficiency of Internal Financial Control
system with the objective of providing to the Audit Committee and the Board of Directors,
an independent, objective and reasonable assurance on the adequacy and effectiveness of
the organizations risk management with regard to the Internal Financial Control system.
The Audit Committee meets regularly to review reports submitted by the Internal
Auditor. The Audit Committee also consults with the Companys Statutory Auditors to
ascertain their views on the financial statements, including the financial reporting
system 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 with
other companies during the financial year 2016-17. Details of such Associate Companies are
given 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 required
under section 92 of the Companies Act, 2013 is marked as (Annexure B) which is annexed
hereto 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 there
under, the term of office of M/s. Narendra & Kochar & Co., Chartered Accountants,
Kolkata (Firm Registration NO.315201E) as Statutory Auditors of the Company will expire at
the ensuing Annual General Meeting of the Company.
The Board place on record its appreciation for the services rendered by M/s Narendra
Kochar & Co., as the Statutory Auditors of the Company.
In accordance with the provisions of section 139 of the Companies Act, 2013 read with
the Rules framed there under and on the recommendation of the Audit Committee, the Board
of Directors of the Company proposed to appoint M/s. Bahety & Goenka, Chartered
Accountants (Firm Registration No.3l711E) as the Statutory Auditors of the Company who
shall hold the office as Statutory Auditors of the Company from the conclusion of ensuing
56th Annual General Meeting(AGM) of the Company for a term of five consecutive
years till the conclusion of 61th Annual General Meeting, subject to
ratification by members at every AGM. The appointment of M/s Bahety & Goenka,
Chartered Accountants, as the Statutory Auditors of the Company is placed before the
members 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 the
Company has received a written consent from M/s Bahety & Goenka, Chartered Accountants
for their appointment and a certificate ,to the effect that their appointment, if made,
would be in accordance with the Companies Act, 2013 and the Rules framed there under and
that they satisfy the criteria provided in section 141 of the Companies Act, 2013 read
with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and that they are not
disqualified for appointment.
The Members are requested to consider the appointment of statutory as aforesaid and fix
their remuneration.
The Auditors Report on the Financial Statement for the year ended 31st
March, 2017 is unmodified i.e. it does not contain any qualification, reservation or
adverse 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 has
appointed M/s J. Patnaik & Associates, Practicing Company Secretaries (Certificate of
Practice No.3102), Kolkata as Secretarial Auditor to conduct the Secretarial Audit for the
financial year ended 31st March, 2017. The Secretarial Audit Report for the
financial ended 31st March, 2017 is appended to this Report as Annexure C.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark. INFORMATION PURSUANT TO SEC 134(3)(m) OF THE COMPANIES ACT, 2013 Being an
Investment 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 Kumar
Dugar, Managing Director, Sri Rishabh Dugar, Chief Financial Officer and Smt Jyoti Bhartia
, Company Secretary were identified and appointed as Key Managerial Personnel of the
Company.
As per the provisions of the Companies Act, 2013, Mr. Kamal Kumar Dugar retires by
rotation 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 Smt
Jyoti 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 an
woman director in casual Vacancy with effect from 01.10.2016. Who had expressed her
willingness to act as the Woman Director of the Company pursuant to Section 161 of the
Companies Act, 2013 and has not been disqualified to act as a Director under section 164
of 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 the
approval from the members of the Company, reappointed Sri Ajit Kumar Bachhawat as an
Independent Director of the Company in its meeting held on 30.03.2017 with effect from
01.04.2017 for a period of five years who has expressed his willingness to act as an
Independent Director of the Company pursuant to section 149,152 read with Schedule IV and
all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment
and Qualification of Directors) Rules,
2014 and who has submitted a declaration that he meets the criteria for independence as
provided in Section 149(6) of the Companies Act, 2013 and whose period of appointment
shall not be liable to retire by rotation.
Mr. Surendra Kumar Dugar was appointed as Managing Director of the Company for a term
of three years commencing from 22.09.2014 to 21.09.2017. He is working with the Company
for a long period of time. He has enormous experience and knowledge in the affairs of the
Company. The Company has achieved notable growth during his tenure as Managing director.
Therefore on the recommendation of Nomination and Remuneration Committee, the Board of
Directors 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 under
Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence
laid down in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure 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 Directors
was held to review the performance of the Non-Independent Directors and the Board as a
whole. Accordingly, a meeting of Independent Directors was held on 13th
February, 2017 wherein the performance of the Non-Independent Directors and the Board as a
whole was evaluated.
Further the same was discussed in the Board meeting that followed the meeting of the
Independent Directors, at which the performance of the Board, its committees and
individual Directors was also discussed. Performance evaluation of Independent Directors
was 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 divided
into 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 and
vision, team spirit and consensus building, effective leadership, domain knowledge,
management qualities, teamwork abilities, result/achievements, understanding and
awareness, motivation/commitment/diligence, integrity/ethics/values and
openness/receptivity.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the financial year
2016-17 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 there
under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is
implemented through the Companys Whistle Blower Policy to enable the Directors, employees
and all Stakeholders of the Company to report genuine concerns, to provide for adequate
safeguards against victimization of persons who use such mechanism and make provision for
direct access to the Chairman of the Audit Committee. The Vigil Mechanism/Whistle Blower
Policy has also been uploaded on the website of the Company and may be accessed at the
link http://www.santoshindustrleslimited.in.
SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance towards sexual harassment at the workplace and has
adopted a Policy for Prevention of Sexual Harassment to prohibit, prevent or deter any
acts of sexual harassment at workplace and to provide the procedure for the redressal of
complaints pertaining to sexual harassment, thereby providing a safe and healthy work
environment, in line with the provisions of Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 and the rules there under. During the
year 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 and
under SEBI (Listing Obligations and Requirements) Regulations, 2015, the Board of
Directors of the Company based on the recommendation of the Nomination and Remuneration
Committee has formulated a Nomination & Remuneration Policy,
The Nomination & Remuneration Policy of the Company inter alia includes the
objectives, principles of remuneration, guidelines for remuneration to Executive Directors
and KMPs and Non- Executive Directors, criteria for identification, selection and
appointment 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 determining
qualification, positive attributes, independence etc. are summarily given hereunder:
• The Board member shall possess appropriate skills, qualification,
characteristics and experience. The object is to have a Board with diverse background and
experience in business, government, academics, technology, social responsibilities,
finance, law etc. and in such other areas as may be considered relevant or desirable to
conduct the Companys business in a holistic manner,
• Independent Director shall be person of integrity and possess expertise and
experience and/or someone who the Committee/Board believes could contribute to the
growth/philosophy/strategy of the Company.
• In evaluating the suitability of individual Board Members, the Committee take
Into account many factors, including general understanding of the Companys business
dynamics, social perspective, educational and professional background and personal
achievements.
• Director should possess high level of personal and professional ethics,
integrity and values and he must be willing to devote sufficient time and energy in
carrying out their duties and responsibilities effectively. He must have the aptitude to
critically evaluate managements working as part of a team in an environment of
collegiality and trust.
• The Committee evaluates each individual with the objective of having a group
that best enables the success of the Companys business and achieves its objectives.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties during the year under review were on an
arms length basis and in the ordinary course of business and the provisions of Section
188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not
required.
Further, there are no materially significant related party transactions during the year
under review made by the Company with Promoters, Directors, Key Managerial Personnel or
other designated persons which may have a potential conflict with the interest of the
Company at large.
The Board of Directors of the Company has, on the recommendation of the Audit
Committee, adopted a policy to regulate the transactions between the Company and its
Related Parties, in compliance with the applicable provisions of the Companies Act, 2013,
the Rules there under and the
Listing Agreement. This policy was considered and approved by the Board and has been
uploaded on the Companys website and may be accessed at the link
http://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 or
securities provided or acquisition of securities in the ordinary course of its business by
non-banking financial companies are exempted. Therefore no such disclosure in this regard
is 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 ended
31st March 2017. None of the employees of the Company was in receipt of remuneration for
that year which in the aggregate, was not less than Rs. 60,00,000/- p.a,
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required 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 is marked as Annexure D which is annexed
hereto and forms part of the Director Report.
RISK MANAGEMENT
Risk Management is the process of identification, assessment, and prioritization of
risks followed by co-ordinated efforts to minimize, monitor and mitigate/control the
probability and/or Impact of unfortunate events or to maximize the realization of
opportunities. Since your Company is a NBFC Company, the Risk Management Process is also
focused towards better management of the affairs of the Company and to bring about
transparency in the transaction and to ensure that there is no bad Investment in
securities and loans.
In this regard a Risk Management Committee has been constituted by the Board of
Directors of the Company consisting of three members, two of whom are independent
directors.
The Risk Management Committee conducts quarterly review of all Loan & Investment
proposals and make recommendations to the Board. The guidelines in respect of Risk
Management have been laid down by the Risk Management Committee in respect of Loans &
Investments.
The Risk Management Policy has been uploaded or the Companys website and may be
accessed 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 Directors
of your Company confirm that:
i) in the preparation of the annual accounts for the year ended March 31, 2017, the
applicable accounting standards have been followed along with proper explanation relating
to material departures;
ii) the directors had selected such accounting policies and applied them consistently
and make judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affair of the company at the end of the financial year ended 31st
March 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 adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
iv) the directors had prepared annual accounts for the year ended 31st
March, 2017 on a going concern basis;
v) the directors had laid down internal financial controls to be followed by the
Company and such internal financial controls were adequate and were operating effectively;
and
vi) the directors had devised proper systems to ensure compliance with the provisions
of 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 Companys business
activities Your Company is a responsible corporate citizen, supporting activities related
to 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 policy
which is available at http:// www.santoshindustrieslimited.in
The Annual Report on CSR expenditures for the financial year 2016-17 is annexed
herewith and forms part of this report (Annexure E),
CORPORATE GOVERNANCE
Your Company complies with the provisions laid down in Corporate Governance laws. It
believes in and practices good corporate governance. The Company maintains transparency
and also enhances corporate accountability. A report on Corporate Governance along with a
Certificate from the Auditors of the Company regarding the compliance with the conditions
of Corporate Governance as stipulated under regulation 34 read with Schedule V of the SEBI
(Listing Obligations and Disclosure RequirementsRegulations, 2015 forms part of this
Annual Report.
ACKNOWLEDGEMENT
Your Directors wish to place records their sincere appreciation to the Bankers of the
Company, Companys customers, vendors and investors for their continued support during the
year.
The directors also wish to place their appreciation for the dedication and contribution
made 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 |
|
+91-9892691696
