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Sanathnagar Enterprises Ltd.

BSE: 509423 Sector: Infrastructure
NSE: BAKELHYLAM ISIN Code: INE367E01033
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NSE 05:30 | 01 Jan Sanathnagar Enterprises Ltd
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VOLUME 300
52-Week high 16.69
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 2
Buy Price 7.41
Buy Qty 15.00
Sell Price 7.53
Sell Qty 1257.00
OPEN 7.40
CLOSE 7.40
VOLUME 300
52-Week high 16.69
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 2
Buy Price 7.41
Buy Qty 15.00
Sell Price 7.53
Sell Qty 1257.00

Sanathnagar Enterprises Ltd. (BAKELHYLAM) - Director Report

Company director report

Dear Members

The Directors are pleased to present the 72nd Annual Report of the Companyalong with the audited financial statements for the financial year ended March 31 2019.

FINANCIAL HIGHLIGHTS

Particulars 2018-19 2017-18
Revenue from operations 66.45 488.29
Total Income 71.73 615.83
Finance costs 1.80 6.76
Total Expenditure 155.34 763.06
Loss before tax (83.61) (147.23)
Tax Expenses - (24.96)
Other Comprehensive Income under IND AS - 0.13
Total Comprehensive Income (83.61) (172.06)

REVIEW OF PERFORMANCE AND FUTURE OUTLOOK

Revenue from operations reduced during the financial year 2018-19 on account of sale ofbalance inventory in the Company's Hyderabad project. The Company incurred a loss of Rs83.61 lakhs during financial year 2018-19 as against a loss of Rs 172.06 lakhs during theprevious financial year.

The Company's project at Hyderabad is fully completed. The Company is evaluatingvarious other business opportunities in the real estate space.

DIVIDEND AND RESERVES

The Board does not recommend any dividend for the financial year under review in viewof the losses sustained during the year. No amount is proposed to be transferred to anyreserves during the year.

CORPORATE MILESTONES

1. The suspension in trading of the Company's securities was revoked by BSE Limited onApril 25 2018 which was effective from May 3 2018.

2. In order to achieve minimum public shareholding ("MPS") by the CompanySiddhnath Residential Paradise Private

Limited a promoter of the Company ("Promoter") undertook an Offer For Sale("OFS") of 545540 equity shares of Rs.

10/- each representing 17.32% of the share capital of the Company. Pursuant to theOFS your Company is now compliant with the MPS norms and is also in compliance with therequirements of Regulation 38 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations"). Post OFS the public shareholding of your Company has increased from7.68% to 25% whereas the promoter shareholding has reduced from 92.32% to 75%. SEBI passedan order dated June 12 2018 thereby vacating the restrictions imposed by the SEBI MPSOrders dated May 4 2013 and September 29 2015.

3. SEBI Settlement order

At the request of the Company SEBI issued a notice of settlement dated June 19 2018("Settlement Notice") under Regulation 14A of Chapter VIA of the Securities andExchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations2014 ("SEBI Settlement Regulations") relating to the delay in compliance withMPS requirements by SEL from June 4 2013 to May 21 2018. SEBI pursuant to theSettlement Notice directed SEL to le a settlement application and pay a settlement amountof Rs 5.85 lakhs ("Settlement Amount"). SEBI on June 28 2018 passed the nalsettlement order.

ANNUAL RETURN

As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for financial year 2018-19 is given in Annexure I inForm MGT-9 which is a part of this report.

CHANGES IN SHARE CAPITAL

There was no change in the authorized and paid-up share capital of the Company duringfinancial year 2018-19.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms Sanjyot Rangnekar and Mr Mayank Jain were appointed as Additional Directors witheffect from May 15 2019 and June 11 2019 respectively on recommendation of theNomination & Remuneration Committee and hold office upto the date of the forthcomingAnnual General Meeting. Notice under section 160(1) of the act have been received frommembers signifying their intention to propose their appointment as Directors. Resolutionsfor their appointment as Directors form part of the accompanying Annual General Meetingnotice.

Mr. Sumit Kumar Jain was appointed as Additional Director with effect from August 72018. His appointment was not put up to the shareholders at the Annual General Meetingheld on September 24 2018 and therefore his office s tood vacated as on that date.

Mr. Manoj Vaishya was appointed as Additional Director with effect from October 302018 and resigned as Director on June 10 2019. Ms. Purnima Pavle resigned as Directorwith effect from May 8 2019. The Board places on record its appreciation for the servicesrendered by them during their tenure as Director.

Mr Maninder Chhabra resigned as Manager w.e.f. June 19 2019. Mr Martin Godard wasappointed as Manager w.e.f. August 9 2019. The relevant resolution for approval ofappointment of Mr. Martin Godard forms part of the accompanying Annual General MeettingNotice.

Mr. Vishal Ghadigaonkar resigned as Chief Financial Officer w.e.f. October 30 2018.Mr. Sumit Kumar Jain was appointed as Chief Financial Officer with effect from the same

In terms of Section 203 of the Act the following are the Key Managerial Personnel ofthe Company as on the date of this report:

Mr. Martin Godard Manager

Mr. Sumit Kumar Jain Chief Financial Officer

Mr. Hitesh Marthak Company Secretary

The Company has received declarations under section 149 of the Act from all independentdirectors con rming that they meet the criteria of independence prescribed under the Actand the Listing Regulations.

None of the Non-Executive Directors had any pecuniary relationship or transaction withthe Company which could potentially conflict with the interests of the Company at large.

BOARD AND BOARD COMMITTEES

Board Meetings

Four Board meetings were held during the year; on May 18 2018 August 7 2018 October30 2018 and January 23 2019. The gap between two meetings did not exceed 120 days.

All Directors attended all meetings which they were eligible to attend during the year

Independent Directors' Meeting

In compliance with Schedule IV to the Act (Code for Independent Directors) and theListing Regulations the Independent

Directors of the Company met separately during the financial year 2018-19.

Board Committees

The Board has constituted four committees as on March 31 2019.

Audit Committee

As on March 31 2019 the Audit Committee comprised Mr. Bhushan Shah Chairman Mr.Vinod Shah both independent directors and Ms Purnima Pavle. All Members of the Committeehave relevant experience in financial matters. Senior executives are invited toparticipate in the meetings of the Committee as and when necessary. The Manager and theChief

Financial Officerare permanent invitees to the meetings and the Company Secretary actsas Secretary to the Committee. The terms of reference of the Audit Committee are in linewith the provisions of Section 177 of the Act and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015.

The Audit Committee met four times during the year; on May 18 2018 August 7 2018October 30 2018 and January 23 2019.

All Directors attended all meetings which they were eligible to attend during the year

Nomination & Remuneration Committee

As on March 31 2019 the Nomination & Remuneration Committee comprised Mr. BhushanShah Chairman Mr. Vinod Shah and Mr. Manoj Vaishya. The terms of reference of theCommittee are in line with the provisions of Section 178 of the Act and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.

The Committee met three times during the year; on May 18 2018 August 7 2018 andOctober 30 2018. All Directors attended all meetings which they were eligible to attendduring the year

Corporate Social Responsibility Committee

As on March 31 2019 the CSR Committee comprised Ms Purnima Pavle Chairperson Mr.Bhushan Shah Chairman and

Mr. Vinod Shah. The Committee met once during the financial year; on May 18 2018.

All Directors attended all meetings which they were eligible to attend during the year

Details required under the Companies (Corporate Social Responsibility Policy) Rules2014 are given in the CSR Report appended at Annexure II to this Report. The Boardhas adopted a CSR Policy which is available on the Company's website atwww.sanathnagar.in. Salient features of the Policy are set out in Annexure III tothis Report.

Stakeholders' Relationship Committee

As on March 31 2019 the Stakeholders' Relationship Committee comprised Mr. BhushanShah Chairman Mr. Vinod Shah and Mr. Manoj Vaishya. The Committee met four times duringthe year; on May 18 2018 August 7 2018 October 30 2018 and January 23 2019.

All Directors attended all meetings which they were eligible to attend during the year

BOARD EVALUATION

The Board carried out an annual evaluation of its own performance board committeesand individual directors pursuant to the provisions of the Act and the SEBI Listingregulations. Performance of the board was evaluated after seeking inputs from all thedirectors on the basis of criteria such as board composition and structure effectivenessof board processes information and functioning etc. The performance of the committeeswas evaluated by the Board after seeking inputs from the committee members. The Board andthe Nomination and Remuneration Committee reviewed the performance of individual directorson the basis of criteria such as the contribution of the individual director to the boardand committee meetings. In a separate meeting of independent directors performance ofnon-independent directors and the board as a whole was evaluated taking into account theviews of executive directors and non-executive directors. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.

POLICY ON NOMINATION & REMUNERATION OF DIRECTORS KMPS & OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withPart D of Schedule II to the Listing

Regulations the NRC is responsible for formulating the criteria for determining qualications positive attributes and independence of a Director. The NRC is also responsiblefor recommending to the Board a policy relating to remuneration of Directors KeyManagerial Personnel and other employees. In line with this requirement the Board hasadopted a Nomination and Remuneration Policy which is available on the Company's websiteat www.sanathnagar.in. Salient features of the Policy are reproduced in Annexure IVto this Report.

AUDITORS & AUDITOR'S REPORTS

Statutory Auditor

MSKA & Associates (F.K.A. MZSK & Associates) Chartered Accountants (FirmRegistration No. 105047W) the statutory auditors of your Company hold office until theconclusion of the 74th AGM to be held in the year 2021.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and

Remuneration of Managerial Personnel) Rules 2014 Shravan A. Gupta & AssociatesPracticing Company Secretary was appointed as Secretarial Auditor to conduct a secretarialaudit for the financial year 2018-19.

Cost records and cost audit

D. C. Dave & Co Cost Accountants were appointed as Cost auditors to audit the costrecords of the Company for financial year 2018-19. The requirement for maintaining costrecords or appointing a cost auditor is however not applicable for

financial year 2018-19 as the prescribed applicability criteria were not met as onMarch 31 2019.

Auditor's Reports

The Statutory Auditor's Report for financial year 2018-19 does not contain any qualications reservations or adverse remarks. The Auditor's report is enclosed with thefinancial statements with this Annual Report.

The Secretarial Audit Report for financial year 2018-19 does not contain any qualications reservations or adverse remarks. The Secretarial Audit Report is provided in AnnexureV of this Report.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The Company is in the business of providing "infrastructural facilities" asdefined in Schedule VI of the Companies Act 2013 and therefore the provisions of Section186 are not applicable to any loan made guarantee given or security provided by theCompany in terms of exemption provided u/s 186. Particulars of investments made by theCompany are provided in the financial statements which may be read in conjunction withthis Report.

RELATED PARTY TRANSACTIONS

The transactions/contracts/arrangements falling within the purview of provisions ofSection 188(1) of the Companies Act

2013 entered by the Company with related parties as defined under the provisions ofSection 2(76) of the Companies Act 2013 during the financial year under review were inthe ordinary course of business and have been transacted at arm's length basis.

Further there are no transactions/contracts/arrangements entered by the Company withrelated party(ies) as defined under the provisions of Section 2(76) of the Companies Act2013 during the financial year that are required to be reported in Form

AOC-2 and as such; it does not form part of the Report.

HOLDING COMPANY SUBSIDIARIES JOINT VENTURE AND ASSOCIATES

The Company is a subsidiary of Siddhnath Residential Paradise Private Limited which isa subsidiary of Macrotech Developers Limited. The ultimate holding company is SambhavnathInfrabuild and Farms Private Limited. During the year under review the Company did nothave any subsidiary joint ventures or associate companies.

MANAGEMENT AND INTERNAL CONTROLS

Risk Management

Your Company has robust process in place to identify key risks and to prioritizerelevant action plans to mitigate these risks. Your Company has adopted a Risk Managementpolicy which is based on three pillars: Business Risk Assessment

Operational Controls Assessment and Policy Compliance processes. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis.

Internal Controls and their adequacy

The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of operations. These systems are routinely tested andcertified by the Statutory as well as the Internal Auditor and cover all offices sitesand key business areas. Significant audit observations and follow up actions thereon arereported to the Board/ Audit Committee. The Board / Audit Committee reviews adequacy andeffectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompany's risk management policies and systems. These systems provide a reasonableassurance in respect of financial and operational information complying with applicablestatutes safeguarding of assets of the Company prevention & detection of fraudsaccuracy & completeness of accounting records and ensuring compliance with corporatepolicies.

Vigil Mechanism

Your Company provides a common platform to its employees and directors for complainthandling in the form of whistle-blowing (vigil) mechanism. The Company has established avigil mechanism process by adopting a Vigil Mechanism / Whistle Blower Policy fordirectors and employees. This policy outlines the procedures for reporting handlinginvestigating and deciding on the course of action to be taken in case inappropriateconduct / behaviour is/are noticed reported or suspected. The Policy provides foradequate safeguards against victimization of persons who use the mechanism and has aprocess for providing direct access to the Ombudsman in appropriate or exceptional cases.

The employees of the Company have the right to report their concern or grievance to theChairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations. The Vigil Mechanism/ Whistle Blower Policy is posted on the Company's website www.sanathnagar.in.

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) 2014 is not relevant tothe company as the company has no employee directors do not draw any remuneration otherthan sitting fees and key managanal personnel have been deputed by the holding company.

The provisions of Section 197(12) of the Act read with rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendeddo not apply as there are no employees who draw remuneration in excess of the limits setout in the said Rules.

DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure VI to this report. There was no foreign exchange earningsor outgo during the financial year 2018-19.

CORPORATE GOVERNANCE REPORT

As the paid up equity share capital and networth of the Company are below the limitsspecified in Regulation 15 of the Listing Regulations the Company is not required tofurnish a report on corporate governance and therefore the same does not form part of thisReport.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of the Listing Regulations is given separatelywhich may be taken as forming a part of this Report.

Your Directors state that for the financial year ended March 31 2019 no disclosure isrequired in respect of the following items and accordingly confirm as under:

a. The Company has neither revised the financial statements nor the Board's report. b.As there are no employee the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 is not applicable to the Company.

c. There are no material changes or commitments affecting the financial position of theCompany between March 31 2019 and the date of this report.

d. The Company has not accepted any deposits during financial year 2018-19. e. Noinstance of fraud has been reported to the Board by the Auditors or any other person.

f. No significant or material orders which impact the going concern status andCompany's operations in future were passed by Regulators/Courts/Tribunals.

g. There was no change in the nature of the business of the Company during thefinancial year 2018 -19. h. There was no issue of equity shares with differential rightsas to dividend voting or otherwise during the financial year 2018-19.

i. The Company has not issued any shares (including sweat equity shares) to itsemployees under any scheme during the financial year 2018-19.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirms that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there are no material departures;

b. Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

d. the Directors had 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; and

f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for the assistance andsupport extended by all stakeholders.

For and on behalf of the Board
Sanathnagar Enterprises Limited
Date : August 9 2019 Sanjyot Rangnekar Mayank Jain
Place : Mumbai Director Director
DIN: 07128992 DIN: 08478113