SANGINITA CHEMICALS LIMITED
Your Directors take pleasure in presenting the SIXTEENTH Annual Report of theCompany together with the Audited Accounts for the financial year ended on 31stMarch 2021.
The brief financial results are as under:
(Rs. In lakhs)
|Particulars ||2020-21 ||2019-20 |
|Gross Revenue from Operation ||16466.06 ||15978.08 |
|Add: Job work ||- ||- |
|Other income ||35.97 ||22.62 |
|Total revenue ||16502.03 ||16000.70 |
|Profit/(Loss) before Depreciation and Tax ||138.36 ||524.70 |
|Less: Depreciation ||66.15 ||74.69 |
|Profit/(Loss) Before Tax and Extra Ordinary Items ||102.21 ||450.01 |
|Less: Extra Ordinary Items ||Nil ||Nil |
|Less: Current Tax ||26.56 ||114.66 |
|Deferred Tax ||(0.61) ||(1.27) |
|Profit/(Loss) After Tax ||76.26 ||336.62 |
|Add: previous year Profit/(Loss) ||1502.67 ||1166.05 |
|Balance Carried to Balance Sheet ||1578.93 ||1502.67 |
The Gross revenue from operations including job work of the Company for the year2020-21 has increased from Rs. 15978.08 Lakhs to Rs. 16466.06 Lakhs. However profitbefore Depreciation and Tax stands decreased from Rs. 524.70 Lakhs toRs.168.34 Lakhs.TheCOVID-19 pandemic had severe impact on the business globally. This resulted in theslowdown in the production and profitability of Company during 2020-21. Due to continuedand prolonged effects of COVID-19 there has been economic effects resulting intovolatility and uncertainty. However if the impact of COVID 19 get stabilized and/orsubsided the same may be expected to result into normal business operations in the nextcouple of years.
SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:
The Company does not have any Subsidiary Companies or Joint Venture Company orAssociate Company.
MATERIAL CHANGES AND COMMITMENT:
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of financial year of the Company to which thefinancial statements relate and the date of the report.
REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:
During the year the financial statement or report was not revised. Hence furtherdetails are not applicable.
In order to conserve resources your Directors express their inability to declare anydividend.
TRANSFER TO RESERVE:
Your Directors find it prudent not to transfer any amount to General Reserve.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mrs. Hansaben D.Chavada (DIN: 00479505) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered herself to be re-appointed as Director ofthe Company. The Board recommends the re-appointment of Mrs. Hansaben D. Chavada asDirector of the Company liable to retire by rotation.
Mr. Jignesh Gandhi was appointed as Company Secretary of the Company w.e.f. 31stAugust 2019 and resigned as Company Secretary w.e.f. 7th March 2020. ThenMs. Saroj Jagetia was appointed as Company Secretary of the Company w.e.f. 1st September2020.
UTILISATION OF ISSUE PROCEEDS:
As reported earlier the Company has fully deployed the entire funds of Rs. 1004.52Lacs received through the public offer as per the objects of the issue specified in thesaid offer document.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed:
1. that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
2. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
3. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
4. that the Directors had prepared the annual accounts on a going concern basis; and
5. that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS:
The Company has complied with applicable Secretarial Standards during the year underreview.
FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirement) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of Audit and Nomination & Remuneration Committees based onthe criteria and framework adopted by the Board.
NUMBER OF MEETINGS OF BOARD:
The Board of Directors duly met 5 (Five) times on 18th June 2020 1stSeptember 2020 10th November 2020 31st December 2020 and 29thJanuary 2021.
The Company has received necessary Declaration from each Independent Director/s undersection 149(7) of the Companies Act 2013 that they meet the criteria of Independence laiddown in section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board of Directors is of the opinion thatthe Independent Directors fulfils the criteria of independence and are independent fromthe management of the Company.
Regarding proficiency the Company has adopted requisite steps towards the inclusion ofthe names of all Independent Directors in the data bank maintained with the IndianInstitute of Corporate Affairs Manesar (IICA'). Accordingly all the IndependentDirectors of the Company have registered themselves with IICA for the said purpose. Interms of Section 150 of the Act read with the Companies (Appointment & Qualificationof Directors) Rules 2014 as amended vide Notification No. GSR.774(E) dated 18.12.2020since majority of the Independent Directors of the Company have served as Directors for aperiod of not less than three (3) years on the Board of Listed Company as on the date ofinclusion of their names in the database except Mr. Pramodsinh Dabhi they are notrequired to undertake online proficiency self-assessment test. Mr. Pramodsinh D. Dabhi hasinformed the Company that he will undertake the online assessment test before the duedate.
ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEESTOCK OPTION SCHEME:
During the year the Company has not issued any equity shares with differential votingrights or sweat equity shares or shares under employee stock option scheme. Hencedisclosure regarding the same is not given.
M/s. Devpura Navlakha & Co Chartered Accountants the existing auditors of theCompany were appointed as Auditors of the Company at the 14th AGM for holdingthe office from the conclusion of that 14th AGM till the conclusion of 19thAGM. At the same AGM any one of the Directors of the Company was authorized to fixthe remuneration of the Statutory auditors.
In view of the Companies (Amendment) Act 2017 the first proviso in sub-section (1)in section 139 of the Companies Act 2013 has been omitted with effect from 7thMay 2018. In view of this the said appointment of auditor is no longer required to beratified by the members at every annual general meeting.
The Board has duly reviewed the Statutory Auditor's Report on the Accounts. Theobservations comments and notes of the Auditor are self-explanatory and do not call forany further explanation /clarification.
COST AUDITORS AND COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee appointed M/s. A G Tulsian & Co. CostAccountants as the Cost Auditors of the Company for the financial year 2020-21. M/s AGTulsian & Co. have confirmed that their appointment is within the limits of thesection 139 of the Companies Act 2013 and have also certified that they are free from anydisqualifications specified under Section 141 of the Companies Act 2013.
The Audit Committee has also received a certificate from the Cost Auditor certifyingtheir independence and arm's length relationship with the Company. The Cost Audit Reportfor the financial year 2019-20 was filed with the Ministry of Corporate Affairs on 16thJuly 2020.
As required under the Companies Act 2013 the remuneration payable to the Cost Auditoris required to be placed before the Members in the General Meeting for their ratification.Accordingly necessary resolution seeking Member's approval for ratification ofremuneration payable to the Cost Auditor was approved by the members of the Company at the13th Annual General Meeting held on 28th September2018.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Company has appointedM/s. Manoj Hurkat & Associates firm of Company Secretaries in Practice to undertakeSecretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-1". AUDIT COMMITTEE:
The Audit Committee consists of the following Directors:
|1. Mr. Jagdishkumar Thakor ||Chairperson |
|2. Mr. Faiyazkhan Pathan ||Member |
|3. Mr. Vijaysinh Chavda ||Member |
|NOMINATION & REMUNERATION COMMITTEE: || |
|The Nomination and Remuneration Committee consists of the following Directors: || |
|1. Mr. Faiyazkhan Pathan ||Chairperson |
|2. Mr. Jagdishkumar Thakor ||Member |
|3. Mrs. Hansaben Chavada ||Member |
|STAKEHOLDERS RELATIONSHIP COMMITTEE: || |
|The Stakeholders Relationship Committee consists of the following Directors: || |
|1. Mr. Faiyazkhan Pathan ||Chairperson |
|2. Mr. Jagdishkumar Thakor ||Member |
|3. Mr. Vijaysinh Chavda ||Member |
RISK MANAGEMENT POLICY/PLAN:
It may please be noted that as per the applicable requirement of Companies Act 2013 arisk management policy/plan of the Company is developed and implemented for creating andprotecting the Shareholder's value by minimizing threats or losses and to identify andprovide a framework that enables future activities of a Company to take place in aconsistent and controlled manner.
The Company has a vigilmechanism for its directors and employees to deal within stanceof fraud/mismanagement if any and to report concerns about unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Thedetails of the policy are posted on the website of the Company.
CODE OF BUSINESS CONDUCT AND ETHICS:
The Company has laiddown a Code of Conduct (COC) which is applicable to all the Boardmembers and Senior Management of the Company. The COC is available on the website of theCompany www.sanginitachemicals.co.in. All the members of the Board and Senior Managementhave affirmed compliance with the Code.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment measures in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. During the year there were no complaints received under thesaid act. The Company has complied with all the applicable provisions of the said Actincluding the constitution of internal complaints committee.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
The Company's shareholders may refer the Company's website for the detailed Nomination& Remuneration Policy of the Company on the appointment and remuneration of Directorsincluding criteria for determining qualifications positive attributes independence of aDirector; and other matters provided under sub-section(3) of section 178.
The Company's remuneration policy is directed towards rewarding performance based onreview of achievements periodically. The remuneration policy is inconsonance with theexisting industry practice.
ANALYSIS OF REMUNERATION:
The details of remuneration paid to Directors and Key Managerial Personnel is given inextract of Annual Return attached with this report.
Disclosure/details pursuant to provisions of Section 197(12) of the Companies Act 2013read with Companies (appointment and Remuneration of managerial personnel) Rules 2014 aregiven as follows:
|Names and Positions ||[A] Ratio of Directors' Remuneration to the median Remuneration of Employees ||[B] Percentage (%) increase in Remuneration |
|Mr. Dineshsinh B. Chavada (Chairperson & Managing Director) ||5.56 ||Nil |
|Mr. Vijaysinh D. Chavda (Whole Time Director) ||5.00 ||Nil |
|Mrs. Hansaben D. Chavada (Director) ||1.67 ||Nil |
|Mr. Faiyazkhan Y. Pathan (Independent Director) ||Nil ||Nil |
|Mr. Jagdishkumar V. Thakor (Independent Director) ||Nil ||Nil |
|Mr. Pramodisnh D. Dabhi (Independent Director) ||Nil ||Nil |
The median remuneration of employees of the Company during the financial year was Rs.108000/- p.a.
|[C] Percentage increase/(decrease) in the median Remuneration of Employees ||(16.28%) |
|[D] Number of permanent Employees on the rolls of Company ||29 (Twenty-Nine) |
|[E] Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof ||There was decrease of 4.29% in the average salaries of employees other than managerial personnel in the year 2020-21. There was increase of 10% in the Managerial Remuneration in the year 2020-21 as compared to the year 2019-20. There was no change in the remuneration to the CFO and CS in the year 2020-21. |
It is hereby affirmed that the remuneration is as per remuneration policy of theCompany.
PARTICULARS OF EMPLOYEES:
The statement showing the names of the top ten employees in terms of remuneration drawnis given as "Annexure 2."
There are no employees of the Company drawing remuneration requiring disclosure ofinformation under Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014.
DETAILS OF THE REMUNERATION TO MD/WTD (AS PER CLAUSE-IV OF SECTION-II OF PART-II OFSCHEDULE V):
(i) All elements of the remuneration package such as salary benefits bonuses stockoptions and pension: The details are given in clause- VI (A) of MGT-9 attached to thisreport as Annexure -4.
(ii) Details of fixed component and performance-linked incentives alongwith theperformance criteria:
The details are given in clause-VI(A) of MGT-9 attached to this report as Annexure4and performance criteria is linked with net profit of theCompany.
(iii) Service contracts notice period and severance fees:
Term valid till 22nd November 2021. Notice period is 6 months on eitherside or the Company paying 6 months remuneration in lieu of such notice and no severancefees.
(iv) Stock option details if any and whether these have been issued at a discount aswell as the period over which they accrued and how they areexercisable: The Company hasnot granted any stock option.
During the year there were no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.
As the requirement of CSR Committee is not applicable to the Company no furtherdetails/disclosure required to be given in this regard.
DETAILS ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:
|(A) Conservation of energy || |
|(i) the steps taken or impact on conservation of energy ||The Company accords high priority to conservation of energy. However there are no specific steps taken in this regard. |
|(ii) the steps taken by the company for utilizing alternate sources of energy ||The Company is not utilizing alternate sources of energy. |
|(iii) the capital investment on energy conservation equipments ||NIL |
|(B) Technology absorption || |
|(i) the efforts made towards technology absorption ||NIL |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||NIL |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) ||The Company has not imported any technology during the year. Hence there are no details to be furnished under each of the sub clauses in this clause. |
|(a) the details of technology imported; || |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and || |
|(iv) the expenditure incurred on Research and Development ||There are no expenditure incurred on Research and Development by the Company. |
|(C) Foreign exchange earnings and Outgo || |
|The Foreign Exchange earned in terms of actual inflows during the year and ||Rs. 825 Lakhs |
|The Foreign Exchange outgo during the year in terms of actual outflows ||Nil |
INTERNAL FINANCIAL CONTROL:
The Directors has laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and have been operatingeffectively.
During the year under report your Company has not accepted any deposits pursuant toSection 73 of the Companies Act 2013. Hence further details are not given.
Details of money accepted (if any during the year) by the Company from the Directorsand/or the relatives of Directors of the Company are given in the notes to the FinancialStatements and the same are not deposit as per the applicable provisions of Companies Act2013 and rules made thereunder.
The Corporate Governance Report forms an integral part of this Report and annexedhereto as "Annexure 3" together with the Certificate from the PracticingCompany Secretary regarding compliance with the requirements of Corporate Governance asstipulated in Part C of Schedule V to the SEBI (Listing Obligations & DisclosureRequirement) Regulations 2015.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 is annexedherewith as "Annexure - 4".
In Compliance to the provisions of Section 92 and Section 134 of the Act read with Rule12 of the Companies (Management and Administration) Rules 2014 the copy of the AnnualReturn of the Company for the financial year ended 31st March 2021 and otherpolicies of the Company is placed on the Company's website atwww.sanginitachemicals.co.in.
PARTICULARS OF LOANS INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013:
There are no Loans Investments or Guarantees /Security given by the Company during theyear under section 186 of the Companies Act 2013; hence no particulars are required tobe given.
MANAGEMENT DISCUSSION AND ANALYSIS:
Necessary Management Discussion and Analysis Report pursuant to Regulation 34(2)(e) ofThe SEBI (LODR) Regulations 2015 is appended as "Annexure- 5" toDirector's Report.
RELATED PARTY TRANSACTION:
There are no particulars of contacts or arrangements with related parties referred toin Section 188(1) of the Companies Act 2013 which are required to be reported in theprescribed form AOC-2. The details of related party transactions as per AS-18 areotherwise reported in the financial statements. The related party transactions areotherwise carried out in the ordinary course of business and on arm's length basis and thesame are in the best interest of the Company. The related party transactions are due tobusiness exigencies.
Your Directors wish to place on record their sincere appreciation for significantcontribution made by the employees at all the levels through their dedication hardworkand commitment thereby enabling the Company to boost its performance during the yearunder report.
Your Directors also take this opportunity to place on record the valuable co-operationand continuous support extended by its valued business associates Practicing CompanySecretary Auditors Supplier Customers Banks / Financial Institutions Governmentauthorities and the shareholders for their continuously reposed confidence in the Companyand look forward to having the same support in all its future endeavors.
| ||By Order of the Board |
| ||Sd/- |
|Place : Gandhinagar ||Dineshsinh B Chavada |
|Date : 13th May2021 ||(DIN: 01497977) |
| ||Chairperson & Managing Director |