Spenta International Ltd Directors Report.

To,

The Members,

SPENTA INTERNATIONAL LIMITED.

Your Directors have great pleasure in presenting 33rd Annual Report along with the Audited Balance Sheet and Profit and

Loss Account, for the year ended 31st March, 2020.

1. FINANCIAL RESULTS:

(Rs. in Lacs)

Particulars
Year ended 2019-20 Year ended 2018-19
Total Income (including Other Income) 3654.42 4460.67
Gross Profit (before Interest, Depreciation and tax) 447.46 637.31
Less: Interest 169.26 199.80
: Depreciation 114.41 116.58
: Provision for taxation - Current 40.00 80.00
- Deferred 4.62 15.35
Net Profit after tax 119.17 225.58
Less: Other Comprehensive Income 4.58 3.50
Total Comprehensive Income for the period 114.59 222.08

2 . DIVIDEND AND TRANSFER TO RESERVES:

Your Directors are pleased to recommend a final Dividend of Rs. 0.80 per equity share of the face value of Rs. 10/- each for the approval of the shareholders.

The dividend, if approved by the shareholders at the forthcoming Annual General Meeting will absorb Rs. 22.11/- lacs.

No amount is being transferred to reserves during the year under review.

3. FUTURE PROSPECTS :

Company is in the process of optimising production on all the existing machines by manufacturing optimal product mix. Using better quality yarns and doing product innovation by using different finishes, which will enhance the overall quality and help to improve our margins.

4. THE CHANGE IN THE NATURE OF BUSINESS, IF ANY;

There is no change in the nature of business of the Company.

5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

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

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During period under review, following changes took place in the Board Composition.

Mrs. Sunita Misri continued as Non-Executive independent Director of the Company till 12th August, 2019 but she could not offer herself for the second term of Independent Director, however she continued to hold position of Non-Executive Non-Independent Director in the Company.

7. CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS.

As required under Regulation 34 of the Listing Regulations, a Cash Flow Statement and consolidated Financial Statement is part of the Annual Report.

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND.

There was no transfer during the year to the Investor Education and Protection Fund in terms of Section 125 of the Companies Act, 2013.

9. NUMBER OF BOARD MEETINGS:

During the financial year, the Board had met Nine times on 2nd May, 2019, 20th May, 2019, 30th May, 2019, 14th August, 2019, 30th September, 2019, 24th October, 2019, 7th November, 2019, 26th December, 2019 and 14th February, 2020.

The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

10. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS, THEIR APPOINTMENT AND REMUNERATION.

The Nomination & Remuneration Committee of Directors have approved a Policy for Selection, Appointment and Remuneration of Directors which inter-alia requires that composition and remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and senior management employees and the Directors appointed shall be of high integrity with relevant expertise and experience so as to have diverse Board and the Policy also lays down the positive attributes/criteria while recommending the candidature for the appointment as Director. The policy on Companys Remuneration and Nomination is posted on Companys website at http://www.spentasocks.com/

During the year under review, no Independent Director of the Company was resigned. Mrs. Sunita Misri continued as Non-Executive independent Director of the Company till 12th August, 2019 but she could not offer herself for the second term of Independent Directorship, however she continued to hold position of Non-Executive Non-Independent Director in the Company.

11. DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

12. MEETING OF INDEPENDENT DIRECTORS:

The Independent Directors met once during the year on 14th February, 2020 to review the working of the Company, its Board and Committees. The meeting decided on the process of evaluation of the Board and Audit Committee. It designed the questionnaire on limited parameters and completed the evaluation of the Board by Non-Executive Directors and of the Audit committee by other members of the Board. The same was compiled by Independent authority and informed to the members.

13. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The familiarization program aims to provide Independent Directors with the Other Apparels & Accessories industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner. The familiarization program also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The policy on Companys familiarization program for Independent Directors is posted on Companys website at http://www.spentasocks.com/

14. INTERNAL CONTROL SYSTEM:

The Companys internal controls system has been established on values of integrity and operational excellence and it supports the vision of the Company "To be the most sustainable and competitive Company in our industry". The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors and their significant audit observations and follow up actions thereon are reported to the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

15. DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors hereby confirms:

i) That in the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures.

ii) That the Directors have 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 at the end of the financial year and of the Profit or Loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenances of adequate accounting records in accordance with the provision of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Annual accounts on a going concern basis.

v) That the 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.

vi) 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.

16. SUBSIDIARIES AND ASSOCIATE COMPANYS:

As on 31st March, 2020, Company has no subsidiaries and associate companies.

17. DEPOSITS:

Your Company did not accept any deposits from the public during the year. There are no deposits which have not been claimed by depositors or paid by the Company after the date on which the deposit became due for repayment or renewal, as the case may be, according to the contract with the depositors & there are no total amounts due to the depositors & remaining unclaimed or unpaid.

18. APPOINTMENT OF AUDITORS:

a) INTERNAL AUDITORS

As per section 138 of the Companies Act, 2013, the Company has appointed M/s. B. G. Dolar & Co., internal auditors for the year 2019-2020 to conduct the internal audit and to ensure adequacy of the Internal controls, adherence to Companys policies and ensure statutory and other compliance through, periodical checks and internal audit.

b) STATUTORY AUDITORS:

M/s. A K Kochar & Associates, Chartered Accountants (FRN: 120410W) appointed as Statutory Auditors of the Company in the Annual General Meeting held on 30th September, 2019 to hold office till the conclusion of the of Thirty-Seven Annual General Meeting. Further, they have confirmed that they are not disqualified for re-appointment as auditors of the Company under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules or regulations made thereunder.

Auditors report is self-explanatory and therefore does not require further comments and explanation.

c) SECRETARIAL AUDITORS

The Board has appointed HS Associates, Practicing Company Secretaries as the Secretarial Auditor of the Company for the financial year 2020-2021.

The secretarial Audit report (MR-3) of M/s. HS Associates for the period 2019-20 is annexed herewith as Annexure-D.

d) COST AUDITORS:

As per Section 148 read with Companies (Audit & Auditors) Rules, applicable to cost auditors, the company was not liable to appoint Cost auditors for the financial year 2019-20.

19. COMMENTS OF THE BOARD ON AUDITORS REPORT:

a) Observations of Statutory Auditors on Accounts for the year ended 31st March, 2020: There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in respect of financial statements as on and for the year ended 31st March, 2020.

b) Observations of Secretarial Audit Report for the year ended 31st March, 2020:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from a Practicing Company Secretary. M/s. HS Associates, Practicing Company Secretaries were appointed to conduct Secretarial Audit and issue Report for the financial year 2019-20.

Secretarial Audit Report issued by M/s. HS Associates, Practicing Company Secretaries in Form MR-3 for the financial year 2019-20 forms part of this report. The Secretarial Audit Report is annexed herewith as Annexure - D.

In respect of the observations made in the Secretarial Audit report, following are the explanations and comments offered by the Board. i. During the year, the Board has not appointed a Whole time Company Secretary as per Section 203 of Companies Act, 2013 read with Reg 6(1) of SEBI (LODR), 2015 due to which the Financial statements for the year ended 31st March, 2019 were not signed by Company Secretary. The Company is under process to pay BSE Penalty of Rs. 1,19,180/- for Non-Compliance of Reg 6(1) of SEBI (LODR), 2015. However, as on the date of this report Company has not paid the said penalty.

? The Company has interviewed a Qualified Company Secretary and offered him the position of Company Secretary & Compliance Officer. He is expected to join from first week of July, 2020. ii. Due to improper composition of Board, the provisions of regulation 17, Regulation 18 & Regulation 19 of LODR, 2015 read with Section 177 and 178 of the Companies Act, 2013 are not complied.

? The Board is identifying an Independent Directors in order to comply with the necessary provisions of Composition of the Board and Committees.

20. VIGIL MECHANISM POLICY/ WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee.

The said Policy is available on the website of the Company at http://www.spentasocks.com/

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

21. REPORTING OF FRAUD BY AUDITORS

During the year under review, the Statutory Auditors, and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Act, details of which needs to be mentioned in this Report.

22. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3) (a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company as at March 31, 2020 is uploaded on the website of the Company and can be accessed at http://www.spentasocks.com/

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, is appended as Annexure B.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Related Party Transactions Policy as approved by the Board is uploaded on the Companys website at www.spentasocks.com.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

Details of Loans granted, Guarantees given or Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

25. CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

Information on conservation of energy, technology absorption, foreign exchange earnings and out go, is required to be given pursuant to provision of Section 134 of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed hereto marked as Annexure-A and forms part of this report.

26. CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of Practising Company Secretary regarding compliance of the Conditions of Corporate Governance as stipulated in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges, are enclosed as a separate section and forms part of this report marked as Annexure E.

27. PARTICULARS OF EMPLOYEES:

During the financial year there were no employees drawing salary exceeding Rs. 5 Lacs. The information pursuant to Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 relating to median employees remuneration is annexed hereto marked as Annexure-C and forms part of this report.

28. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

The Managements Discussion and Analysis Report for the year under review, as stipulated under regulation 34 (3) and Part B of schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015, is annexed hereto marked Annexure-F and forms part of this report.

29. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that the Company has complied with the necessary provisions of the revised Secretarial Standard 1 and Secretarial Standard 2 to the extent applicable to the Company.

30. RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives and thus in pursuance of the same it has formulated a Risk Management Policy to ensure compliance with regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Major risks identified by the businesses and functions are systematically addressed and also discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Significant audit observations and follow up actions thereon are reported to the Audit Committee and the risk management policy is available on the website of the company: www.spentasocks.com.

31. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the year there has been no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and companys operations in future.

32. ENHANCING SHAREHOLDER VALUE

Your company firmly believes that its success, the marketplace and a good reputation are among the primary determinants of value to the shareholder. The organizational vision is founded on the principles of good governance and delivering leading-edge products backed with dependable after sales services.

33. CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operation include global and domestic demand and supply conditions affecting selling prices of Raw Materials, Finished Goods, input availability and prices, changes in government regulations, tax laws, economic developments within and outside the country and various other factors. The current Covid 19 pandemic has also affected the operations of the Company.

The Managements Discussion and Analysis Report for the year under review, as stipulated under regulation 34 (3) and Part B of schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015, is annexed to this report. (Annexure F)

34. ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS HAS

BEEN MADE.

During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

35. COMMITTEES OF THE BOARD:

During the year, in accordance with the Companies Act, 2013, the Board re-constituted

some of its Committees. There are currently three Committees of the Board, as follows:

Audit Committee

Nomination and Remuneration Committee

Stakeholders Relationship Committee

36. DISCLOSURE UNDER SEXUAL HARASSMENT ACT:

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints, redressal for the benefits of its employees. Currently there are 10 women employees working with the Company and a senior women employee has been designated to receive complaints and report such cases to the Audit Committee in this behalf. There were no complaints filed by any of the women employees of the Company under this Act.

37. OTHER DISCLOSURES

The company does not have any Employees Stock Option Scheme in force and hence particulars are not furnished, as the same are not applicable.

38. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the support which the Company has received from its promoters, lenders, business associates including distributors, vendors and customers, the press and the employees of the Company.

BY ORDER OF THE BOARD

Sd/-SANJAY GADODIA

(CHAIRMAN) DIN NO: 00203433

DATE: 30th June, 2020

PLACE: PALGHAR

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134 OF THE COMPANIES ACT , 2013 READ WITH THE COMPANIES (ACC OUNTS) RULES, 2014

A. CONSERVATION OF ENERGY

i. The steps taken or impact on conservation of energy :

Maintained the power factor in the range of 0.998 to 0.999 throughout the year and got rebate in electricity bills

By replacing to energy conservation equipment like air compressor, dryer, and motors for better consumption of electricity.

ii. The steps taken by the company for utilizing alternate sources of energy We are in talks for installation solar panels and using solar energy to reduce our electricity consumption.

iii. The capital investment on energy conservation equipments. - NIL

B. TECHNOLOGY ABSORPTION

i. the efforts made towards technology absorption :

a. Installation of ETP plant for treatment and conservation of waste water

b. Installation of Metal Detectors in Finishing Line to detect metal contamination in socks

c. In house repair of electronic parts in the Knitting machine, thus eliminating need to import spare parts frequently

ii. the benefits derived like product improvement, cost reduction, product development or import substitution :

1. Improved safety measures and pollution control

2. Quality and productivity improvement

3. Cost Reduction

iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a. the details of technology imported - NIL

b. the year of import - NIL

c. whether the technology been fully absorbed - NIL

d. if not fully absorbed, areas where absorption has not taken place, and the reasons thereof - NIL

iv. the expenditure incurred on Research and Development Non Ascertainable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs. in lacs)

31/03/2020 31/03/2019
Foreign Exchange Earnings: NIL NIL
Foreign Exchange outgo: - -
Travelling 9.91 4.54
Advances for Spares and Consummables 0.00 0.00
Plant and Machinery 0.00 71.65
Spares & Consumables 0.00 3.73

Form A : Disclosure of Particulars with respect to Conservation of Energy

A. POWER & FUEL CONSUMPTION

31.3.2020 31.3.2019
Electricity
a) Purchased
Units (in lacs) (in kwh) 12.48 16.12
Amount in Rupees (in lacs) 128.81 155.08
Rate per Unit (in rupees) 10.32 9.62

B. CONSUMPTION PER UNIT OF PRODUCTION

31.3.2020 31.3.2019

Number of pairs

Product: Knitted Socks 32,24,394 42,55,292
Electricity (kwh/pair of socks) 0.387 0.379

Annexure - B

FORM NO. AOC - 2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies(Accounts) Rules, 2014]

Form for disclosure of particulars of contracts / arrangements entered into by the Company with the related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms-length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arms length basis:

Sr. No Name of the Related Party & Nature of Relationship Nature of contracts/ arrange- ments/trans actions Duration of the contracts/ arrange- ments/ transactions Salient terms of the contracts or arrangements or transactions including the value, if any Justification for entering into such contracts or arrange- ments 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 required under first proviso to section 188
NIL NIL NIL NIL NIL NIL NIL NIL

2. Details of contracts or arrangements or transactions at arms length basis:

Name of the Related Party & Nature of Relationship Nature of contracts/ arrangements/ transactions Duration of the contracts/ arrangements/ transactions Salient terms of the contracts or arrangements or transactions including the value, if any Amount paid as advances, if any
NIL NIL NIL NIL NIL

Annexure - C

The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

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

Name of the directors Ratio to median Remuneration
Non-executive directors
Mrs. Sunita Misri 00.13
Mrs. Anita koti 00.13
Executive directors
Mr. Sanjay Gadodia 13.22
Mr. Danny Hansotia 13.22

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Directors, Chief Executive Officer, Chief Financial % increase in remuneration in the
Officer and Company Secretary financial year
Mr. Sanjay Gadodia*
Mr. Danny Hansotia
Mrs. Sunita Misri
Mrs. Anita Koti --

c. The percentage increase in the median remuneration of employees in the financial year: 24%

d. The number of permanent employees on the rolls of Company: 76

e. Average percentile increases 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 and point out if there are any exceptional circumstances for increase in the managerial remuneration:

There was no increase in managerial remuneration during the year under review.

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

The Nomination and Remuneration Committee of the Company has affirmed at its meeting held on February 14, 2020 that the remuneration is as per the remuneration policy of the Company. The policy is available on the companys website: www.spentasocks.com