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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 12thAnnual Report along withAudited Financial Statements of your Company for the financial year ended 31stMarch 2019.

1. Financial Results

During the year under review your Company has achieved a total net sale of Rs.5108.87lakhs and achieved Net Profit after Tax (NP) of Rs.172.89lakhs. 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 2018-19 are as under:

(Rs. in Lakhs)

Particulars for the year ended March 31 2019 March 31 2018
Net revenue from Operations (Sales) 5108.87 6240.59
Profit Before Depreciation and Tax 250.92 117.73
Less: Depreciation 40.61 39.56
Profit Before Tax 210.31 78.17
Less: Tax Expense 60.92 23.34
Profit After Tax 172.89 54.53
EPS (Basic) 1.52 0.48
EPS (Diluted) 1.52 0.48

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 2019.

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 Year2018-2019.

5. Reserves

The Company has not transferred any amount to the reservesduring the current financialyear.

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 2018-19 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

Financial Statements along with all relevant documents and Auditors report thereon formpart 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 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 date of this report 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 5 times on 28/05/2018 30/08/2018 01/11/201828/02/2019 and 30/03/2019 during the year. The Composition category and attendance ofeach Director at the Board and Annual General Meeting of each Director in variouscompanies is as follows: -

Name of Director Designation and Category No of Board Meeti ngs held during the year No of Board Meeti ngs atten ded durin g the year Att end anc e at the AG M
Mr. Satishkumar A Mehta 5 5 Yes
Chairman & Managing Director
Promoter
Mr. JayeshkumarA 5 5 Yes
Mehta
Whole Time Director Promoter
Mr. Hemendra B Patel 5 4 Yes
Non-Executive Director Independent
Mrs. Vinita P 5 5 Yes
Maheshwari
Non-Executive Director Independent
Mr. Jitendra D Patel 5 5 Yes
Non-Executive Director Independent

II. INDUCTIONS

The following appointments were made

During the year no inductions done however Mr. NayanP. Pitroda a member of Instituteof Company Secretaries of India was appointed as the Company Secretary and ComplianceOfficer of the Company effective from13th May 2019.

III. CESSATIONS:

During the year no cessations was done howeverMs. Barkha Deshmukh resigned as a companysecretary and compliance officer 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. SatishkumarA Mehta (DIN-01958984) 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 re-appointment is placedbefore the shareholder for approval.

V. Familiarisation Programme 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 2018-19 the Company has conducted 4 programs forfamiliarizing the Directors for a total duration of 6 hours.

VI. 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 ensuing Annual General Meeting is annexed to thenotice convening 12th 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. KrishnakantP.Somani Chief Financial Officer d)Mr.NayanP.Pitroda Company Secretary and Compliance Officer.

VIII.Declaration from Independent Director

All the Independent Directors of the Company have given their declarationsstating 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 2013 read with theCompanies (Management and Administration) Rules 2014 (including any statutoryamendment(s) or re-enactment(s) made thereunder) your Company passed the followingresolution through postal ballot as per the details below:

Date of Postal ballot Notice:01/11/2018

Date of declaration of result:06/12/2018

Voting period:05/11/2018 to 04/12/2018

Date of approval: 04/12/2018

Name of resoluti on Type of resolu tion No. of votes polled Votes favor No Votes cast in of % Votes against No of Vot es cast %
Migration of Listing/tr ading of Equity Shares of the Company from NSE SME Platform Special 9109600 9109600 80.11 100 0.00

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 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 4 4
Non Executive Independent Director
Chairman
Mrs. Vinita Maheshwari 4 4
Non Executive Independent 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 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.

FourAudit Committee meetings were held during the year 2018-19 at the Registered Officeof the Company on 28/05/2018 30/08/2018 01/11/2018 and 28/02/2019. The Company Secretaryacts as Secretary to the Audit Committee and no personnel has been denied access to theAudit Committee.

14. 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 meeting s held Number of meetings attended
Mr. Jitendrakumar 1 1
Patel
Non Executive Independent Director
Chairman
Mrs. Vinita Maheshwari 1 1
Non Executive Independent Director
Member
Mr. Hemendra B Patel 1 1
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 toremuneration of Directors Key Managerial Personnel and other employees. The said policyis available on the website of the Company (www.sdalloys.com).

One meeting was held during the year 2018-19 at the Registered Office of the Companyon28/05/2018.

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 Committee and the Members of theCommittee are:

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

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 2018-19 at the Registered Office of the Companyon28/05/2018.

16. Compliance Officer

The Compliance officer of the Company is Mr. NayanP.Pitroda who is also designated asCompany Secretary 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 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 contributiontheir participation was evaluated and the domain knowledgethey bring. They also evaluated the manner in which theinformation flows between the Boardand the Management and the manner in which the board papers and otherdocuments areprepared 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 regulators 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 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 thesaidrules and Secretarial Audit Report given by M/s. Khandelwal Devesh & AssociatesCompany Secretaries SecretarialAuditor 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 CompanySecretaries 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 Managerial Personnel) Rules 2014is provided in the Report and marked as Annexure-III.Noemployee of the Company wasin receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of theCompanies (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 as Annexure-"IV"to this report.

23. Corporate Social Responsibility (CSR)

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

24. Migration to Main Board

The Company has been shifted to the main board of NSE from NSE Emerge w.e.f.25/01/2019.

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

A. CONSERVATION OF ENERGY:

i. the steps taken or impact on conservation of energy: Nil

ii. 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 developmentor import substitution: None

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

a) the details of technology imported :None

b) the year of import :N.A.

c) whether the techno33logy been fully absorbed : N.A.

d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof : 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 atWorkplace (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 2019 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 2018-19.

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 the compliance with the corporate governanceprovisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C D and E of schedule V shall not apply to the listed entity which haslisted its specified securities on the SME Exchange.

However w.e.f. 25/01/2019 Company's shares are listed on the Mainboard i.e. NSE andtherefore the Provisions and Regulations relating to Corporate Governance were effectivefrom said date. The Report on

Corporate Governance is attached as

Annexure V.

32. Secretarial Standards:

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

33. 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: 12/08/2019

Place: Santej (Kalol)

For and on behalf of board of directors

Satishkumar A Mehta

Chairman & Managing Director

(DIN: 01958984)