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Sagardeep Alloys Ltd.

BSE: 510200 Sector: Metals & Mining
NSE: SAGARDEEP ISIN Code: INE976T01013
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Sagardeep Alloys Ltd. (SAGARDEEP) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

SAGARDEEP ALLOYS LIMITED

Opinion

We have audited the accompa panying standalone financial statements of SAGARDEEP ALLOYSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2018 the Profit and Loss Statement the Cash Flow Statement for the Period ended and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanplanations given to us the aforesaid standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 and its profit and its cash flows for the year/period endedon that date.

Basis of Our Opinion

We conducted our audit in accordance with the standard on auditing (SAs) specifiedunder section 143(10) of the companies act 2013. Our responsibilities under thosestandards are further described in the auditor’s respo sponsibilities for the auditof the financial statem tements section of our report. We are independent of the companyin accordance with the code ethics issued by the institute of chartered accountan tants ofIndia together with ethical requirements that are relevant to our audit of financialstatement under the provisions of the companies act 2013 and rules there under and wehave fulfilled our ethical responsibilities in accordance with these requirements and thecode of ethics. We be ieve that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide separate opinion on these matters.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accor cordance with theaccounting principles generall accepted in India including the Accounting Stand tandardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Ruleules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordanc with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevan to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from material misstatemeement whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statetatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Stand tandards require that we comply with ethical reqirements and plan and perform the audit to obtain reasonable assurance about whether thestandalone financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures select depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the standalone financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expres ing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany’s directo as well as evaluating the overall presentation of the standalonefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appro propriateto provide a basis for our audit opinion on the standalone financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper boo ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) Not Applicable; d) the balance sheet the state tatement ofprofit and loss dealt with by this Repo are in agreement with the books of account; e) Inour opinion the afores id financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014; f) Not Applicable g) On the basis of the writte representations received fromthe director as on 31stMarch 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31stMarch 2018 from being appointed as a director interms of Section 164 (2) of the Act. h) Not Applicable i) In our opinion the compa mpanyhas adequate internal financial control system in place and operating effectively. j) Withrespect to the othe matters included in the auditor’s report and to best of ourinformation and according to the explanation given to us.

1. The company has disclo sclosed the impact of pending litigation on its financialposition in its financial statement if any.

2. The company has made provision as required under the applicable law or AccountingStandards for material foreseeable losses if any on long term contracts includingderivative contracts.

3. There has been no delay in transferring amounts required to be transferred to theinvestor’s education and protection fund by the company if any.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018

Annexure - A to the Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the membe mbers of theCompany on the standalone financial state tatements for the Period 01-04-2017 to31-03-2018 we report that: i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. (b) The companyhas a regular programme of physical verification of its fixed assets by which fixed assetsare verified in a phased manner over a period of three years. In accordance with thisprogramme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. (c) The title deeds of immovable properties are held in the name ofthe company.

ii) The Inventories have been physically verified during the year by the management. Inour opinion and according to the information and explanations given to us the company hasmaintained proper records of inventory. As explained to us there were no materialdiscrepancies noticed on physical verification of inventory as compar pared to bookrecords and the same has been properly dealt with in books of accounts.

iii) The Company had not granted loan to parties covered in the register maintainedunder section 189 of the Comp mpanies Act 2013 (‘the Act’). (a) Not Applicable(b) Not Applicable (c) Not Applicable

iv) In our opinion and acco ccording to the information and explanations give to us inrespect of loans investments guarantees and security provisions of section 185 and 186of the Companies Act 2013 had been complied with.

v) The company had not accepted any deposits from public therefore the directivesissued by the Reserve Bank of India and the provisions of sections 73 to 76 o any otherrelevant provisions of the Compa ies Act 2013 and the rules framed there unde is notapplicable.

vi) The Central Governme had prescribed the maintenance of cost records under section148(1) of the Act for th goods supplied by the Company. In our opinion and according tothe information and explanations given to us the company had maintained proper costrecords.

vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accr ccrued in the booksof account in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have bee regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees' state insurance and duty of excise.

According to the infor nformation and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material statutory dues were in arrears as at31st March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of wealth tax duty of customs and cess which have not been deposited with theappropriate authorities on account of any dispute. However according to explanationsgiven to us the following dues of sales tax have not been deposited by the company onaccount of dispute:

Name of Statue Nature of Dues Amount (In `) Period to which Relates Forum Where Dispute is pending
Gujarat VAT Act Sales Tax Intere and Penalt 2328175/- 2009-10 DCCT-A
Gujarat VAT Act Sales Tax Intere and Penalt 48200824/- - Tribunal
Gujarat VAT Act Sales Tax Intere and Penalt 18385414/- 2010-11 DCCT-A
Gujarat VAT Act Sales Tax Intere and Penalt 4096251/- 2011-12 DCCT-A
Gujarat VAT Act Sales Tax Interest and Penalty 80758272/- 2013-14 DC-Appeal-1

viii) The company had not defaulted in repayment of loans or borrowing to a financialinstitution bank Gover vernment or dues to debenture holders.

ix) According to the inform formation and explanations given to us the comp ompany hadnot raised any money by way of Initial Public Offer or Further Public Offer and termloans.

x) According to the inform ormation and explanations given to us no material fraud onor by the Company has been noticed or reported during the course of our audit.

xi) According to the inform ormation and explanations given to us managerialremuneration had been paid or provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion the comp ompany is not nidhi company. Therefore the provisions asmentioned in the Nidhi Rules 2014 are not applicable to the company. xiii) In our opinionand according to the information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013 whereapplicable and the details have bee disclosed in the Financial Statements etc. asrequired by the applicable accounting standards.

xiv) According to the inform formation and explanations given to us the comp ompanyhad not made preferential allotment of shares during the year/period under review and therequirement of section 42 of the Com ompanies Act 2013 and other provisions are notapplicable.

xv) According to the inform ion and explanations given to us the compa pany had notentered into any non-cash transa ansactions with directors or persons connected with him.

xvi) In our opinion the company is not a Non Banking Finance Comp ompany thereforethe requirement to register under section 45-IA of the Reserve Bank of India Act 1934 innot applicable.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SagardeepAlloys Limited ("the Company") as of 31st March 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the mainten tenanceof records that in reasonable detail accu curately and fairly reflect the transactionsand dispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accou ing principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statemen .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subje to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate inter nternalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Com ompanyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Acco ccountants of India.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018

#CPEnd#

#DRStart#

Directors’ Report

Dear Members

Your Directors take pleasure in presenting the 11th Annual Report along with AuditedFinancial Statements of your Company for the financial year ended 31st March 2018.

1. Financial Results

During the year under review your Company has achieved a tota net sale of Rs.6240.59lakhs and achieve Net Profit after Tax (NP) of Rs.54.53 lakhs. There is notable increasein profit after tax during the current year in comparison to that of previous year. Yourdirectors are optimistic about the performance of the Company in the coming years. Thefinancial highlights for the year 2017-18 are as unde

Particulars for the year ended March 31 2018 March 31 2017
Net revenue from Operations (Sales) 6240.59 7252.79
Profit Before Depreciation and Tax 117.73 84.39
Less: Depreciation 39.56 39.50
Profit Before Tax 78.17 44.89
Less: Tax Expense 23.34 17.73
Profit After Tax 54.53 27.16
EPS (Basic) 0.48 0.25
EPS (Diluted) 0.48 0.25

2. Dividend

Your Director feel that it is prudent to plough back the profits of the Company forfuture growth of the Company and therefore do not recommend any dividend for the yearended March 31 2018.

3. Transfer of Unclaimed Dividend to Investor Education and Protection Fund

Since there was no unpaid/unclaimed dividend the provision of Section 125 of theCompanies Act 2013 do not apply.

4. Change in the nature of business if any-

During the year the Compan altered its Main Object Clause of the Memorandum of

Association of the Company through shareholders approval by postal ballot and the samebecame effective w.e.f. 28/11/2017. Through the said alteration the Company added one newobject to its main object clause apart from the existing one. The Company also adopte newset of memorandum of association which is in consonance with new Companies Act 2013 andlatest amendments.

5. Reserves

During the year under review the Company has not transferred any amount to reserve.

6. Subsidiary Joint Ventures and Associate Companies

The Company has one wholly owned Indian Subsidiary company i.e. Sagardeep EngineersPrivate Limited. A statem tement containing the salient features of financial statement ofour subsidiaries in the prescribed format AOC-1 is appended to the finan ial statements ofthe Company.

7. Consolidated Financial Statement

The Financial Statement of the Company for the Financial year 2017-18 are prepared incompliance with the applicable provisions of the Act Accounting Standards and asprescribed by Securities and Exchange Board of India (SEBI) und nder SEBI (ListingObligations and Disclos closure Requirements) Regulations 2015. The ConsolidatedFinancial Statement has been prepared on the basis of the audited financial statement ofthe Company as approved by their respective Board of Directors. Pursuant to the provisionsof Section 136 of the Act the Financial Statements of the Company the ConsolidatedFinancial Statements along with all relevant docum cuments and Auditors report thereonform part of this Annual Report.

8. Public Deposit

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing the details of deposits which are not in com iance with ChapterV of the Act is not applicable.

9. Particulars of loan Guarantees or Investment made under Section 186

During the year the Company has not given any guarantee or provided security inconnection with the loan to any other body corporate or person or made any investmentshowever the Company has provided loans to persons/bod corporates and the particulars ofsuch loans falling under the provisions of Section 186 of the Companies Act 2013 are proided in the notes to financial statements of the Company

10. Extract of the annual return

The extract of the Annual Retu eturn in Form-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administra ion) Rules 2014 isfurnished in Annexure A and is attached to the report.

11. Directors& Key Management Personnel

Composition of Board & Board Meetings

The Board of Directors of the Company has an optimum combination of Executive NonExecutive and Independent Directors. As on the date of this report the Board comprises of5(Five) Directors out of which 2 are Executive Directors and 3 are non-executiveIndependent Directors that includes one Woman Director. The Chairman of the Board is anexecutive Director.

The Board of Directors duly met 6 times on 07/04/2017 25/05/2017 17/07/201717/10/2017 14/11/2017 and 07/03/2018 during the year. The Composition category andattendance of each Director at the Board and Annual General Meeting of each Director invarious compa ies is as follows:-

Name of Director Designation and Category No of Board Meetings held during the year No of Board Meetings attend ed during the year Attendance at the AG M
Mr. Satishkumar A Mehta 6 4 Yes
Chairman & Managing Director Promoter
Mr. Jayeshkumar A Mehta 6 6 Yes
Whole Time Director Promoter
Mr. Hemendra B Patel 6 6 Yes
Non-Executive Director Independent
Mrs. Vinita P Maheshwari 6 6 Yes
Non-Executive Director Independent
Mr. Jitendra Patel 6 6 Yes
Non-Executive Director Independent

INDUCTIONS

The following appointments were made during the year

Mr. Jitendrakumar Dhanjibhai Patel who was appointed as an additional independentdirector of the Company effective from 23/02/2 02/2017 was appointed as independent directrector by shareholders in their 10th Annua General meeting held on 21st Septembe 2017 fora period of five years.

Ms. Barkha Deshmu hmukh a member of Institute of Company Secretaries of India wasappointed as the Company Secretary and Compliance Officer of the Company effective from07th Ap il 2017.

Mr. Krishnakant Somani was appointed as the Chief Financial Officer of the Companyeffective from 17th July 2017.

CESSATIONS:

Mr. Dileep Panchal resigned as a company secretary and compliance officer of thecompany effective from 07th April 2017.

Mr. Hemang Panchal resigned as an independent director of the Company effective from17th July 201 .

Mr. Asamal Mehta & Mr. Harishkumar Mehta resigned as Whole time directors of theCompany effective from 17th July 2017.

Mr. Bhavik Somani resigned as Chief Financial Officer of the Company effective from17th July 201 .

Retirement by Rotation

In accordance with the pro isions of the Companies Act 2013 and Companies Articles ofAssociation Mr. Jayeshkumar A Mehta (DIN-02156140) retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment. Necessary resolution for his reappointment is placed beforethe shareholder for approval.

Profile of Directors seeking appointment / reappointment

As required under regulation 36(3) of SEBI (LODR) 2015 particulars of the Directorsretiring and seeking reappointment at the ens ing Annual General Meeting is annexed to thenotice convening 11th Annual Gene eneral Meeting.

Key Managerial Personnel

As on the date of this report the following persons are the Key ManagerialPersonnel(s) of the Company: a) Mr. Satishkumar A Mehta Chairman & Managing Directorb) Mr. Jayeshkumar A Mehta Whole Time Direct c) Mr. Krishnak nakant Somani ChiefFinancial Officer d) Ms. Bark arkha Deshmukh Company Secretary

Declaration from Independent Director

All the Independent Directors of the Company have given their declarations stating thatthey meet the criteria of independence as prescribed under the Section 149(6) of theCompanies Act 2013 read with the rules made there under and in the opinion of the Boardthe Independent Directors meet the said criteria.

During the year under review the Independent Directors duly met pursuant to theprovisions as specified in Schedule IV of the Companies Act 2013 and the quorum waspresent throughout the meeting.

12. Postal ballot

During the year pursuant to Section 110 of the Companies Act 201 read with theCompanies (Management and Administration) Rules 2014 (including any statutoryamendment(s) or re-enactment(s) made thereunder) your Com ompany passed the followingresolution throu rough postal ballot as per the details below:

Date of Postal ballot Notice: 17/07/2017 Date of declaration of result: 30/11/2017Voting period: 30/10/2017 to 28/11/2017 Date of approval:28/11/20 /2017

Name of resolution Type of resoluti on No. of votes polled

Votes cast in favour

Votes cast against

No. of votes % No. of vot es %
Alteration in main object clause of Memorandum of Association Special 874360 8743600 100 0 0
Adoption of new Memorandum of Association of the Company Special 8743600 8743600 100 0 0

13. Audit Committee

The Audit Committee is duly constituted in accordance with SEBI (LODR) Regulations 2015and Section 177 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings ofthe Board and its Powers) Rules 2014 as amended from time to time. It adheres to theterms of refere ference which is prepared in compliance with Section 177 of the CompaniesAct 2013 and SEBI (LODR) Regulations 2015. The Mem embers of the Committee are:-

Name Category & Position Number of meetings held Number of meetings attend ed
Mr. Jitendrakumar Patel 4 4
Non Executive Independent Director Chairman
Mrs. Vinita Maheshwari 4 4
Non Executive Independent Director Member
Mr. Satishkumar A Mehta 4 3
Executive Director Member

Two third of the members are Independent Directors and all the members are financiallyliterate. The composition role functions and powers of the Audit Committe are in linewith the requirements of applicable laws and regulations. The Audit Com ommittee shalloversee financial reporting process and disclosures review financial statements internalaudit reports related party transactions financial and risk management policiesauditors qualifications compliance with Accounting Standards etc. and oversee compliancewith Stock Exchan hanges and legal requirements concer ing financial statements andfixation of audit fee as well as payment for other service etc.

Four Audit Committee meetings were held during the year 2017-18 at the RegisteredOffice of the Compan on 25/05/2017 13/07/2017 14/11/2017 07/03/2018. The CompanySecretary acts as Secretary to the Audit Committee and no personnel has been denied accessto the Audit Committee.

14. Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted in accordance with SEBI (LODR)Regulation 2015 and Section 178 of the Companies Act 2013 read with Rule 6 of theCompanies (Meetings of the Board and its Powers Rules 2014 as amended from time to time.The Company Secretary acts as the Secretary to the committee and the Committee Membersare:

Name Category & Position Number of meetings held Number of meetings attended
Mr. Jitendrakumar Patel 2 2
Non Executive Independent Director Chairman
Mrs. Vinita Maheshwari 2 2
Non Executive Independent Director Member
Mr. Hemendra B Patel 2 2
Non Executive Independent Director Member

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremune uneration of Directors Key Managerial Perso ersonnel and other employees. The saidpolicy is available on the website of the Company (www.sdalloys.com).

Two meeting was held during the year 2017-18 at the Registered Office of the Company on07/04/2017 and 17/07/2017.

15. Stakeholders Relationship Committee

The Stakeholders Relationship Committee is constituted in compliance with therequirements of Section 178 of the Companies Act 2013. Company Secretary is theCompliance Officer who acts as the Secretary to the Committe and the Members of theCommittee are:

Name Category Position
Mrs. Vinita P Maheshwari Non Executive Independent Director Chairman
Mr. Hemang M Panchal Non Executive Independent Director Member
Mr. Satishkumar A Mehta Executive Director Member

The Stakeholders Relationship Committee looks into shareholders’ complaintsrelated to transfer of shares non-receipts of balance sheet besides complaints from SEBIStock Exchanges Court and various Investor Forums. It oversees the perform formance ofthe Registrars and Transfer Agent and recommends measures for overall improvement in thequality of investor services. The Company is in compliance with the SCORES which hasinitiated by SEBI for processing the investo complaints in a centralized web based redresssystem and online redressal of all the shareholders complaints.

16. Compliance Officer

The Compliance officer of the Company is Ms. Barkha Deshmukh who is also designated asCompany Secre ecretary of the Company.

17. Statement On Formal Annual Evaluation Of Board

Nomination and Remuneration Committee annually evaluates the performance of individualDirectors Committees and of the

Board as a whole in accordance with the formal system adopted by it. Further the Boardalso regularly in their meetings held for various purposes evaluates the performance ofall the Directors committees and the Board as a whole. The Board considers the recommemendation made by Nomination and Remun uneration Committee in regard to the evaluation ofboard members and also tries to dischar harge its duties more effectively. Each Boardmember’s contribution their participation was evaluated and the domain knowledgethey bring. They also evaluat luated the manner in which the information flows between theBoard and the Manageme ement and the manner in which the board papers and other documentsare prepared and furnished.

18. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company and thedate or report.

19. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future

There are no significant and material orders passed by the regulat ulators or courts ortribunals impacting the going concerns status and Company’s operations in future.

20. Auditors

1. Statutory Auditors

M/s. Piyush J Shah & Co. Chartered Accountants the Statuto Auditors of theCompany were reappointed at the 09th

Annual General Meeting held on 30th September 2016 to hold office from the conclusionof Ninth (9th) Annual General Meeting (AGM) till the concl nclusion of 14th Annual GeneralMeeting to be held in the year 2021 (subject to ratification of their appointment at everyAGM).

In accordance with the Companies Amendment Act 2017 enforce on 7th May 2018 by theMinistry of Corp orporate Affairs the appointment of Statutory Auditors is not requiredto be ratified at every Annual General Meeting.

There are no qualifications reservations or adverse remarks made by M/s. Piyush J Shah& Co. Chartered Accountants the Statutory Auditors of the Company in their report.

2. Cost Auditors

As per the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors Rules 2014 framed thereunder and the Cost Audit ordersissued from time to time the Board of Directors in their meeting held on 17.07.2017 hasappointed M/s. Soni & Associates Cost Accountants (FRN 102850) as Cost Auditor of theCompany for the financial year 2017-18. Further the remuneration of the Cost Auditor wasratified by members of the Com ompany in their annual general meeting held on 21.09.2017.

3. SECRETARIAL AUDITOR

M/s. Khandelwal Devesh & Associates Company Secretaries Ahme medabad wereappointed as Secretarial Auditor of the Company to conduct secre ecretarial audit pursuantto the provisions of Section 204 of the Companies Act 2013. The secretarial audit of theCompany has been conducted on a concurrent basis in respect of the matters as set out inthe said rules and Secretarial Audit Report given by M/s. Khandelwal Devesh &Associates Company Secretaries Secretarial Auditor of the

Company forms part of this report and is marked as Annexure-"B".

There are no qualifications reservations or adverse remarks made by M/s. KhandelwalDevesh & Associates Company Secretaries Secretarial Auditor of the Company in theirreport.

21. Personnel

The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Man anagerial Personnel) Rules2014 is provided in the Report and marked as Annexure-"C". No employee of theCompany was in receipt of the remuneration exceeding the limits prescribed in the rule 5(2of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

22. Management’s Discussion and Analysis Report

The Management’s Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (2) (e) of the Listing Regulations is given asAnnexure-"D" to this report.

23. Corporate Social Responsibility (CSR)

The provisions of Corporate Social Responsibility (CSR) are not applicable to theCompany.

24. Conservation of energy technology absorption and foreign exchange earnings andoutgo

A. CONSERVATION OF ENERGY: i. the steps taken or impact on conservation of energy : Nilii. the steps taken by the company for utilising alternate sources of energy : None iii.the capital inve nvestment on energy conservation equipments : Nil

B. TECHNOLOGY ABSORPTION: i. the efforts mad towards technology absorption : None ii.the benefits derived like product improvement cos reduction product developme ment orimport substitution : None iii. in case of imported technology (imported during the lastthree years reckoned from the beginning of the financial year)- a) the details oftechnology imported : None b) the year of import : N.A. c) whether the technology beenfully absorbed : N.A. d) if not fully absorbed areas where absorption has not takenplace and the reasons thereof : N.A. e) the expenditure incurred on Research andDevelopment : Nil C. Foreign exchange Earnings & Outgo

• Foreign Exchange Earning: NIL

• Foreign Exchange Outgo: Rs.2541836/-

24. Particulars of contracts or arrangements with related parties:

The Company has no material significant transactions with its related parties which mayhave potential conflict with the interest of the Company at large.

25. Statement regarding the development and implementation of Risk Management Policy

The Company has not developed and implemented any risk managem gement policy as therisk threatening the business activity carried out by the Company during the year areminimal.

26. Prevention Of Sexual Harassment At Workplace

As per the requirement of The Sexual Harassment of Women at Workplace

(Prevention Prohibition & Redressal) Act 2013 and rules made thereunder yourCompany has constituted Internal Complaints Committee (ICC) which is responsible forredressal of complaints related to sexual harassment. Your Directors declared and confirmthat during the year under review there is no case filed under Sexual Harassm assment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

27. Adequacy of Internal Financial Control

The Company has in plac adequate internal financial controls with reference tofinancial statements. The Board has inter alia reviewed the adequacy and effectiveness ofthe Company’s internal financial controls relating to its financial statements.During the year no reportable material weakness was observed.

28. Directors’ Responsibility Statement

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that: (a) In the preparation of the annual accounts for the financial year endedMarch 31 2018 the applicable accounting standards have been followed along with properexplanation relating to material depar partures.

(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reaso easonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit and loss of the Company for that period under review.

(c) The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

(d) The directors have prepare the annual accounts on a going concern basis.

(e) The directors had laid down internal financial controls to be follo ollowed by thecompany and that such inter nternal financial controls are adequate and were operatingeffectively.

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

29. Listing

The equity shares of the Compa mpany are listed on SME platform of NSE (NS EMERGE) andthe Company has paid the annual listing fees for the year 2018-19.

30. Corporate Governance

Your Company has been comply plying with the principals of good Corporate Governanceover the years and is committed to the highest standards of compliance. Pursuant toregulation 15(2) of the SEBI (LODR) Regulations 2015 the compliance with the corporategovernance provision as specified in regulations 17 to 27 and clauses (b) to (i) ofRegulation 46 (2) and para C D and E of schedule V shall not apply to the listed entitywhich has listed its specified securities on the SME Exchange.

Therefore the Corporate Governance Report is not applicable on the Company andtherefore not provided by the Board.

31. Acknowledgement: The Directors place on record their sincere than to the Bankersbusiness associates consu nsultants customers and employees for their continued supportextended to your Companies activities during the year unde review. Your Directors alsoacknowled ledges gratefully the shareholders for their support and confidence reposed onyour Company.

For and on behalf of board of directors
Date: 28/05/2018 Satishkumar A Mehta
Place: Ahmedabad Chairman & Managing Director (DIN: 01958984)

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SECRETARIAL AUDIT REPORT

Form No. MR-3

FOR THE FINANCIAL YEAR ENDED 31st March 2018 [Pursuant to section 204(1 of theCompanies Act 2013 and rule No.9 of the Companies (Appointme tment and RemunerationPersonnel) Rules 2014]

To

The Members

Sagardeep Alloys Limited

Ahmedabad Gujarat.

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corpora practices by SAGARDEEP ALLOYS LIMITED (CIN:L29253GJ2007PLC050007) (her inafter called the company). Secretarial Audit was conductedin a manner that provided me a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books papers minute books form andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on 31st March 2018 (‘AuditPeriod’) complied with the statutory provisions listed hereunder and also tha theCompany has proper Board-processe and compliance-mechanism in place to the exten in themanner and subject to the reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2018according to the provisions of:

i. The Companies Act 201 (the Act) and the rules made there under.

ii. The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

iii. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunderto the exten of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowing.

v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers)Regu egulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 201 .

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009. (not applicable to the company during the audit period)

(d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 201 (not applicable to the company during the audit period)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 200 (not applicable to the company during the audit period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents Regulations 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 200 (not applicable to the company during the audit period);

(h) The Securities and Exchange Board of India (Buyback of Secu ities) Regulations1998 (not applicable to the company during the audit period);

I have relied on the represent sentations made by the Company and its officers forsystems and mechanism formed by the Com ompany for compliances of other specificapplicable Acts Laws and Regulations to the Company as mentioned hereunder; a) The Employloyees’ Provident Funds and Miscellaneous Provisions Act 1952 b) Employees’State Insurance Act 1948 c) The Factories Act1948 d) The Minimum Wages Act 1948 andrules made there unde nder I have also examined complianc with the applicable Clauses ofthe following: (i) Secretarial Standards issued by The Institute of Company Secrecretaries of India; (ii) Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standa ndards etc. mentioned above.

I further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act. Adequate notice is given to allthe directors to schedule the Board Meetings agenda and detailed notes on agenda weresent at least seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.

Board take decision by majority of directors while the dissenting directors’ viewsare captured and recorded as part of the minutes.

I further report that:

There are adequate systems and processes in the company commensurate with the size andoperations of the company to monitor and ensure compliance with applicable Laws RulesRegulations and guidelines.

I further report that there were no other instances of:

(i) Public/Rights/Preferential issue of Shares/debentures/sweat equity. (ii)Redemption/buy-back of securities.

(iii) Major decisions taken by the members in pursuance to section 180 of the CompaniesAct 2013 (iii) Merger/ amalgamation etc.

(iv) Foreign technical collaborations.

For Khandelwal Devesh and Associates
Company secretaries
Devesh Khandelwal
Proprietor
FCS: 6897
COP No.:4202
Place: Ahmedabad
Date:28/05/2018

Note: This report is to be read with my letter of even date which is annexed asAnnexure herewith and forms and integral part of this report.

Annexure to Secretarial Audit Report

To

The Members

Sagardeep Alloys Limited Ahmedabad Gujarat.

My report of even date is to be read along with this letter.

Maintenance of secret ial records is the responsibility of the management of theCompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial reco cords.The verification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the proces cesses and practices I followed provide areaso asonable basis for my opinion.

I have not verified the correctness and appropriateness of financial records and Booksof Accounts of the Compan pany.

Wherever required I have obtained the Management represen esentations about thecompliance of Laws Rules and Regulations and happening of events etc.

The compliance of the provisions of corporate and other applicable Laws RulesRegulations Standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.

The Secretarial Audit report is neither an assurance as to the future viability of theCompany nor of the efficacy or effectiveness with which the managem agement has conductedthe affairs of the Compa pany.

For Khandelwal Devesh and Associates

Company Secretaries

Devesh Khandelwal

Proprietor

FCS: 6897

COP No.:4202

Place: Ahmedabad

Date:28/05/2018

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Management’s Discussion And Analysis

INDUSTRY STRUCTURE & DEVELOPMENT

The size of Indian copper indu ndustry (consumption of refined copper per annu isaround half a million tones which constitute only 3 percent of the world copper market.Sterlite Industries Hindalco Industries and Hindus dustan Copper are major producers ofrefined copper in India. India has emerged as net exporter of copper from the status ofnet importer on account of rise in production. In fact copper as a metal came in use ofman much earlier than iron. Copper has been used for making utensils and coins since long.Being a good conductor of electricity and ductile it is extensively used in a vastvariety of electrical machinery wires and cables. It is also an important metal used byautom tomobile and defense industries. Further it is alloyed with iron and nickel to makestainless steel with nickel to make ‘morel metal’ and with aluminium to make‘duralumin’. When alloyed with zinc it is known as ‘brass’ and withtin ‘bronze’. Copper ore is found in ancient as well as in younger rockformations and occurs as veins as dissemination and as bedded deposits. Mining for copperis a costly and a tedious affair because most of the copper ores contain a smallpercentage of the metal. Against the international averag of metal content (in the ore) of2.5 per cent Indian ore grade averages less than one per cent.

OPPORTUNITIES AND THREATS

Our success as an organization depends on our ability to identify opportunities andleverage them while mitigating the risks that arise while conducting our business. Duringthe financial year 2017-18 major decision of indu ing into different business activitieswas tak in order to widen the operation of the Company. Looking into the opportunitiesinto new business line your directors are optimistic about future expansion and growth ofour Company. Despite of identifying opportunities there is always risk associated to itlike Competition General Economic and Business Conditions legal and regulatory complianceetc.

OUTLOOK RISKS & CONCERNS

Our Outlook risks and concern are as follows:

• A large part of our revenue depends on our top clients and loss of any one ofmajor client may lead to negative impact on our business.

• Our success depends on our top management and key personnel and our ability toattract and retain them.

• Changes in policies of government of India or political instability mayadversely affect economic conditions in India which may lead to negative impact on ourbusiness.

• Any natural calamities such as earthquakes storms fire etc. may tend to affectour operational efficiency negatively.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has an adequate internal control system commensurate with its size and thenature of its business in order to achieve efficiency in operation and optimum utilizationof resources. These controls ensure safeguarding of assets reduction and detection offraud and error adequacy and completeness of the accounting records and timelypreparation of reliable financial information.

FINANCIAL AND OPERATIONAL PERFORMANCE

(Amount In `lacs)

Particulars for the year ended March 31 2018 March 31 2017
Net revenue from Operations (Sales) 6240.59 7252.79
Profit Before Depreciation and Tax 117.73 84.39
Less: Depreciation 39.56 39.50
Profit Before Tax 78.17 44.89
Less: Tax Expense 23.34 17.73
Profit After Tax 54.53 27.16
EPS (Basic) 0.48 0.25
EPS (Diluted) 0.48 0.25

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The industrial relations remained cordial throughout the year. The employe of theCompany have extended a very productive cooperation in the efforts of the manage agementto carry the Company to greater heights. Continuous training down the line is a normalfeature in the Company to upgrade the skills and knowledge of the employees and workmen ofthe Company.

CAUTIONARY STATEMENT

Statement in this report describing the Company’s objectives expectations orpredictions may be forward looking statements within the meaning of applicable securitieslaws and regulations. Actual results may differ materially from those expressed in thestatement. Important factors that could influence the company’s operations includeeconomic conditions affecting demand / supply and price condition in the domestic marketsin which the company opera erates changes in the government regulations tax law andother statutes and other incidental factor .

For and on behalf of the Board of Directors
Date: 28/05/2018 Satishkumar Mehta
Place: Ahmedabad Chairman & Managing Director
(DIN: 01958984)

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Independent Auditors’ Report

TO

THE MEMBERS OF

SAGARDEEP ALLOYS LIMITED

Opinion

We have audited the accompa panying standalone financial statements of SAGARDEEP ALLOYSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2018 the Profit and Loss Statement the Cash Flow Statement for the Period ended and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanplanations given to us the aforesaid standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 and its profit and its cash flows for the year/period endedon that date.

Basis of Our Opinion

We conducted our audit in accordance with the standard on auditing (SAs) specifiedunder section 143(10) of the companies act 2013. Our responsibilities under thosestandards are further described in the auditor’s respo sponsibilities for the auditof the financial statem tements section of our report. We are independent of the companyin accordance with the code ethics issued by the institute of chartered accountan tants ofIndia together with ethical requirements that are relevant to our audit of financialstatement under the provisions of the companies act 2013 and rules there under and wehave fulfilled our ethical responsibilities in accordance with these requirements and thecode of ethics. We be ieve that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide separate opinion on these matters.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accor cordance with theaccounting principles generall accepted in India including the Accounting Stand tandardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Ruleules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordanc with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevan to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from material misstatemeement whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statetatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Stand tandards require that we comply with ethical reqirements and plan and perform the audit to obtain reasonable assurance about whether thestandalone financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures select depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the standalone financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expres ing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany’s directo as well as evaluating the overall presentation of the standalonefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appro propriateto provide a basis for our audit opinion on the standalone financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper boo ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) Not Applicable; d) the balance sheet the state tatement ofprofit and loss dealt with by this Repo are in agreement with the books of account; e) Inour opinion the afores id financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014; f) Not Applicable g) On the basis of the writte representations received fromthe director as on 31stMarch 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31stMarch 2018 from being appointed as a director interms of Section 164 (2) of the Act. h) Not Applicable i) In our opinion the compa mpanyhas adequate internal financial control system in place and operating effectively. j) Withrespect to the othe matters included in the auditor’s report and to best of ourinformation and according to the explanation given to us.

1. The company has disclo sclosed the impact of pending litigation on its financialposition in its financial statement if any.

2. The company has made provision as required under the applicable law or AccountingStandards for material foreseeable losses if any on long term contracts includingderivative contracts.

3. There has been no delay in transferring amounts required to be transferred to theinvestor’s education and protection fund by the company if any.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018

Annexure - A to the Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the membe mbers of theCompany on the standalone financial state tatements for the Period 01-04-2017 to31-03-2018 we report that: i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. (b) The companyhas a regular programme of physical verification of its fixed assets by which fixed assetsare verified in a phased manner over a period of three years. In accordance with thisprogramme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. (c) The title deeds of immovable properties are held in the name ofthe company.

ii) The Inventories have been physically verified during the year by the management. Inour opinion and according to the information and explanations given to us the company hasmaintained proper records of inventory. As explained to us there were no materialdiscrepancies noticed on physical verification of inventory as compar pared to bookrecords and the same has been properly dealt with in books of accounts.

iii) The Company had not granted loan to parties covered in the register maintainedunder section 189 of the Comp mpanies Act 2013 (‘the Act’). (a) Not Applicable(b) Not Applicable (c) Not Applicable

iv) In our opinion and acco ccording to the information and explanations give to us inrespect of loans investments guarantees and security provisions of section 185 and 186of the Companies Act 2013 had been complied with.

v) The company had not accepted any deposits from public therefore the directivesissued by the Reserve Bank of India and the provisions of sections 73 to 76 o any otherrelevant provisions of the Compa ies Act 2013 and the rules framed there unde is notapplicable.

vi) The Central Governme had prescribed the maintenance of cost records under section148(1) of the Act for th goods supplied by the Company. In our opinion and according tothe information and explanations given to us the company had maintained proper costrecords.

vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accr ccrued in the booksof account in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have bee regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees' state insurance and duty of excise.

According to the infor nformation and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material statutory dues were in arrears as at31st March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of wealth tax duty of customs and cess which have not been deposited with theappropriate authorities on account of any dispute. However according to explanationsgiven to us the following dues of sales tax have not been deposited by the company onaccount of dispute:

Name of Statue Nature of Dues Amount (In `) Period to which Relates Forum Where Dispute is pending
Gujarat VAT Act Sales Tax Intere and Penalt 2328175/- 2009-10 DCCT-A
Gujarat VAT Act Sales Tax Intere and Penalt 48200824/- - Tribunal
Gujarat VAT Act Sales Tax Intere and Penalt 18385414/- 2010-11 DCCT-A
Gujarat VAT Act Sales Tax Intere and Penalt 4096251/- 2011-12 DCCT-A
Gujarat VAT Act Sales Tax Interest and Penalty 80758272/- 2013-14 DC-Appeal-1

viii) The company had not defaulted in repayment of loans or borrowing to a financialinstitution bank Gover vernment or dues to debenture holders.

ix) According to the inform formation and explanations given to us the comp ompany hadnot raised any money by way of Initial Public Offer or Further Public Offer and termloans.

x) According to the inform ormation and explanations given to us no material fraud onor by the Company has been noticed or reported during the course of our audit.

xi) According to the inform ormation and explanations given to us managerialremuneration had been paid or provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion the comp ompany is not nidhi company. Therefore the provisions asmentioned in the Nidhi Rules 2014 are not applicable to the company. xiii) In our opinionand according to the information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013 whereapplicable and the details have bee disclosed in the Financial Statements etc. asrequired by the applicable accounting standards.

xiv) According to the inform formation and explanations given to us the comp ompanyhad not made preferential allotment of shares during the year/period under review and therequirement of section 42 of the Com ompanies Act 2013 and other provisions are notapplicable.

xv) According to the inform ion and explanations given to us the compa pany had notentered into any non-cash transa ansactions with directors or persons connected with him.

xvi) In our opinion the company is not a Non Banking Finance Comp ompany thereforethe requirement to register under section 45-IA of the Reserve Bank of India Act 1934 innot applicable.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SagardeepAlloys Limited ("the Company") as of 31st March 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the mainten tenanceof records that in reasonable detail accu curately and fairly reflect the transactionsand dispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accou ing principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statemen .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subje to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate inter nternalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Com ompanyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Acco ccountants of India.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May 2018