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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) - Director Report

Company director 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)