Shubham Polyspin Ltd Directors Report.

To

The Members

SHUBHAM POLYSPIN LIMITED

Your Directors have pleasure in presenting their 7th Annual Report together with Audited Balance Sheet as on 31st March, 2019 together with Profit & Loss Statement for the year ended on that date.

FINANCIAL PERFORMANCE:

The brief financial results are as under:

(Amount in Rs.)
Particulars 2018-19 2017-18
Profit before Depreciation, Interest and Tax 3,12,37,831 3,21,32,223
Less: Depreciation 1,23,44,258 89,65,981
Profit before Interest and Tax 1,88,93,573 2,31,66,242
Less: Interest 99,19,160 54,86,809
Less: Prior period adjustments - -
Profit before tax 89,74,413 1,76,79,433
Less : Tax Expense
Current Tax: 17,29,346 33,68,816
Deferred Tax Liabilities / (Assets) (6,85,495) 54,05,223
Short/(Excess) Provision of IT 2,46,516 42,549
Mat Credit 2017-18 (68,951) (19,58,981)
Mat Credit of Previous Year 3,69,994 (19,50,850)
Profit after tax 73,96,878 1,27,72,676

During the year, the total income for the year increased to Rs. 37,40,17,694/- as compared to Rs. 27,70,70,396/- in the previous year. Profit before tax during the year has decreased to Rs. 89,74,413/- as compared to Rs. 1,76,79,433/- during the previous year.

SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:

The Company does not have any Subsidiary Company or Joint Venture Company or Associate Company.

MATERIAL CHANGES AND COMMITMENT:

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of the report.

REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:

During the year, the financial statement or report was not revised. Hence further details are not applicable.

DIVIDEND:

In order to conserve resources, your Directors express their inability to declare any dividend.

UTILISATION OF ISSUE PROCEEDS:

The Company came out with public issue of 15,00,000 Equity shares of Rs. 10/- each for cash at a price of Rs. 40/- per Equity Share including a premium of Rs. 30/- per Equity Share aggregating to Rs. 600 Lakh ("Public Issue") vide Prospectus dated 18th September, 2018 ("offer document"). The equity shares of the Company were listed on the SME Platform of BSE on 12th October, 2018.

The Company has fully deployed the entire funds of Rs. 6 Crores received through the public offer as per the objects of the issue. The following table gives details of projected and actual utilization of funds:

Category Wise Variation Projected Utilization of Funds Actual Utilization of Funds
(as per offer document)
Modernization of Plant and Machineries, Building and Electrification 172.35 172.35
Working Capital Requirements 270.00 270.00
General Corporate Purpose 70.00 70.00
Expenses for developing of New Products 7.41 7.41
Total 519.76 519.76

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 Mr. Akshay A. Somani (DIN: 05244214), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself to be re-appointed as Director of the Company.

The Board recommends the re-appointment of Mr. Akshay A. Somani (DIN: 05244214) as Director of the Company liable to retire by rotation.

Ms. Meenakshi Soni was appointed and Ms. Harprit B. Saini ceased as Company Secretary of the Company w.e.f. 1st January, 2019.

COMPLIANCE OF SECRETARIAL STANDARDS:

Company has complied with the both Secretarial Standard-1 Meeting of Board of Directors and Secretarial Standard-2 General Meetings.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed: 1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; 2. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company 3. that 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; 4. that the Directors had prepared the annual accounts on a going concern basis; and 5. that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROL:

The Board of Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board shall carry out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of Audit and Nomination & Remuneration Committees based on the criteria and framework adopted by the Board.

NUMBER OF MEETINGS OF BOARD:

The Board of Directors duly met 11 (Eleven) times.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary Declaration from each Independent Director/s under section 149(7) of the Companies Act, 2013 that they 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.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEE STOCK OPTION SCHEME:

During the year the Company has not issued any equity shares with differential voting rights or sweat equity shares or employee stock option scheme. Hence disclosure regarding the same is not given.

AUDITORS & AUDITORS REPORT:

M/s. Jain P. C. & Associates, Chartered Accountants, the existing auditors of the Company were appointed as auditors of the Company at the 4th AGM for holding the office from the conclusion of that 4th AGM till the conclusion of the 9th AGM.

In view of the Companies (Amendment) Act, 2017, the first proviso in sub-section (1) in section 139 of the Companies Act, 2013 has been omitted with effect from 7th May, 2018. In view of this, the said appointment of auditor is no longer required to be ratified by the members at every annual general meeting.

AUDITORS REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The observations comments and notes of Auditor are self explanatory and do not call for any further explanation /clarification.

COST AUDITORS AND COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013, the maintenance of Cost records has not been specified to the Company. Hence disclosure regarding the same is not given.

SECRETARIAL AUDIT:

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. Manoj Hurkat & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as

"Annexure - 1". AUDIT COMMITTEE:

The Audit Committee consists of the following Directors:
1. Mr. Kush Kalaria Chairperson
2. Mr. Urva P. Patel Member
3. Mr. Ankit A. Somani Member
NOMINATION & REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee consists of the following Directors:
1. Mr. Kush Kalaria Chairperson
2. Mr. Urva P. Patel Member
3. Mr. Anil D. Somani Member
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee consists of the following Directors:
1. Mr. Urva P. Patel Chairperson
2. Mr. Kush Kalaria Member
3. Mr. Anil D. Somani Member

RISK MANAGEMENT POLICY/PLAN:

It may please be noted that as per the applicable requirement of Companies Act, 2013 a risk management policy/plan of the Company is developed and implemented for creating and protecting the Shareholders value by minimizing threats or losses and to identify and provide a framework that enables future activities of a Company to take place in a consistent and controlled manner.

VIGIL MECHANISM:

The Company has a vigil mechanism for its directors and employees, to deal with instance of fraud/ mismanagement, if any and to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The details of the policy are posted on the website of the Company.

CODE OF BUSINESS CONDUCT AND ETHICS:

The Company has laid down a Code of Conduct (COC) which is applicable to all the Board members and Senior Management of the Company. The COC is available on the website of the Company sppl.shubhamgrp.co. All the members of the Board and Senior Management have affirmed compliance with the Code.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment measures in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, there were no complaints received under the said act. The Company has complied with the applicable provisions of the Act including the constitution of internal complaints committee.

CSR COMMITTEE:

As the requirement of CSR Committee is not applicable to the Company, further disclosure/details are not given.

REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Companys shareholders may refer the Companys website for the detailed Nomination & Remuneration Policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a Director; and other matters provided under sub-section (3) of section 178.

The Companys remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.

ANALYSIS OF REMUNERATION:

The details of remuneration paid to Directors and Key Managerial Personnel is given in extract of Annual Return attached with this report.

Disclosure/details pursuant to provisions of Section 197(12) of the Companies Act 2013 read with Companies (appointment and Remuneration of managerial personnel) Rules, 2014 are given as follows:

Names and Positions [A] Ratio of Directors Remuneration to the median Remuneration of Employees [B] Percentage (%)increase in Remuneration
Mr. Anil D. Somani (Chairperson & Managing Director 6.62% N.A.
Mr. Ankit A Somani (Managing Director) 16.69%
Mr. Akshay A. Somani (Director & CFO) 12.02% N.A.
Ms. Meenakshi Soni (CS) 0.53% N.A.

The median remuneration of employees of the Company during the financial year was Rs. 165043/- p.a.

[C] Percentage increase in the median 7.41%
Remuneration of Employees
[D] Number of permanent Employees on the rolls of Company 38 (Thirty Eight)
[E] Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof The average salary of Employees during the year 2018-19 was increase by 17.86%. There was decrease of 8.84% in the remuneration of Mr. Ankit A. Somani, Managing Director of the Company in the year 2018-19 in comparison to year 2017-18. Mr. Anil D. Somani was appointed as CMD, Mr. Akshay A. Somani was appointed as Director & CFO and Ms. Meenakshi Soni was appointed as CS during the year 2018-19.

PARTICULARS OF EMPLOYEES:

The statement showing the names of the top ten employees in terms of remuneration drawn is given as "Annexure – 2".

There are no employees of the Company drawing remuneration requiring disclosure of information under Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

DETAILS OF THE REMUNERATION TO MD/WTD (AS PER CLAUSE-IV OF SECTION-II OF PART-II OF SCHEDULE V):

(i) All elements of the remuneration package such as salary, benefits, bonuses, stock options and pension: The details are given in clause- VI (A) of MGT-9 attached to this report as Annexure - 3.

(ii) Details of fixed component and performance-linked incentives, along with the performance criteria:

The details are given in clause- VI (A) of MGT-9 attached to this report as Annexure – 3 and performance criteria is linked with net profit of the Company.

(iii) Service contracts, notice period and severance fees:

Term valid till 22nd November, 2021. Notice period is 6 month on either side or the Company paying 6 months remuneration in lieu of such notice and no severance fees.

(iv) Stock option details, if any, and whether these have been issued at a discount, as well as the period over which they accrued and how they are exercisable: The Company has not granted any stock option.

DETAILS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of energy
(i) the steps taken or impact on conservation of energy The activities carried out by the Company are not power intensive.
(ii) the steps taken by the company for utilizing alternate sources of energy The Company is not utilizing alternate sources of energy.
(iii) the capital investment on energy conservation equipments NIL
(B) Technology absorption
(i) the efforts made towards technology absorption NIL
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution NIL
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) The Company has not imported any technology during the year. Hence, there are no details to be furnished under any of the sub clauses of this clause.
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
(iv) the expenditure incurred on Research and Development There are no expenditure incurred on Research and Development by the Company.
(C) Foreign exchange earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and Rs. 5,99,44,431.36/-
The Foreign Exchange outgo during the year in terms of actual outflows Rs. 61,452.75/-

DEPOSITS:

During the year under report, your Company has not accepted any deposits pursuant to Section 73 of the Companies Act, 2013. Hence further details are not given.

Details of money accepted (if any during the year) by the Company from the Directors and/or the relatives of Directors of the Company are given in the notes to the Financial Statements and the same are not deposit as per the applicable provisions of Companies Act, 2013 and rules made thereunder.

CORPORATE GOVERNANCE:

It may please be noted that as our Company is not falling in the applicability criteria prescribed in Regulation 27 (2), Corporate Governance Report is not applicable to the Company. Hence, the Report on Corporate Governance is not forming part of the Directors Report.

EXTRACT OF ANNUAL RETURN:

Details are as per "Annexure – 3" attached.

RELATED PARTY TRANSACTION:

All the transactions / contracts entered into by the Company during the financial year under report with Related Parties were in the ordinary course of business and on an arm lengths basis. There are no material transactions required to be disclosed in Form No. AOC-2. The related party transactions are entered into due to business exigencies.

PARTICULARS OF LOANS, INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

There are no Loans, Investments or Guarantees /Security given by the Company during the year under section 186 of the Companies Act, 2013; hence no particulars are required to be given.

MANAGEMENT DISCUSSION AND ANALYSIS:

Necessary Management Discussion and Analysis Report, pursuant to Regulation 34(2)(e) of The SEBI (LODR) Regulations, 2015 is appended as "Annexure - 4" to Directors Report.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their sincere appreciation to the Customers, Employees, Suppliers, Professionals, and Bankers to the Company for their Cooperation and contribution in the affairs of the Company.

For and on behalf of Board
Sd/-
Place : Borisana Anil D. Somani
Date : 30th May, 2019 (DIN: 06373210)
Chairperson & Managing Director