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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 13thAnnual Report along withAudited Financial Statements of your Company for the financial year ended 31stMarch 2020.

1. Financial Results

During the year under review your Company has achieved a total net sale of Rs.3380.27lakhs and achieved Net Profit after Tax (NP) of Rs.26.07 lakhs. Your directors areoptimistic about the performance of the Company in the coming years. The financialhighlights for the year 2019-20 are as under:

Standalone (in lakhs)

Particulars for the year ended March 31 2020 March 31 2019
Net revenue from Operations (Sales) 3380.27 5108.87
Profit Before Depreciation and Tax 73.82 250.92
Less: Depreciation 42.37 40.61
Profit Before Tax 31.45 233.91
Less: Tax Expense 5.37 61.01
Profit After Tax 26.07 172.89
EPS (Basic) 0.23 1.52
EPS (Diluted) 0.23 1.52

Consolidated (in Lakhs)

Particulars for the year ended March 31 2020 March 31 2019
Net revenue from Operations (Sales) 3380.27 5108.87
Profit Before Depreciation and Tax 73.54 273.95
Less: Depreciation 43.92 42.19
Profit Before Tax 29.43 231.77
Less: Tax Expense 6.63 60.92
Profit After Tax 22.80 168.83
EPS (Basic) 0.21 1.57
EPS (Diluted) 0.21 1.57

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 2020.

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-

There is no change in the nature of business carried out by the Company in the Year2019-2020.

5. Reserves

The Board of Directors has decided to retain the entire amount of profits in the profitand loss account.

6. Subsidiary Joint Ventures and Associate Companies

The Company has one wholly owned Indian Subsidiary company i.e. Sagardeep EngineersPrivate Limited. A statement containing the salient features of financial statement of oursubsidiaries in the prescribed format AOC-1 is appended to the financial statements of theCompany.

7. Consolidated Financial Statement

The Financial Statement of the Company for the Financial year 2019-20 are prepared incompliance with the applicable provisions of the Act Accounting Standards and asprescribed by Securities and Exchange Board of India (SEBI) under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Consolidated FinancialStatement has been prepared on the basis of the audited financial statement of the Companyas approved by their respective Board of Directors. Pursuant to the provisions of Section136 of the Act the Financial Statements of the Company the Consolidated FinancialStatements along with all relevant documents and Auditors report thereon form part of thisAnnual 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 the Companies

(Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing the details of deposits which are not in compliance withChapter V 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/body corporates and the particulars ofsuch loans falling under the provisions of Section 186 of the Companies Act 2013 areprovided in the notes to financial statements of the Company.

10. Extract of the annual return

The extract of the Annual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished in Annexure ‘I' and is attached to the report.

11. Directors & Key Management Personnel

I. Composition of Board & Board Meetings

The Board of Directors of the Company has an optimum combination of ExecutiveNon-Executive and Independent Directors. As on the 31st March 2020 the Boardcomprises of 5(Five) Directors out of which 2 are Executive Directors and 3 areNon-Executive Independent Directors that includes one Woman Director. The Chairman of theBoard is an executive Director.

The Board of Directors duly met 6 times on 26/04/2019 13/05/2019 30/05/201912/08/2019 14/11/2019 and 03/02/2020 during the year. The Composition category andattendance of each Director at the Board and Annual General Meeting of each Director invarious companies is as follows: -

Name of Director Designation and Category No of Board Meetin gs held during the year No of Board Meetin gs attend ed during the Attenda nce at the AGM
Mr. Satishkumar A Mehta Chairman & Managing Director 6 6 Yes
Promoter
Mr. JayeshkumarA Mehta Whole Time Director 6 6 Yes
Promoter
Mr. Hemendra 6 6 Yes
B Patel
Non-Executive Director
Independent
Mrs. Vinita P 6 6 Yes
Maheshwari
Non-Executive Director
Independent
Mr. Jitendra D Patel 6 6 Yes
Non-Executive Director
Independent

As on 22nd May 2020 Mr. Parimal Patwa were appointed on Board as an as aNon-Executive Non-Promoter and Non-Independent Director and after his appointment theBoard composition is as under: -

Name of Director Mr. Satishkumar A Mehta Designation Chairman & Managing Director Promoter
Mr. Jayeshkumar A Mehta Whole Time Director Promoter
Mr. Hemendra B Patel Non-Executive Director Independent
Mrs. Vinita P Maheshwari Non-Executive Director Independent
Mr. Jitendra D Patel Non-Executive Director Independent
Mr. Parimal Patwa Non-Executive Director Non- Independent

II. INDUCTIONS

During the year Mr. Nayan P. Pitroda a member of Institute of Company Secretaries ofIndia was appointed as the Company Secretary and Compliance Officer of the Companyeffective from 13th May 2019.

Further after end of the financial year Mr. Parimal Patwa were appointed on Board on22nd May 2020 as an as a Additional Non-Executive Non-Promoter andNon-Independent Director.

III. CESSATIONS:

During the year Ms. Barkha Deshmukh resigned as a company secretary and complianceofficer of the company effective from 26th April 2019.

IV. Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and Companies Articles ofAssociation Mr. Jayeshkumar A. Mehta retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. The Board recommends hisre-appointment. Necessary resolution for his reappointment is placed before theshareholder for approval.

V. Familiarization Program of

Independent Directors

The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter along withnecessary documents reports and internal policies to enable them to familiarize with theCompany's procedures and practices. The Company endeavors through presentations atregular intervals to familiarize the Independent Directors with the strategy operationsand functioning of the Company and also with changes in the regulatory environment havinga significant impact on the operations of the Company and the industry as a whole TheIndependent Directors also meet with senior management team of the Company in informalgatherings. During the year 2019-20 the Company has conducted 6 programs forfamiliarizing the Directors for a total duration of 6 hours. The Policy on familiarizationprogram for independent directors role responsibility and rights of independentdirectors is uploaded on www.sdalloys.com.

VI. Profile of Directors seeking appointment / reappointment

As required under regulation 36(3) of SEBI (LODR) 2015 particulars of the Directorsretiring and seeking reappointment and appointment at the ensuing Annual General Meetingis annexed to the notice convening 13th Annual General Meeting.

VII. 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 Director b) Mr. Jayeshkumar A.Mehta Whole Time Director c) Mr. Krishnakant P. Somani Chief Financial Officer d) Mr.Nayan P. Pitroda Company Secretary and Compliance Officer.

VIII.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. 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 reference which is prepared in compliance with Section 177 of the Companies Act2013 and SEBI (LODR) Regulations 2015. The Members of the Committee are: -

Name Category & Position Num ber of meeti ngs held Number of meetings attended
Mr. Jitendrakumar Patel Non-Executive Independent Director Chairman 4 4
Mrs. Vinita Maheshwari Non-Executive Independent Director Member 4 4
Mr. Satishkumar A Mehta Managing Director Member 4 4

Two third of the members are Independent Directors and all the members are financiallyliterate. The composition role functions and powers of the Audit Committee are in linewith the requirements of applicable laws and regulations. The Audit Committee 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 Exchanges and legal requirements concerning financial statements and fixationof audit fee as well as payment for other services etc.

Four Audit Committee meetings were held during the year 2019-20 at the RegisteredOffice of the Company on 30/05/2019 12/08/2019 14/11/2019 and 03/02/2020.

13. Nomination and Remuneration

Committee

The Nomination and Remuneration Committee is constituted in accordance with SEBI (LODR)Regulations 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 Non-Executive Independent Director Chairman 2 2
Mrs. Vinita Maheshwari Non-Executive Independent Director Member 2 2
Mr. Hemendra B Patel Non-Executive Independent Director Member 2 2

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 toremuneration of Directors Key Managerial Personnel and other employees. The said policyis available on the website of the Company (www.sdalloys.com).

Two meeting was held during the year 2019-20 at the Registered Office of the Company on26/04/2019 and 13/03/2019.

14. 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 Committee and the Members of theCommittee are:

Name Category & Position Number of meetings held Number of meetings attended
Mrs. Vinita P Maheshwari Non-Executive Independent Director Chairman 1 1
Mr. HemendrabhaiPatel Non-Executive Independent Director Member 1 1
Mr. Satishkumar A Mehta Managing Director Member 1 1

The Stakeholders Relationship Committee looks into shareholders' complaints related totransfer of shares non-receipts of balance sheet besides complaints from SEBI StockExchanges Court and various Investor Forums. It oversees the performance of theRegistrars 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 investor complaints in a centralized web-basedredress system and online redressal of all the shareholders complaints.

One meeting was held during the year 2019-20 at the Registered Office of the Company on03/02/2020.

15. Compliance Officer

The Compliance officer of the Company is Mr. Nayan P. Pitroda who is also designatedas Company Secretary of the Company.

16. 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 systemadopted by it. Further the Board also regularly in their meetings held for variouspurposes evaluates the performance of all the Directors committees and the Board as awhole. The Board considers the recommendation made by Nomination and RemunerationCommittee in regard to the evaluation of board members and also tries to discharge itsduties more effectively. Each Board member's contribution their participation wasevaluated and the domain knowledge they bring. They also evaluated the manner in which theinformation flows between the Board and the Management and the manner in which the boardpapers and other documents are prepared and furnished.

17. 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.

Due to spread of Novel Corona Virus (COVID-19) our Plant located in Santej Gandhinagrwas dosed from March 23 2020 to April 20 2020 (28 days) however we got permission onApril 20 2020 from concerned authorities subject to fulfilment of certain conditions topartially start production operations. And further as on date of report there is shortageof labors as the labors have returned to their places because of Pandemic.

18. 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 regulators or courts ortribunals impacting the going concerns status and

Company's operations in future.

19. Auditors

1. Statutory Auditors

M/s. Piyush J Shah & Co. Chartered Accountants the Statutory Auditors of theCompany were reappointed at the 09th Annual General Meeting held on 30thSeptember 2016 to hold office from the conclusion of Ninth (9th) Annual GeneralMeeting (AGM) till the conclusion of 14th Annual General Meeting to be held inthe year 2021 (subject to ratification of their appointment at every AGM).

In accordance with the Companies Amendment Act 2017 enforced on 7thMay2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to 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. Secretarial Auditor

M/s. Khandelwal Devesh & Associates Company Secretaries Ahmedabad were appointedas Secretarial Auditor of the Company to conduct secretarial audit pursuant to theprovisions of Section 204 of the Companies Act 2013. The secretarial audit of the Companyhas been conducted on a concurrent basis in respect of the matters as set out in the saidrules and Secretarial Audit Report given by M/s. Khandelwal Devesh & AssociatesCompany Secretaries Secretarial Auditor of the Company forms part of this report and ismarked as Annexure-‘II'.

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

The Company has also undertaken an audit for the FY 2019-20 pursuant to SEBI CircularNo. CIR/CFD/ CMO/I/27/2019 dated 08th February 2019 for all applicable compliances as perthe Securities and Exchange Board of India Regulations and Circular/ Guidelines issuedthereunder. The Report (Annual Secretarial Compliance Report as per Regulation 24A ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015) has been submitted to the Stock Exchanges. The said report is Annexedas

Annexure- ‘III'.

Further as per the provisions of Regulation 24A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 M/s.

Khandelwal Devesh & Associates Company Secretaries had undertaken secretarialaudit of the Company's material subsidiary i.e. Sagardeep Engineers Private Limited forthe FY 2019 20. The Audit Report confirms that the material subsidiary has complied withthe provisions of the Act Rules Regulations and Guidelines and that there were nodeviations or non-compliances.

The Board at its meeting held on 27 July 2020 has re-appointed M/s. KhandelwalDevesh & Associates Company Secretaries as Secretarial Auditor for conductingSecretarial Audit of the Company for FY 2020 21.

20. Personnel

The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in the Report and marked as Annexure- ‘IV'. No employee of the Companywas in receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

21. 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 as Annexure-‘V' to this report.

22. Board Evaluation

The Board carried out an annual performance evaluation of its own performance theperformance of the Independent Directors individually as well as the evaluation of theworking of the Committees of the Board. The performance evaluation of all the Directorswas carried out by the Nomination and Remuneration Committee. The performance evaluationof the Chairman and the Non-Independent Directors was carried out by the IndependentDirectors. Details of the same are given in the Report on Corporate Governance annexedhereto.

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 investment on energy conservation equipment: Nil

B. TECHNOLOGY ABSORPTION: i. the efforts made towards technology absorption: None ii.the benefits derived like product improvement cost reduction product development orimport substitution: None iii. in case of imported technology

(imported during the last three years reckoned from the beginning of the financialyear)- a) the details of technology imported: None b) the year of import: N.A. c) whetherthe technology been fully absorbed: N.A. d) if not fully absorbed areas where absorptionhas not taken place and the reasons thereof:

N.A. e) the expenditure incurred on Research and Development: Nil

C. Foreign exchange Earnings & Outgo

Foreign Exchange Earning: NIL

Foreign Exchange Outgo: NIL

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 management policy as the riskthreatening the business activity carried out by the Company during the year are minimal.

26. Prevention of Sexual Harassment at

Workplace

As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 and rules made thereunder your Company hasconstituted Internal Complaints Committee (ICC) which is responsible for redressal ofcomplaints related to sexual harassment.

Your Directors declared and confirm that during the year under review there is nocase filed under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

27. Vigil Mechanism:

The Company believes in the conduct of its affairs in a fair and transparent manner tofoster professionalism honesty integrity and ethical behavior in its employees &stakeholders. The Company has adopted a Whistle Blower Policy as a part of vigilmechanism.

Also the Code of Business Conduct (Code) lays down important corporate ethicalpractices that shape the Company's value system and business functions and representscherished values of the Company.

28. Adequacy of Internal Financial Control

The Company has designed and implemented a process driven framework for Internal

Financial Controls (‘IFC') within the meaning of the explanation to Section134(5)(e) of the Act. For the year ended March 31 2020 the Board is of the opinion thatthe Company has sound IFC commensurate with the nature and size of its business operationsand operating effectively and no material weaknesses exist. The Company has a process inplace to continuously monitor the same and identify gaps if any and implement new and /or improved controls wherever the effect of such gaps would have a material effect on theCompany's operations.

During the year no reportable material weakness was observed.

29. 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 ended March 312018 the applicable accounting standards have been followed along with proper explanationrelating to material departures.

(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe 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 prepared the annual accounts on a going concern basis.

(e)The directors had laid down internal financial controls to be followed by thecompany and that such internal 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.

30. Listing

The equity shares of the Company are listed on of NSE and the Company has paid theannual listing fees for the year 2020-21.

31. Corporate Governance

Your Company has been complying with the principals of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to regulation15(2) of the SEBI (LODR) Regulations 2015 w.e.f. 25/01/2019 Company's shares are listedon the Mainboard i.e. NSE and therefore the Provisions and Regulations relating toCorporate Governance were effective from said date. The Report on Corporate Governance isattached as Annexure ‘VI'.

32. Installation of New Plant and Machinery into

Existing Line of Business

The Company have completed the installation work for new plant and machinery at itsexisting factory at Plot No. 2070 Rajnagar Patiya Behind GEB Sub-station Santej KhatrajRoad Santej 382721. Tal: Kalol Dist: Gandhinagar which also includes upgradation ofsome of existing machinery. The Company will produce Copper busbar copper strips copperplates copper wire to be used in electric cable. It is to be noted that the Company isalready producing busbar from its existing plant. The new plant and machinery will helpthe company to reduce production cost and also to improve quality. Further details areannexed as Annexure ‘VII'.

33. Secretarial Standards:

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.

34. Acknowledgement:

The Directors place on record their sincere thanks to the Bankers business associatesconsultants customers and employees for their continued support extended to yourCompanies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

Date: 27/07/2020
Place: Santej
For and on behalf of board of directors
Satishkumar A Mehta
Chairman & Managing Director
(DIN: 01958984)

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