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Sanco Industries Ltd.

BSE: 532120 Sector: Industrials
NSE: SANCO ISIN Code: INE782L01012
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Sanco Industries Ltd. (SANCO) - Director Report

Company director report

To

The Members

On Behalf of the Board of Director of your Company it is our privilege to present the30th Annual Report on the business and operations of the company together withthe audited statement of accounts for the financial year ended March 31 2021 andAuditor's Report thereon.

1. FINANCIAL HIGHLIGHTS

The financial performance of your Company are as under:

Standalone

Particulars

(Rupees in Lacs)

2020-21 2019-20
Total Income 267.55 3741.79
Less: Total Expenses 2600.35 3712.46
Profit before Exceptional Items Prior Period Items and Tax 2332.80 29.32
Add: Exceptional Items - -
Less: Prior Period Items - -
Net Profit before Taxation (PBT) 2332.80 29.32
Tax Expense 6.81 0.48
Profit/ (Loss) after Taxation (PAT) (2339.61) 28.85
Provision for proposed Dividend - -
Dividend tax - -
Transfer to General Reserve (Profit for the year and depreciation written back) (2339.61) 28.85

2. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

The Company has suffered a loss of Rs. 2339.61 lacs as on 31.03.2021. However theCompany's management is working towards effective business plans and strategies to improvethe profits in coming years.

3. CHANGE(S) IN THE NATURE OF BUSINESS

During this period there is no change in business of the Company or in thesubsidiaries' business or in the nature of business carried on by them.

4. DIVIDEND

Keeping in view the Company's need for capital and its growth plans the Directors donot recommend any dividend for the year ended March 31 2020.

5. TRANSFER TO RESERVES

The amount to be transferred to reserves during the year is Rs. 2339.61 Lacs.

6. CHANGES IN SHARE CAPITAL

The Company has increased its paid up share capital from Rs. 102810000 to Rs.115120000. Further there is no change in the authorised share capital of the companyduring this financial year.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Following are the directors and KMPs of the company as on date:

1. Mr. Sanjay Gupta (Managing Director)

Brief Description Promoter Graduation from DU MBA
Expertise Marketing and Finance
Name of other Companies where holds directorship NA

2. Mr. Abhishek Jain (Director)

Brief Description B.A.LL.B in 2015 from C.C.S University Post Graduation in Investment Banking and Research from National Stock Exchange
Expertise Investments and Taxations
Name of other Companies where NA
holds directorship

3. Ms. Sonu Kumari (Independent Director)

Brief Description B.A from DU
Expertise Marketing
Name of other Companies where holds directorship NA

4. Mr. Saurabh Gupta (Independent Director)

Brief Description B.com CA DISA
Expertise Audit and Taxation
Name of other Companies where holds directorship NA

5. Mr. Parveen Kumar Maheshwari (Independent Director)

Brief Description Award-winning confident and highly organi entrepreneur with over 25 years in business leadership
Expertise Business formation operation technology a management.
Name of other Companies where holds directorship NA

6. Mr. Nitya Prakash Gupta (Independent Director)

Brief Description Civil Engineer
Expertise Construction business
Name of other Companies where holds directorship NA

7. Ms. Akriti Mahajan Gupta (Company Secretary)

Brief Description B.Com from DU Member of ICSI Law Graduate from I
Expertise Corporate & Listing Compliances Matters
Name of other Companies where holds directorship NA

8. Mr. Anurag Gupta (Chief Finance Officer)

Brief Description Graduate
Expertise Finance Accounts Taxation and Law

8. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB- SECTION (6) OFSECTION 149

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

9. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

The Board of Directors met thirteen times as on 30.06.2020 28.07.2020 24.08.202029.08.2020 23.10.20 13.11.2020 14.12.2020 17.12.2020 11.01.2021 06.02.202112.02.2021 13.03.2021 and 23.03.2021 during the Financial Year ended March 31 2021 andthe maximum gap between any two Board Meetings was less than one Hundred and Twenty days.

10. STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BYTHE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act SEBIListing Regulations and the Guidance Note on Board Evaluation issued by the Securities andExchange Board of India on January 5 2017.

The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. In a separate meeting of independent directorsperformance of non-independent directors the Chairman of the Company and the board as awhole was evaluated taking into account the views of executive directors andnon-executive directors. The Board and the Nomination and Remuneration Committee reviewedthe performance of individual directors on the basis of criteria such as the contributionof the individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.

In the board meeting that followed the meeting of the independent directors and meetingof Nomination and Remuneration Committee the performance of the board its committeesand individual directors was also discussed. Performance evaluation of independentdirectors was done by the entire board excluding the independent director beingevaluated. The performance of all the directors during the year was satisfactory andtowards the growth prospects.

Personnel relations with all employees remained cordial and harmonious throughout theyear. Your Directors wish to place on record their sincere appreciation for the devotedservices of all employees of the Company.

11. DETAILS OF SUBSIDIARY

The Company has only one subsidiary M/s Sanjita Polymet Ltd. (Company incorporated inHong Kong).

M/s Sanjita Polymet Ltd. was incorporated in August 2013 in Hong Kong to promotetrading of PVC Raw Materials and Metal Products in International market. However theCompany has made investment of Rupees 291.77 Lacs in the paid up share capital of M/sSanjita Polymet Ltd. during the year.

During the year the performance of M/s Sanjita Polymet Ltd. is satisfactory.

12. STATUTORY AUDITORS

The existing auditor M/s Gaur & Associates Chartered Accountants has resigned asthe Statutory Auditor of the Company. Accordingly new Statutory Auditor M/s K. G. Sharma& Co Chartered Accountants being eligible is proposed to be appointed as the newStatutory Auditor. Such change in auditor requires shareholders' approval. Accordinglynecessary resolution for appointment of auditors is included in the Notice for thisensuing AGM.

13. COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Amendment Rules 2014 M/s Rahul Jain &Associates has been appointed asCost Auditors for the year 2021-22.

14. SECRETARIAL AUDIT REPORT

There were qualifications/ adverse remarks given by the company secretary in practicein the secretarial audit report. Secretarial audit report is attached to this report.

The Board of Directors have considered all these qualifications/ adverse remarksdiscussed all of them at length and decided to take all corrective measures for the same.

15. RESPONSE TO AUDITOR'S REMARKS

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.

The Board of Directors have considered all these qualifications/ adverse remarksdiscussed all of them at length and decided to take all corrective measures for the same.

16. DISCLOSURE ON EMPLOYEE STOCK OPTION/PURCHASE SCHEME

The Company has not provided any Employee Stock Option Scheme or Purchase Scheme to theemployees.

17. AUDIT COMMITTEE

The details pertaining to the composition of the audit committee are included in theCorporate Governance Report which is a part of this report.

18. VIGIL MECHANISM

As per the provisions of Companies Act 2013 there is a mandatory requirement toestablish a mechanism called 'Vigil Mechanism' for the directors and employees of theCompany to report concern about unethical behaviour actual or suspected fraud orviolation of the company's code of conduct or ethics policy.

The Company has adopted a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees to report concerns about unethical behavior. Noperson has been denied access to the Chairman of the Audit Committee. The said policy hasbeen uploaded on the website of the Company.

19. NOMINATION AND REMUNERATION COMMITTEE

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report.

20. STAKEHOLDERS RELATIONSHIP COMMITTEE

Pursuant to the provisions of Section 178(5) of the Companies Act 2013 a StakeholdersRelationship Committee be constituted the details of the same has been the CorporateGovernance Report which is a part of this report.

21. RISK MANAGEMENT POLICY

The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified byStatutory as well as Internal Auditors.

22. EXTRACT OF THE ANNUAL RETURN

The extract of Annual Return in Form No. MGT-9 as required under Section 92 of theCompanies Act 2013 for the financial year ending March 31 2021 is annexed hereto asAnnexure A and forms part of this report.

23. 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 is no material changes occurred subsequent to the close of the financial yearended 31.03.2021 affecting the financial position of the Company.

24. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE

No such order passed by any regulatory authority Courts or Tribunals impacting thegoing concern status and company's operations in future during the period under review.

25. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOTHE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

26. DEPOSITS

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.

27. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

There were no loans made by the Company under Section 186 of the Companies Act 2013during the year under review. However the Company has the following investments as on31.03.2021:

S. No Name of investee Nature of Investment Equity Shares Amount (in Rs.Lacs)
1 Sanjita Polymet Ltd Wholly owned Subsidiary Co. 450000 291.77

Further the Company has given Corporate Gaurantee to its wholly owned subsidiarySanjita Polymet Limited of Rs. 20 lacs USD on 29.10.2015. However the limit(loan) forwhich this guarantee was given stands NIL as on date. Accordingly the guarantee standsrevoked.

28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has entered into related party transactions as per Section 188 of the Actas detailed in AOC 2 attached as Annexure B which are within the limits approved by theBoard Audit Committee and Members.

29. CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance.

The Company adheres to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance practices and Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. Report on Corporate Governancefor the year ended March 31 2020 forms part of the Annual Report.

30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Statement on the Company's performance industrytrends and other material changes with respect to the Company is presented in a separatesection forming part of annual Report.

31. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION143

During the year the company has reported no frauds.

32. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION&REDRESSAL) ACT 2013

During the Period no cases has been reported under Sexual Harassment of Women atWorkplace.

33. CORPORATE SOCIAL RESPONSIBILITY(CSR) AND ITS TERMS OF REFERENCE

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

A. CONSERVATION OF ENERGY

I. Energy conservation measures taken

Conservation of energy is given top priority by the Company. During the year theCompany has taken following measures towards energy conservation:

Organizing the operating procedures in such a way that energy losses are minimized byeliminating idle running. This has helped in reducing Energy per unit.

Optimization of electrical load by matching motor power capacity to the exactoperational requirements.

II. Additional Investment and proposals if any being implied for reduction ofconsumption energy.

At present the company has no proposal for additional investment for reduction ofconsumption of energy.

III. Impact of measures at (I) (II) above for reduction of energy consumptionimpacting the cost of production of goods.

The measures adopted by the company for energy conservation have been instrumental inbringing down the cost of energy per unit of production in addition to improving quality.

B. TECHNOLOGY ABSORPTION

Effects made in technology absorption in prescribed form-B Research & Development(R & D)

The company is carrying research & development in routine manufacturing activities.There is no specific expenditure in research & development.

TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION

The company has already absorbed technology fully.

C. FOREIGN EXCHANGE EARNING & OUTGO (In Rs. Lacs)

Foreign Exchange Out goes: Nil
Foreign Exchange earning Nil

35. REMUNERATION

Details under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014

S. No Name Designation Ratio to median remuneration
1 Mr. Sanjay Gupta Managing Director NIL
2 Ms. Rita Gupta Director NIL
3 Mr. Sidhant Gupta Director NIL
4 Mr. Saurabh Gupta Non-Executive & Independent Director NIL
5 Mr. Parveen Kumar Maheshwari Non-Executive & Independent Director NIL
6 Ms. Sonu Kumari Non-Executive & Independent Director NIL
7 Mr. Anil Bakshi Non-Executive & Independent Director NIL
8 Mr. Nitya Prakash Gupta Non-Executive & Independent Director NIL
9 Ms. Akriti Mahajan Company Secretary 1:8
10 Ms. Mansi Gupta Chief Financial Officer(till 15.10.2020) 1:10
11 Mr. Anurag Gupta Chief Financial Officer(from 16.10.2020) 1:10

Further there are 103 permanent employees on the rolls of company:

• Work Place – 5

• Corporate Office - 8

36. PARTICULARS OF EMPLOYEES

Employees was drawing in excess of the limits by the Companies Act 2013 read with theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 whichneeds to be disclosed in the directors' report.

Details of Top 10 Employees as per Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014:

NIL

37. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(5) of the Companies Act 2013 your Directorsstate that:

a. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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;

c. The directors had 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 had prepared the annual accounts on a going concern basis; and

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

f. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

38. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation for significantcontribution made by the Company's executives staff and workers through their deep senseof dedication hard work and commitment and the trust reposed on us by our customers inthe overall growth and prosperity of the Company.

We also acknowledge the support and wise counsel extended to us by the analystsfinancial institutions bankers Government authorities customers vendor shareholdersinvestors and members at large. We look forward to having the same support in our futureendeavours.

The Company will make every effort to meet the aspirations of its Shareholders and wishto sincerely thank them for their whole hearted co-operation and support at all times.

For Sanco Industries Limited
Sd/- Sd/-
Sanjay Gupta Abhishek Jain
Managing Director Director
DIN - 00726005 DIN - 07432343
R/o C-56 Block-C R/o C-56 Block-C
Surajmal Vihar Delhi - 110092 Surajmal Vihar Delhi - 110092
Date: 03.09.2021
Place: New Delhi

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