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Directors Report of Shantai Industries Ltd.

Mar 31, 2017

BOARD OF DIRECTOR''S REPORT

To

The Members,

Shantai Industries Limited (Formerly Known as Wheel And Axle Textiles Limited)

The directors present Annual report on the business and operations of the company together with Audited Statement of Accounts of the company for the year ending 31st March 2017.

The particulars pursuant to sub section 3 of section 134 of the Companies Act, 2013 are given below.

a) The extract of annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013:

The extract of Annual Return is in format MGT-9 for the financial year ended 31/03/2017 and is enclosed as "Annexure A" with this report.

b) Number of meetings of the Board:

During the year 2016-17, 8 meetings of Board of Directors were held on 05.05.2016, 09.06.2016, 25.07.2016, 20.10.2016, 24.10.2016, 28.11.2016, 19.12.2016, 25.01.2017.

c) Director''s Responsibility Statements:

The director''s state that:

i) In the preparation of annual accounts for the financial year ended 31st March 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) 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 as at 31st March and of the profit / 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 the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The director had prepared the annual accounts on a going concern basis;

v) The director 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) The director had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ca) Details of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the central government.

Auditor has not reported any fraud under sub-section (12) of section 143 of The Companies Act, 2013.

d) A Statement on Declaration given by Independent Directors under sub-section (6) of section 149.

The independent directors have submitted declaration pursuant to Section 149(7) confirming that they meet the criteria of independence pursuant to section 149(6). The statement has been noted by Board of Directors.

e) If Company covered under sub-section (1) of section 178, company''s policy on directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and other matter provided under sub-section (3) of section 178.

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of director and key managerial personal and their remuneration. The policy is disclosed at "Annexure B" in pursuance of provision to section 178(3) of the companies Act 2013.

The Company does not pay any remuneration to the Non-Executive/Independent Directors of the company other than si ng fees for attending the meeting of the Board/Committee. Remuneration to the Managing Director is governed by the relevant provisions of the Companies Act, 2013.

f) Explanations or comments by the board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report / by the company secretary in practice in his secretarial audit report.

The statutory auditors have not made any qualifications, reservations or adverse remarks or disclaimer in the report and no explanation or comments by the board is required.

The Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013 in prescribed Form MR-3 is attached to as "Annexure C" to this report.

g) Particulars of loans, guarantees or investments under section 186 of Companies act, 2013

Company has not during the year under review (a) given any loan to any person or other body corporate (b) Given any guarantee or provide security in connection with a loan to any other body corporate or person; and (c) Acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, Exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more and hence the particulars are not required to be included in this report.

h) Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form (Form AOC-2)

The company has entered into transactions referred to in section 188(1) of The Companies Act, 2013 with related party and as such particulars in form AOC-2 are attached to this report.

FORM AOC-2

Material related party Transactions

I. Details of contract or arrangements or transactions not at arm''s length basis:

There were no contracts or arrangements or transactions entered into during the year ended 31st March, 2017 which were not at arm''s length basis

II. Details of material contracts or arrangements or transactions at arm''s length basis:

The details of material contracts or arrangements or transactions at arm''s length basis for the year ended 31st March, 2017 are as follows.

Sr.

No.

Name of the Related Party & Relationship

Nature of Transaction

Duration

Salient Terms

Amount

01

Murlibhai F. Sawlani

Director''s Remuneration

Ongoing

On arm''s length basis in ordinary course of business

2,80,000

02

Vasudev F. Sawlani

Director''s Remuneration

2,80,000

03

Harish F. Sawlani

Director''s Remuneration

2,80,000

04

Shweta C. Shah

Salary as CS

30,000

05

Shailesh J Damor

Salary as CFO

1,20,000

i) The state of Company''s affairs

There is no Material change in the state of affairs of the company particularly nature of business being carried out.

The income for the year has increased from Rs, 6,38,16,340/-in the year 2015-16 to Rs, 1,08,09,36,089.95/- in the year 2016-17. The company earned profit of Rs, 73.75 Lacs against Profit of Rs, 5.51 Lacs in previous year.

The Company has not issued any share capital or Debentures during the year. There is no change in the status of the company or the accounting year.

j) The amount, if any, which it proposes to carry to any reserves

The Directors do not propose to carry any amount to reserves.

k) The amount, if any, which it recommends should be paid by way of dividend.

The company has already paid interim dividend during the year under review. The Directors do not recommend any amount by way of final dividend.

l) Material Changes and commitments, if any, Affecting the Financial Position of the Company which have occurred between the Ends of the financial year of the company to which the financial statements relate and the date of the report.

There are no material changes and / or commitments affecting financial position of the Company occurred after end of financial year till date of this report.

m) The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in such manner as may be prescribed.

The company is engaged in trading activity and the manufacturing activity is being undertaken by way of job work, being outsourced from other parties. There is very limited scope of conservation of energy. Beside in absence of any foreign technology there is no question of absorption.

Information and details pursuant to Rule 8(3) of the companies (Accounts) Rules, 2014 with respect to above is given below.

(A) CONSERVATION OF ENERGY-

i) The steps taken or impact on conservation of energy: NIL

ii) The steps taken by the company for utilizing alternate sources of energy: NIL

iii) The capital investment on energy conservation equipments: NIL

(B) TECHNOLOGY ABSORPTION-

i) The efforts made towards technology absorption: Not Applicable

ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable

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 : Not Applicable

b. The year of import: Not Applicable

c. Whether the technology been fully absorbed: Not Applicable

d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable and

iv) The expenditure incurred on Research and Development: NIL

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO-

Foreign Exchange earned (actual inflows during the year): Rs, 94.40 Crore

Foreign Exchange outgo (actual outflows): NIL

n) A statement including development and implementation of a Risk Management Policy for the company including identification therein of elements of risk, if any, which in the opinion of the board may threaten the existence of the company;

The Directors do not foresee any risk that may threaten the existence of the company in normal course. The Directors proposes to develop and implement specific Risk Management Policy on identification of any risk.

o) The details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;

Since the net worth of the company is below Five Hundred crores, Turnover of the company is below one thousand crores, Net Profit of the company is below five crores. The provision of Section 135 of The Companies Act, 2013 is not applicable to the company and hence the company is not required undertake any corporate Social Responsibility (CSR) initiatives.

p) In case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors;

Pursuant to provision of the Companies Act, 2013 the board has carried out the annual performance evaluation of its own performance as well as the evaluation of the Audit, Nomination & Remuneration Committee.

The chairman of Board of directors and the chairman of Nomination & remuneration Committee met all the directors individually to get an overview of the functioning of the board and its constituents inter alia on the following board criteria i.e. attendance and level of participation, independence of judgment exercised by independent directors, interpersonal relationship etc.

Based on the valuable inputs received the directors are encouraged for effective role in company management. q) Such other matters as may be prescribed.

(Pursuant to rule 8(5) of The Companies (Accounts) Rules, 2014)

i) The Financial summary or highlights

The summary of financial Results (standalone) for the year under review is as:

Particulars

As on 31/03/2017

As on 31/03/2016

Turnover and other income

1081068856.22

64135472.05

Profit/Loss (-) before Financial Charges & depreciation

10973865.13

784383.47

Interest and Financial Charges

102486.32

12544.34

Profit/Loss(-) before depreciation

10871378.81

796927.81

Depreciation

28698.04

0.00

Profit /Loss(-) After Tax for the year

7375188.77

550675.81

ii) The Change in the nature of business, if any:

There is no Material change in nature of business of the company. The director however plans to change the object clause of memorandum of Association for diversifying the business in future.

iii) The Details of Directors or key managerial personnel who were appointed or have resigned during the year:

Ms. Shweta C. Shah was appointed as company secretary cum compliance officer of the company with effect from 01/02/2017 apart her there is no change in directors and Key Managerial Personnel of the company.

iv) The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year;

No company has become or ceases to be subsidiary, joint venture or associate company.

v) The details relating to deposits, covered under Chapter V of the Act,-

(a) Accepted during the year: NIL

(b) Remained unpaid or unclaimed as at the end of the year: NIL

(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved-

(i) At the beginning of the year: Not Applicable

(ii) Maximum during the year: Not Applicable

(iii) At the end of the year: Not Applicable

vi) The details of deposits which are not in compliance with the requirements of Chapter V of the Act: NIL

vii) The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future: NIL

viii) The details in respect of adequacy of internal financial controls with reference to the Financial Statements.

The company has in place adequate internal financial controls with reference to financial statements. Periodic audits are undertaken on continuous basis covering all major operation. During the year no Reportable Material weakness in the operation was observed.

Disclosures under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Sr.

No.

Requirement under Rule 5(1)

Details

(i)

The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year.

1:1

(ii)

The percentage increase in remuneration of each director, chief financial officer, Chief Executive officer, company secretary or manager, in the financial year.

Directors-366.67% CFO- 100% CS-100%

(iii)

The percentage increase in the median remuneration of employees in the financial year

544.44%

(iv)

Number of permanent employees on the rolls of the company as on 31st March, 2017.

8 i.e.3 MDS,1 CS, 1 CFO and 3 employees

(v)

Average percentile increase already made in the salaries of the 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.

FY 15-16

FY 16-17

No. of Months

6

12

No. of Employees

1

3

Average Salary

8,000

40000

Percentile increase

900%

Reason for increase

As company was operated only 6 months in FY 15-16.

(vi)

Affirmation that the remuneration is as per the remuneration policy of the company.

The company affirms remuneration is a per the remuneration policy of the company.

No Employee of the company has been paid Remuneration in excess of limits laid down in rule 5(2) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence statement showing details thereof is not applicable.

Audit Committee:

An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. The Audit committee comprises of 3 directors namely Shri Viral Suryakant Vora, Shri Kirankumar Narharibhai Doshi, and Mr.

Harishbhai Fatandas Sawlani. Shri Viral Suryakant Vora is the Chairman of the Audit Committee. During the year there was no instance where the board had not accepted the Recommendation of Audit Committee.

Vigil Mechanism/Whistle Blower Policy

Pursuant to section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Power) Rules, 2014, the Board of Director has adopted vigil mechanism in the form of Whistle Blower Policy through which, its Directors, Employees and Stakeholders can report their genuine concerns about unethical behaviors, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy.

It is the Company''s Policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle blower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The said policy provides for adequate safeguards against victimization and also direct access to the higher levels of supervisors.

Shri Viral Suryakant Vora, the Chairman of the Audit Committee can be contacted to report any suspected / confirmed incident of fraud/misconduct on:

Email: shantaiindustriesltd@gmail.com Contact no.: 09913425000

Your Company hereby affirms that no Director/Employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

The Board of Directors place on records the services of all stakeholders and associates who have co-operated in the working of the Company.

By Order of the Board of Directors

For Shantai Industries Limited

(Formerly Known As Wheel And Axle Textiles Limited)

Sd/-

Place: Surat Murlibhai F. Sawlani

Date : 05/05/2017 (DIN: 00655536)

Chairman and Managing Director


Mar 31, 2013

To The Members of Wheel & Axle Textiles Limited

The Directors of your Company have pleasure in presenting the TWENTY EIGHTH Annual Report of the Company together with the audited accounts for the financial year ended on March 31st, 2013.

1. FINANCIAL RESULTS

2012-13 2011-12 (Rs.) (Rs.)

Profit before Interest & Tax (5,837) (16,674)

Less : Interest 0 0

Provision for taxation 0 0

Provision for deferred tax 0 0

Net Profit (5,837) (16,674)

Add : Excess provision (270) 0

Add : Prior year adjustments 0 0

Add : Balance brought forward 4,09,00,317 4,09,75,104

Profit available for appropriation 4,08,94,210 4,09,58,430

Appropriations

Proposed Dividend 50,000 50,000

Tax on proposed dividend 8,495 8,112

General Reserve 0 0

Balance carried to Balance Sheet 4,08,35,715 4,09,00,318

Total 4,08,94,210 4,09,58,430



2. DIVIDEND

The Directors have recommending a dividend at the rate of 1% on the Equity Shares of the Company which will result in a net outflow of Rs.58,495/- including dividend tax of Rs. 8,495/-. The dividend, if approved by the members at the meeting, will be paid to such share holders whose names appear on the Register of Members on the date of the Annual General Meeting.

3. DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year under review.

4. DETAILS OF EMPLOYEES UNDER SECTION 217(2A) AND 217 (1) (e) OF THE COMPANIES ACT, 1956

There are no employees drawing a salary of more than Rs. 5,00,000 per month, if employed for part of the year or more than Rs. 60,00,000 per annum if employed for the entire year, hence the details as required by Section 217(2A) of the Companies Act, 1956 are not furnished.

The Company has not carried on any manufacturing activity during the year, neither has it dealt with foreign exchange for the year under review and hence the particulars under Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not furnished.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

- In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

- We 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 as at March 31, 2013 and of the profit of the Company for the year ended March 31, 2013

- We had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

- We had prepared the annual accounts on a going concern basis.

6. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Company''s Articles of Association, Mr. Praful A. Shah is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

7. AUDITORS

The term of the existing Statutory Auditors of the Company expires at the forthcoming Annual General Meeting. A certificate stating that the appointment as Statutory Auditors, if made, will be within the limits prescribed under Section 224(1B) has been received from Bipinchandra J. Modi & Co., Chartered Accountants, from the existing auditors. Members are requested to appoint Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting and also to fix their remuneration.

8. COMMENTS ON THE AUDITOR''S REPORT

The observations made in the Auditor''s Report are self explanatory and do not call for any further comments.

9. COMPLIANCE CERTIFICATE

In terms of Section 383A(1) of the Companies Act, 1956, and Companies (Compliance Certificate) Rules, 2001 the certificate issued by a Company Secretary in Whole-time Practice certifying that the Company has complied with all the provisions of the Companies Act, 1956 is annexed to the Report.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE.

Prescribed information requiring compliance with the rules relating to conservation of energy and technology absorption and Foreign Exchange pertaining to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is not applicable.

Date : May 24th, 2013 For and on behalf of the Board

Place : Surat Suhail P. Shah

Director


Mar 31, 2012

To The Members of Wheel & Axle Textiles Limited

The Directors of your Company have pleasure in presenting the TWENTY SEVENTH Annual Report of the Company together with the audited accounts for the financial year ended on March 31st, 2012

1. FINANCIAL RESULTS

2011-12 2010-11

(Rs. ) (Rs. )

Profit before Interest & Tax (16,674) (25,71,978)

Less : Interest 0 0

Provision for taxation 0 0

Provision for deferred tax 0 0

Net Profit (16,674) (25,71,978)

Add : Excess provision 0 70,464

Add : Prior year adjustments 0 0

Add : Balance brought forward 4,09,75,104 4,35,34,429

Profit available for appropriation 4,09,58,430 4,10,33,215

Appropriations

Proposed Dividend 50,000 50,000

Tax on proposed dividend 8,112 8,112

General Reserve 0 0

Balance carried to Balance Sheet 4,09,00,318 4,09,75,104

Total 4,09,58,430 4,10,33.215

2. DIVIDEND

The Directors have recommending a dividend at the rate of 1% on the Equity Shares of the Company which will result in a net outflow of Rs. 58,112/- including dividend tax of Rs. 8,112/-. The dividend, if approved by the members at the meeting, will be paid to such share holders whose names appear on the Register of Members on the date of the Annual General Meeting.

3. DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year under review.

4. DETAILS OF EMPLOYEES UNDER SECTION 217(2A) AND 217 (1) (e) OF THE COMPANIES ACT, 1956

There are no employees drawing a salary of more than Rs. 5,00,000 per month, if employed for part of the year or more than Rs. 60,00,000 per annum if employed for the entire year, hence the details as required by Section 217(2A) of the Companies Act, 1956 are not furnished.

The Company has not carried on any manufacturing activity during the year, neither has it dealt with foreign exchange for the year under review and hence the particulars under Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not furnished.

5. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

- In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

- We 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 as at March 31, 2012 and of the profit of the Company for the year ended March 31, 2012

- We had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

- We had prepared the annual accounts on a going concern basis.

6. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Company's Articles of Association, Mr. Alok P. Shah is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

7. AUDITORS

The term of the existing Statutory Auditors of the Company expires at the forthcoming Annual General Meeting. A certificate stating that the appointment as Statutory Auditors, if made, will be within the limits prescribed under Section 224(1B) has been received from Bipinchandra J. Modi & Co., Chartered Accountants, from the existing auditors. Members are requested to appoint Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting and also to fix their remuneration.

8. COMMENTS ON THE AUDITOR'S REPORT

The observations made in the Auditor's Report are self explanatory and do not call for any further comments.

9. COMPLIANCE CERTIFICATE

In terms of Section 383A(1) of the Companies Act, 1956, and Companies (Compliance Certificate) Rules, 2001 the certificate issued by a Company Secretary in Whole-time Practice certifying that the Company has complied with all the provisions of the Companies Act, 1956 is annexed to the Report.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE.

Prescribed information requiring compliance with the rules relating to conservation of energy and technology absorption and Foreign Exchange pertaining to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is not applicable.

For and on behalf of the Board

Suhail P. Shah Director

Date : July 19th, 2012 Place : Surat

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