india gelatine chemicals ltd share price Directors report

Dear Members,

The Board of Directors are pleased to present the report of the business and operations of the Company along with audited financial statements for the financial year ended 31 March 2023 (year under review/ FY 2022-23).

Financial Results

The summary of the standalone and consolidated financial results is as follows:

Rs. in lakh

Particulars	Standalone		Consolidated*
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Net Sales/Income	2,12,580.76	2,24,874.15	2,12,580.76	-
Other Income	5,883.75	3,522.58	5,919.74	-
Total	2,18,464.51	2,28,396.73	2,18,500.50	-
Expenditure
(i) Variable	1,51,967.62	1,07,877.49	1,51,967.62	-
(ii) Fixed	21,350.94	19,583.58	21,371.61	-
(iii) Depreciation/Amortization	6,425.50	5,560.08	6,425.50	-
(iv) Finance costs	2,784.76	3,843.33	2,784.76	-
Total	1,82,528.82	1,36,864.48	1,82,549.49	-
Profit Before Taxes	35,935.69	91,532.25	35,951.01	-
Less:
(i) Current Tax	9,156.98	22,453.00	9,156.98	-
(ii) Deferred Tax	(312.07)	1,567.67	(312.07)	-
Net Profit	27,090.78	67,511.58	27,106.10	-
Share in Profit/(Loss) of associate	-	-	(27.26)
Net profit after taxes and share of loss of associate	27,090.78	67,511.58	27,078.84
Add: Balance brought forward from the previous year	1,65,021.86	98,410.68	1,65,021.86	-
Profit before appropriation	1,92,112.64	1,65,922.26	1,92,100.70	-
Less: Appropriations
(i) Dividend on Equity Shares	1,350.29	900.19	1,350.29	-
(ii) Other comprehensive loss/(income)	80.92	0.21	80.92	-
Total	1,431.21	900.40	1,431.21	-
Profit carried to Balance Sheet	1,90,681.43	1,65,021.86	1,90,669.49	-

*Sandur Pellets Private Limited, a wholly owned subsidiary, was incorporated on 7 May 2022 and the Company started presenting its consolidated financial statements from the current year. Accordingly, the comparatives of the previous year are not applicable.

Performance Review and State of the Companys Affairs

During the year under review, the Company has a turnover amounting to Rs. 2,12,581 lakh and EBITDA of Rs. 45,146 lakh. Decrease in turnover compared to previous financial year was majorly due to lower realisation in mining and ferroalloys segments coupled with high volatility in coke segment. The segment wise revenue growth/(decline) against previous year for mining, ferroalloys and coke & energy segments were (18)%, (10)% and 14% respectively.

The Company recorded profit before tax of Rs. 35,936 lakh after charging Rs. 6,426 lakh towards depreciation/amortization on fixed assets and Rs. 2,785 lakh towards finance costs. The profit before tax has decreased by 61% over the previous year mainly due to decrease in realisation per tonne from external sales of Manganese Ore, decrease in realisation of Iron Ore due to drop in the market price and decrease in average selling price per MT of Ferroalloys. Further, there has been an increase in cost of production of ferroalloys and coke due to increase price of their respective raw materials. The segment wise result decline against previous year for mining, ferroalloys and coke & energy segments were 41%, 70% and 89% respectively.

After charging current income tax of Rs. 9,157 lakh, deferred tax of Rs. (312) lakh, the profit after tax (PAT) for the current year has been Rs. 27,091 lakh. There has been a reduction in the PAT as compared to previous financial year.

STATUTORY REPORTS

Subsidiary and Associate companies incorporated during the year under review are yet to start their operations. Hence, performance of these companies is insignificant to the overall performance of the Company.

Projects

Existing Projects

Downhill Conveyor System

The Companys proposal for setting up a 300 tonnes per hour Downhill Conveyor System (DCS) from the Companys Kammaturu Iron Ore Mine to PMBR railway siding is under progress. At the head end and the tail end of the DCS, 100% of electrical work, 85% of fabrication work and 64% of the civil works have been completed. With current status, the DCS project is envisaged to be commissioned three months after Stage 2 approval of Forest Clearance is granted by the Government of India, which is under process. Successful implementation of this project will lead to seamless movement of product, lower transportation cost and higher realizations as product will be delivered directly at railway sliding.

Power Purchase

The Company had entered into a Share Subscription and Shareholders Agreement (SSSHA) with Renew Green Energy Solutions Private Limited (RGESPL) and Renew Sandur Green Energy Private Limited (RSGEPL) and Power Purchase Agreement with RSGEPL for the purpose of captive consumption of renewable power at the Companys Metal

& Ferroalloys Plant. Pursuant to the SSSHA, the Company invested an amount of Rs. 3,86,43,000/- towards subscription of 35,13,000 equity shares of Rs. 10 each at a premium of Rs. 1 each on 6 January 2023 and Rs. 27,05,01,000 towards subscription of 2,45,91,000 equity shares of Rs. 10 each at a premium of Rs. 1 each on 30 March 2023. Accordingly, as on 31 March 2023, the Company subscribed to 49% equity stake of RSGEPL.

As on the date of this Report, 33 MW Solar Power Plant and 9.9 MW Wind Turbine Generators with associated electrical equipments interconnecting the power with Karnataka Power Transmission Corporation Limited (KPTCL) grid has been successfully commissioned at Kudligi Taluk, Vijayanagara District, Karnataka State. With successful commissioning and injection of above power to the grid, the objective of Rights Issue as mentioned in the Letter of Offer dated 21 July 2022 i.e., the procurement of power at cheaper cost to operate all the three existing furnaces of ferroalloy plant and other expansion activities at Vyasankere, Hosapete Taluk, Vijayanagara District, Karnataka State has been achieved.

Future Projects

The Company is exploring different strategic possibilities and evaluating the opportunities from different parameters in order to sustain growth, achieve substantial market share and meet its future needs. Future market for the envisaged products, availability of infrastructure facilities and utilities are some of the critical aspects that the Company is considering as part of next phase of expansion into beneficiation of ores, manufacturing of pellets and setting up an integrated steel manufacturing facilities. Appropriate decisions in this regard will be taken by the Company based on the expert opinion, analysis and evaluation.

The following events occurred till the date of this Report:

Approval for enhancement in Maximum Permissible Annual Production (MPAP) of Manganese Ore

On 22 February 2023, the Central Empowered Committee (CEC) constituted by the Honble Supreme Court of India, has grantedapprovaltotheCompany,forenhancingtheCompanys Manganese Ore production from 2.86 lakh tonnes to 5.82 lakh tonnes (5.50 lakh tonnes in Mining Lease No. 2678 and 0.32 lakh tonnes in Mining Lease No. 2679). The CEC has granted approval after examining in detail the recommendations of the Technical Committee of the Government of Karnataka and the report of the Indian Council of Forestry Research & Education, Ministry of Environment, Forest & Climate Change (MoEFCC) and keeping in view the Honble Supreme Courts order dated

13 April 2012 and the Judgements dated 18 April 2013 and 14 December 2017.

Grant of Environmental Clearance (EC) for increase in Iron Ore production from 1.60 Million Tonnes Per Annum (MTPA) to 4.50 MTPA along with proposed 7.0 MTPA Beneficiation Plant and a Downhill Conveyor System

MoEFCC, Government of India, examined the Companys application under EIA Notification 2006 and its further amendmentsthereto,andafteracceptingtherecommendations of Expert Appraisal Committee (EAC) during 9th EAC (Non-Coal Mining) meeting held during January 17-18, 2023 and 12th EAC meeting held on March 21-22, 2023, has accorded Environmental Clearance on 25 April 2023 for enhancing Iron Ore production from 1.60 MTPA to 4.50 MTPA, retaining the Manganese Ore production at 0.582 MTPA. MoEFCC has also granted approval for the proposed 7.0 MTPA Ore Beneficiation Plant, 1.2 km Down Hill Conveyor System and 0.15 MTPA Crushing & Screening Plant of Iron Ore and Manganese Ore in the Companys Mining lease area of 1860.10 ha (ML No: 2678).

Approvals

Subsequent to obtaining EC from MoEFCC for enhancement in production, the Company has applied for combined Consent For Establishment (CFE) to Karnataka State Pollution Control Board (KSPCB) seeking enhancement in Iron Ore production from 1.6 MTPA to 4.5 MTPA, Manganese Ore production from 0.286 MTPA to 0.582 MTPA, setting up a Beneficiation Plant of 7.0 MTPA and 1.2 km Downhill Conveyor from Kammathuru Iron Ore mine to PMBR railway siding. On receipt of approval for Consent for Establishment from KSPCB, the Consent For Operations (CFO) will be obtained in phased manner for enhancing the Manganese Ore production from current 0.286 MTPA to 0.582 MTPA followed by Consent for Operations for enhancement in Iron Ore production from 1.60 to 4.50 MTPA, Beneficiation Plant and Downhill Conveyor Project.

The Company had represented to CEC on 26 April 2023 seeking enhancement of MPAP of Iron Ore in Mining Lease No. 2678. The CEC after examining the proposal, advised Federation of Indian Mineral Industries (FIMI) on 2 June 2023 for compilation of the requisite information to enable Indian Council of Forestry Research & Education, Dehradun to prepare Reclamation & Rehabilitation Plans at the enhanced level of operations.

Awards and Recognitions

Five Star Rating Award

The Ministry of Mines, Government of India and Indian Bureau of Mines have introduced the Sustainable Development Framework and have undertaken a system of rating mining leases.

At the 75th Anniversary of Indian Bureau of Mines held on 1 March 2023 in Nagpur, the Ministry of Mines, Government of India has awarded 5 Star Rating to both the Mining Leases of the Company, for the year 2021-22. The Company has been receiving Five Star Rating Awards from inception of this award by Ministry of Mines, Government of India in the year 2014 -15 and thereafter for all years. Consecutively, this is the 8th year that the Company has received 5 star rating.

Other Awards

At the 21st MEMC Week organised by the Mines Environment

& Mineral Conservation Association of Karnataka under the aegis of Indian Bureau of Mines, the Company has bagged a total of 17 prizes, including the overall first prize for both the mines.

As a part of the 52nd National Safety Day programme, the Companys plant in Vyasanakere has been awarded "Best Safety Performance Industry" on BKRISE regional level competition by the Department of Factories and Boilers, Government of Karnataka.

Change in the Capital Structure

As on 31 March 2023, the authorised share capital of the Company was Rs. 11,500 lakh comprising of 11,40,00,000 Equity Shares of Rs. 10 each and 1,00,000 Preference Shares of Rs. 100 each. The paid-up share capital of the Company was

Rs. 2,700.58 lakh comprising of 2,70,05,823 Equity Shares of

Rs. 10 each.

During the year under review, the Board of Directors of the Company in its meeting held on 10 April 2022, approved issue of up to 1,80,03,882 equity shares of face value of Rs. 10 (Rights Equity Shares) each at a price of Rs. 10 per equity share (Issue Price) for an amount not exceeding Rs. 18,00,38,820 on a Rights Basis to the eligible equity shareholders of the Company in the ratio of 2 Rights Equity Shares for every 1 fully paid-up equity share held by the eligible equity shareholders as on the Record Date, that is on Wednesday, 27 July 2022 which got allotted on 9 September 2022. Accordingly, the issued, subscribed and fully paid-up share capital of the Company has increased from Rs. 9,00,19,410 divided into 90,01,941 equity shares of Rs. 10 each to Rs. 27,00,58,230 divided into 2,70,05,823 equity shares of Rs. 10 each.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor shares (including sweat equity shares) to employees of the Company under any scheme. Further, the Company has not issued debentures, bonds, convertible or non-convertible securities or warrants and has not held any shares in trust for the benefit of employees where the voting rights are not exercised directly by the employees. The Company has not bought back any of its securities during the year.

Change in the Nature of the Business

During the year under review, there was no change in nature of business.

Dividend Distribution Policy

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), top 1000 listed companies based on market capitalization are required to formulate a dividend distribution policy. Accordingly, the Company has adopted the Dividend Distribution Policy which sets out the parameters and circumstances which are to be considered by the Board in determining the distribution of dividend to its Members and/or retaining profits earned by the Company. The Companys Dividend Distribution Policy is available on the Companys website at https://www. sandurgroup.com/policies and annexed to this Report as

‘Annexure A.

Dividend

The Directors have recommended a dividend of Rs. 5 per equity share of Rs. 10 each (50%) For the year ended 31 March 2023. The said dividend is subject to the approval of Members at the ensuing Annual General Meeting of the Company. According to the Finance Act, 2020, dividend income will be taxable in the hands of the Members w.e.f., 1 April 2020, and the Company is required to deduct tax at source from the dividend payable to the Members at prescribed rates as per the Income Tax Act, 1961.

Transfer to Reserves

As permitted under the Companies Act, 2013 (the Act), the Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for the financial year 2022-23 in the statement of profit and loss.

Transfer of Amount to Investor Education and Protection Fund

As per Section 124(5) of the Act read with rules made thereunder, dividends remaining unpaid/unclaimed for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to Investor Education and Protection Fund (IEPF). Further, the shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company in the name of IEPF.

In pursuance of the above, the dividend remaining unclaimed or unpaid in respect of dividends declared for financial year 2014-15 amounting to Rs. 1,40,670 have been transferred to the IEPF during the financial year 2022-23. Consequently, 504 shares belonging to 8 Members in respect of which dividends remained unpaid/unclaimed for seven consecutive years were also transferred to IEPF.

In the interest of the Members, the Company sends periodical reminders to the Members to claim their dividends to avoid the transfer of dividends or shares to the IEPF Authority. Notices in this regard are also published in the newspapers and the details of unpaid/unclaimed dividends and Members whose shares are liable to be transferred to the IEPF Authority, are uploaded on the Companys website at https://www.sandurgroup. com/shares-transferred-to-iepf.

It may be noted that as per the above-mentioned provisions of the Act, the unpaid/unclaimed dividend pertaining to the financial year 2015-16 and unpaid/unclaimed first interim dividend pertaining to the financial year 2016-17, along with the underlying shares are due to be transferred to IEPF by 21 October 2023 and 19 December 2023 respectively. Members who have not encashed the dividend warrant(s) from financial year 2015-16 onwards, may forward their claims to the Company/Registrar and Transfer Agents before 7 October 2023, to avoid any transfer of dividend or shares to the IEPF Authority.

The information in respect of unpaid/unclaimed dividend and shares thereto along with due date for transfer to IEPF are given below:

Financial Year	Date of declaration	Due date for transfer to IEPF	Unclaimed dividend As on 31 March 2023	Unclaimed shares As on 31 March 2023
2015-16 (Final dividend)	14 September 2016	21 October 2023	1,45,458.00	48,486
2016-17 (Interim dividend-I)	12 November 2016	19 December 2023	1,43,844.00	71,922
2016-17 (Interim dividend-II)	31 March 2017	7 May 2024	55,732.00	55,732
2016-17 (Final Dividend)	26 September 2017	2 November 2024	96,764.00	48,382
2017-18 (Interim Dividend)	27 December 2017	2 February 2025	2,52,430.00	50,486
2017-18 (Final Dividend)	1 September 2018	7 October 2025	1,06,798.00	53,654
2018-19 (Interim Dividend)	14 November 2018	21 December 2025	1,78,111.50	50,989
2018-19 (Final Dividend)	21 September 2019	28 October 2026	1,10,792.50	31,655
2019-20 (Interim Dividend I)	11 November 2019	18 December 2026	71,950.00	35,975
2019-2020 (Interim Dividend II)	5 March 2020	11 April 2027	1,99,810.00	39,962
2020-21 (Final Dividend)	22 September 2021	29 October 2028	2,38,216.00	26,157
2021-22 (Final Dividend)	28 September 2022	3 November 2029	1,19,210.00	24,743

The voting rights on the shares lying with IEPF shall remain frozen till the rightful owner claims the shares. The benefits arising out of the shares transferred to IEPF is credited to IEPF Authorities. The Members can claim the same from the IEPF Authorities.

The Members whose unpaid/unclaimed dividends or shares are transferred to the IEPF can request the Company/Registrar and Transfer Agent as per the applicable provisions in the prescribed e-form IEPF-5 for claiming the unpaid/unclaimed dividend or shares out of the IEPF. The process for claiming the unpaid/unclaimed dividend or shares out of the IEPF is also available on the Companys website at https://www. sandurgroup.com/others.

Bijan Kumar Dash, Company Secretary and Chief Compliance Officer is the Nodal Officer under the provisions of IEPF.

Subsidiary Company, Associate Company and Joint Ventures

During the year under review, the Company had incorporated a Wholly Owned Subsidiary (WOS) company with the name "Sandur Pellets Private Limited" on 7 May 2022 by subscribing to 100% of its share capital. There has been no change in the nature of business of the WOS. The Company does not have any material subsidiary as per Regulation 16(1)(c) of Listing Regulations. The Policy on Determining Material Subsidiary is uploaded on the Companys website at https://www. sandurgroup.com/policies.

On 5 May 2023, the State Level Environment Impact Assessment Authority, Karnataka, constituted by Ministry of Environment and Forest, Government of India approved the transfer of Environmental Clearance (Order No. SEIAA 46 IND 2020) dated 11 February 2022 for establishment of Iron Ore and Manganese Ore Beneficiation plant at Sy No. 89(Part),

97/3, 98 & 99, Jaisinghpur (Venkatagiri) village, Sandur Taluk, Ballari District, Karnataka which was earlier granted to M/s. Excel Mining and Infra Services in favour of Sandur Pellets Private Limited, WOS of the Company. Accordingly, the WOS is in the process of initiating its business operations in the year 2023-24.

Pursuant to the Share Subscription and Shareholders Agreement entered with Renew Green Energy Solutions Private Limited and Renew Sandur Green Energy Private Limited (RSGEPL), the Company has subscribed to 49% of the paid-up equity share capital in RSGEPL, thereby making it an associate company.

The Company does not have any joint ventures.

The disclosure pursuant to first proviso to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed with this Report as ‘Annexure B. Further, as per the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company along with relevant documents and separate audited financial statement in respect of Companys subsidiary, are available on the Companys website at https://www.sandurgroup.com/ subsidiaries.

Significant and aterial Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.

Material changes and commitment, if any, affecting the financial position of the Company which occurred between the end of the financial year to which these financial statement relate and the date of the report

No material changes and commitment affecting the financial position of the Company occurred between the end of the financial year to which financial statement relate and the date of this Report.

Particulars of contracts or arrangements made with related parties

In terms of clause (h) of Section 134(3) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements entered into by the Company with its related parties as referred to in Section 188(1) of the Act in Form No. AOC-2 is annexed with this Report as

‘Annexure C.

During the year under review, all related party transactions entered into by the Company were on an arms length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee of the Company and placed before Board for information/approval, as and when required. With a view to ensure continuity of day-to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature, entered in the ordinary course of business and at arms length basis.

A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted, is placed before the Audit Committee on a quarterly basis for its review.

Further, the Company has not entered into any contract/ arrangement/transaction with related parties which are considered to be material as per Regulation 23 of the Listing Regulations and the Companys Policy on Related Party Transactions. In terms of Regulation 23(9) of the Listing Regulations, the Company submits the details of related party transactions as per the specified format to the stock exchange on a half yearly basis.

In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Companys website at https://www.sandurgroup.com/policies.

Particulars of Loans, Guarantees or Investments

The particulars of investments made under Section 186 of the Act have been disclosed in the financial statement. The Company has not granted any loans or provided guarantees under Section 186 of the Act.

Deposits

The Company does not have any deposits at the beginning of the financial year and has neither accepted nor renewed any deposits during the year under review. Thus, provisions of Section 73 of the Act are not applicable to the Company.

Directors and Key Managerial Personnel

As on the date of this Report, the Board consists of seven members - one Managing Director, one Whole Time Director, four Independent Directors (including one Woman Director) and one Non-Executive Non-Independent Director. The Chairman of the Board is a Non-Executive Director.

Induction

During the year, the Company has not appointed any Director or Key Managerial Personnel.

Re-appointments

During the year, the following re-appointments were made by the Company:

• Jagadish Rao Kote (DIN: 00521065) was re-appointed as an Independent Director by the Members of the Company through Postal Ballot on 17 July 2022, for a second term of five consecutive years with effect from 27 May 2022 to 26 May 2027. The Board opined that he is a person of integrity and possess relevant expertise and experience (including proficiency) and he satisfies the independence criteria as laid down under the Act and the Listing Regulations.

• At the 68th Annual General Meeting (AGM) held on 28 September 2022: a. In terms of the provisions of Section 152(6) of the Act, Mohammed Abdul Saleem (DIN: 00061497), Director of the Company, liable to retire by rotation and who being eligible, offered himself for reappointment, was re-appointed by the Members.

b. Hemendra Laxmidas Shah (DIN: 00996888) who was on the Board as Non-Executive Director was appointed as an Independent Director, for a term of five consecutive years with effect from 1 October 2022 to 30 September 2027. The Board opined that he is a person of integrity and possess relevant expertise and experience (including proficiency) and he satisfies the independence criteria as laid down under the Act and the Listing Regulations.

c. Mohammed Abdul Saleem (DIN: 00061497) was reappointed as Whole Time Director designated as Director (Mines) for a further term of three years with effect from 1 October 2022 to 30 September 2025.

d. Bahirji Ajai Ghorpade (DIN: 08452844) was reappointed as Managing Director for a further term of three years with effect from 1 October 2022 to 30 September 2025.

During the period from 1 April 2023 till the date of this Report, subject to the approval of the members, the following reappointments are proposed to be made:

• In terms of the provisions of Section 152(6) of the Act, T. R. Raghunandan (DIN: 03637265), the Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offered himself for reappointment.

• The Board at its meeting held on 3 August 2023, accorded its approval for appointment of Latha Pillai (DIN: 08378473), as an Independent Director of the Company for a second term with effect from 8 March 2024 to 7 March 2029 (both days inclusive), subject to Members approval at the ensuing Annual General Meeting. The Nomination and Remuneration Committee (NRC) at its meeting held on 17 May 2023, had reviewed domain skills, professional experience and industry exposure of Latha Pillai, Independent Director and noted that she fulfils the skills/expertise/competencies required in context of the Companys business. Thereafter, the NRC considering the excellent rating assigned to Latha Pillai during performance evaluation for the year 2022-23, recommended her appointment for a further period of five consecutive years to the Board as it will be advantageous and beneficial for the Company. Further, the Company has received a notice in writing from a Member proposing her candidature for the office of Director pursuant to Section 160 of the Act. The Board opined that she is a person of integrity and possess relevant expertise and experience (including proficiency) and she satisfies the independence criteria as laid down under the Act and the Listing Regulations.

Cessation

During the year, S. S. Rao (DIN: 00150816) ceased to be the Independent Director of the Company from closure of business hours on 10 November 2022, upon completion of his second term. The Board of Directors and the Management of the Company placed on record their profound appreciation for the contributions made by S. S. Rao during his association with the Company over the years.

As on 31 March 2023, the following were the Key Managerial Personnel of the Company as per Section 2(51) and 203 of the Act:

• Bahirji Ajai Ghorpade, Managing Director;

• Mohammed Abdul Saleem, Whole Time Director designated as Director (Mines);

• Uttam Kumar Bhageria, Chief Financial Officer & Chief Risk Officer;

• Bijan Kumar Dash, Company Secretary & Chief Compliance Officer.

Board Meetings

The Board meets at regular intervals to discuss and decide on Companys business policies and strategies apart from other regular and important business items. However, in case a special and urgent business requires approval of the Board, such approval is taken by passing resolution through circulation, as permitted by law, which is taken on record in the subsequent Board meeting.

During the financial year 2022-23, the Board met eight times i.e., 10 April 2022, 18 May 2022, 6 July 2022, 21 July 2022,

11 August 2022, 10 November 2022, 9 February 2023 and 24 March 2023. The details and particulars of Board meetings are given in the Corporate Governance Report forming part of this Report.

Policy on Directors Appointment and Remuneration

The Company has adopted Policy on Nomination and Remuneration of Directors, Key Managerial Personnel (KMPs) and other employees which inter-alia includes criteria for determining qualification, positive attributes, independence of a director and other matters provided under sub-Section (3) of Section 178 of the Act and relevant provisions of Listing Regulations. The Members may refer Corporate Governance Report for details regarding this policy. The policy is also available on the Companys website at https://www. sandurgroup.com/policies. During the year under review, the Policy was reviewed and amended by the Nomination and Remuneration Committee and the Board at its meeting held on 11 August 2022.

Declaration by Independent Directors

All the Independent Directors of the Company meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of Listing Regulations. Declarations to this effect have been received from them as prescribed under Section 149(7) of the Act. Further, in terms of Regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstance or situation which exists or may reasonably be anticipated that could impair or impact their ability to discharge their duties. During the financial year 2022-23, there has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors have also complied with the Code for Independent Directors prescribed in Schedule IV to the Act and Code of Conduct for Directors and Senior Management formulated by the Company under Regulation 17(5) of Listing Regulations.

Board Evaluation

The Nomination and Remuneration Committee and the Board have laid down the manner in which formal evaluation of the performance of the Board, committees, individual Directors and the Chairman has to be made annually.

During the evaluation process, it was ensured that all the provisions relating to Board evaluation of the Act and Listing Regulations, are followed. The criteria for evaluation were based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) and the guidelines issued by Institute of Company Secretaries of India (ICSI). The Board evaluation was done internally. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, individual Directors and the Chairman. The questionnaire for evaluation of Board was based on several parameters like structure of the Board, meetings of the Board, functions of the Board, relationship and communication between Board and management and professional development of Directors. Similarly, the evaluation criteria for Committee, individual Directors, and the Chairman were set on different parameters.

At the Board meeting that followed the meeting of the Independent Directors on 9 February 2023, the outcome of evaluation was discussed. The feedback received on the performance evaluation of individual Directors was intimated separately to each Director by the Chairman of the Board by mail. Similarly, outcome of evaluation of Chairman of Board was intimated to him by the elected Chairman of the separate meeting of Independent Directors.

Meeting of Independent Directors

A separate meeting of Independent Directors for the financial year 2022-23 as per Clause VII (1) of Schedule IV under Section 149(8) of the Act and Regulation 25(3) of the Listing Regulations was held on 9 February 2023, wherein the Independent Directors reviewed the performance of Non-Independent Directors, Chairman of the Board and the Board as a whole.

Training and Familiarisation Programme for Independent Directors

Details of training and familiarization programme are provided in the Corporate Governance Report forming part of this Report.

Board Committees

The Board has constituted six Committees to assist the Board in effectively discharging its functions and responsibilities. These committees support Boards work in line with the applicable provisions of the Act and Listing Regulations, namely:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee;

5. Risk Management Committee;

6. Corporate Sustainability Committee.

In addition to the above, the Board at its meeting held on

10 April 2022 constituted a "Right Issue Committee" of the Board to decide detailed terms and conditions of the Companys Right Issue and matters connected or incidental thereto. The Board at its meeting held on 10 November 2022 taken note of the dissolution of the Right Issue Committee after completion of Rights Issue formalities in all aspects.

The details of the Committees including composition, terms of reference, meeting details etc., are provided in the Corporate Governance Report forming part of this Report.

The recommendations, if any, of these Committees are submitted to the Board for approval. During the year under review, the Board had accepted the recommendations of the Committees.

Vigil Mechanism

The Company believes in conducting its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethics. The Company has established a vigil mechanism towards this approach. In accordance with Section 177(9) of the Act read with Rule 7(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the Companys Audit Committee oversees the vigil mechanism which has been established to address genuine concerns about unethical behaviour, actual or suspected fraud, leak of Unpublished Price Sensitive Information or violation of the Companys Code of Conduct and Ethics Policy, if any, expressed by the Director(s) or employees or any other person.

The Company has adopted a Whistle Blower Policy which provides for adequate safeguards against victimisation of Director(s) or employee(s) or any other person who avail such mechanism. The Company has also provided direct access to the Chairman of the Audit Committee in matters concerning financial, accounting and concerns relating to officers belonging to above Senior General Manager level.

The Whistle Blower Policy is available on the Companys website at https://www.sandurgroup.com/policies. During the year under review, the Policy was reviewed and amended by the Audit Committee and the Board at its meeting held on 18 May 2022.

Directors Responsibility Statement

In accordance with the provisions of Section 134(3)(c) of the Act, the Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit and loss of the Company For the year ended 31 March 2023;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts for the financial year ended 31 March 2023 on a ‘going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Details in respect of frauds reported by Auditors under sub-Section (12) of Section 143 of the act other than those which are reportable to the Central Government

The Auditors have not reported any frauds during the year under review.

Adequacy of Internal Financial Controls

The Company has established a robust framework for internal financial controls. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The Company has a well-defined delegation of power with well-defined authority and responsibility matrix defining the financial limits for approving revenue as well as capital expenditure. Segregation of duties has been well defined to remove the concentration of power within few offcials. The Company uses a state-of-the-art Enterprise Resource Programming (ERP) system to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices.

M/s. P. Chandrasekar LLP, Chartered Accountants, have been appointed to oversee and carry out internal audit of Companys activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the Statutory Auditors and approved by the Audit Committee. In line with international practice, the internal audit plan aims at review of internal controls and risk in operations. The Audit Committee reviews audit reports submitted by the internal auditor. Suggestions for improvement are considered and the Audit Committee follows up on them. During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed. Accordingly, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2022-23.

The Statutory Auditors in their report has stated that the Company has, in all material respects, an adequate internal financial controls system with reference to standalone and consolidated financial statements and such internal financial controls with reference to standalone and consolidated financial statements were operating effectively as at 31 March 2023, based on the criteria for internal financial control with reference to standalone and consolidated financial statements established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annual Return

A copy of Annual Return, in Form MGT-7, pursuant to the provisions of Section 92(3) of the Act read with relevant Rules of the Companies (Management and Administration) Rules, 2014 as amended from time to time is available on the website of the Company at https://www.sandurgroup.com/agm-postal-ballots.

Auditors

Statutory Auditor

M/s. R. Subramanian and Company LLP, Chartered Accountants, Chennai (Firm Registration No. 004137S/ S200041), were appointed as Statutory Auditors of the Company at the 63rd AGM held on 26 September 2017 in terms of the provisions of Section 139 of the Act, to hold office until the conclusion of 68th AGM.

As the term of five years of the M/s. R. Subramanian and Company LLP came to an end at the conclusion of 68th AGM, based on the recommendation of the Audit Committee and the Board, the Members of the Company at the 68th AGM held on 28 September 2022 appointed M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No.008072S) as the Statutory Auditors of the Company for a term of five consecutive years i.e., from the conclusion of 68th AGM till the conclusion of 73rd AGM of the Company, at such remuneration as may be mutually agreed between the Board of Directors and the Auditors. In terms of Companies (Amendment) Act, 2017, effective from 7 May 2018, the requirement of seeking ratification of auditors appointment at every Annual General Meeting has been dispensed with.

The Auditors Report on the financial statement of the Company For the year ended 31 March 2023, is forming part of this Report.

Secretarial Auditor

Pursuant to the provisions of Section 204(1) of the Act and Regulation 24A of the Listing Regulations, the Company is required to annex with its Boards Report a secretarial audit report, given by a Company Secretary in Practice. N. D. Satish, Practicing Company Secretary (having ICSI Membership No. F10003 and Certificate of Practice No. 12400) has been appointed as Secretarial Auditor of the Company for the financial year 2022-23. The Secretarial Audit Report is forming part of this Annual Report as ‘Annexure D.

In accordance with Regulation 24A of Listing Regulations read with SEBI Circular No. CIR/CFD/CMD1/27/2019 dated

8 February 2019, the Company has obtained Secretarial Compliance Report for the financial year ended 31 March 2023 from the Secretarial Auditor of the Company and the same has been submitted to the stock exchange (BSE) on 29 May 2023.

Cost Auditor and Cost Records

In terms of Section 148(2) of the Act read with Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, the Company is required to get its cost accounting records audited by a cost auditor. The Board had, at its 359th meeting held on 11 August 2022, appointed M/s. K. S. Kamalakara & Co. as Cost Auditors for the financial year 2022-23 and the same was ratified by the Members at the 68th Annual General Meeting of the Company.

The Board after considering the recommendations of the Audit Committee, reappointed M/s. K. S. Kamalakara & Co. as Cost Auditors for the financial year 2023-24. A resolution seeking approval of the Members for ratifying the remuneration payable to the Cost Auditors for financial year 2023-24 is provided in the Notice of the ensuing Annual General Meeting.

In accordance with Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014, the Cost Auditor is required to submit his report within 180 days from the date of closure of financial year and the Company is required to file the same with the Ministry of Corporate Affairs (MCA) within 30 days from the date of receipt of the cost audit report. The Cost Audit Report for the financial year 2021-22 was filed with the MCA on 26 August 2022.

The Cost accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by the Company.

Internal Auditor

The Company has appointed M/s. P. Chandrasekar LLP, Chartered Accountants as Internal Auditor of the Company as mandated under provisions of Section 138 of the Act to evaluate the internal controls and financial reporting.

Auditors Observation

There are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditor, Secretarial Auditor, Internal Auditor and Cost Auditor in their respective reports.

Secretarial Standards

Pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs (MCA) except delay in circulation of agenda papers and draft minutes of Board/Committee meetings to Board of Directors or Committee members in few instances. However, all the members of the Board/Committees approved minutes of the meetings and the same were taken note of in the subsequent meeting.

Corporate Governance

Corporate Governance Report forms part of this Report. A Certificate on Corporate Governance Report as required under

Regulation 34(3) read with Schedule V of Listing Regulations, issued by M/s. Deloitte Haskins & Sells, Chartered Accountants, is annexed to this Report as ‘Annexure E.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report as required under clause (e) of Regulation 34(2) read with Schedule V of the Listing Regulations, forms part of this Report.

Business Responsibility & Sustainability Report

Business Responsibility & Sustainability Report as required under clause (f) of Regulation 34(2) of the Listing Regulations depicting initiatives taken by the Company from an environmental, social and governance aspect forms part of this Report.

Statement concerning Development and Implementation of Risk Management Policy of the Company

The Board has constituted Risk Management Committee to proactively identify, assess and mitigate risks in order to protect its business, improve Corporate Governance and enhance stakeholders value. The Risk Management Committee lay down procedures for risk assessment and minimization. It shall serve as the ‘eyes and ears for the Company which would ensure that the Company is insulated from risks both at the macro and micro level. The Risk Management Committee periodically reviews the various risks associated with the Companys business, industry, operation and recommends steps to be taken to control, monitor and mitigate the risk.

The Company has in place a Risk Management Policy to identify and evaluate various business risks and opportunities. The Risk Management Policy is available on website of the Company at https://www.sandurgroup.com/policies.

In terms of Regulation 21 of the Listing Regulations, Uttam Kumar Bhageria is the Chief Risk Officer of the Company.

The Company believes that periodic review of various risks which has a bearing on the business and operations of the Company is vital to proactively manage uncertainty and changes in the internal and external environment so that it can limit the adverse impact and capitalize on opportunities.

The Companys risk management is embedded in the business processes as a part of review of business and operations. The Board with the support of the management periodically assess various risks associated with the business and operations of the Company and considers appropriate risk mitigation processes. However, there are certain risks which cannot be avoided but the impact can only be minimized.

The Management Discussion and Analysis Report forming part of this Report also contains information on risk and concerns relating to industry. The Company has well defined roles and responsibilities of Board of Directors, Audit Committee, Risk Management Committee, Chief Risk Officer to have a seamless process in place regarding risk identification, assessment, mitigation and monitoring.

Corporate Social Responsibility

Pursuant to the provisions of Section 135 of the Act read with rules made thereunder, the Corporate Social Responsibility Committee has been constituted by the Board for the purposes of recommending and monitoring the CSR initiatives of the Company. The details such as composition, terms of reference, meetings held etc., are mentioned in the Corporate Governance Report forming part of this Report.

Details of Policy Developed and Implemented by the Company on its Corporate Social Responsibility (CSR) Initiatives

The Company as a responsible corporate citizen has been, for close to seven decades, consciously contributing towards betterment of the local area and living standards of its people, and also protection and improvement of the environment. In accordance with Section 135 of the Act, the Company has undertaken CSR activities, projects and programs, excluding activities undertaken in pursuance of its normal course of business.

Reaching out to under privileged communities is a part of the Companys philosophy and culture. The Company shall continue to be mindful of its social and moral responsibilities towards consumers, employees, members, and the local community. The Company works primarily through Karnataka Seva Sangha (Implementing Agency) towards supporting projects in the areas of education, healthcare and sanitation, community development including protection of national heritage, restoration of historical sites, and promotion of art and culture, enhancing vocational skills; promoting healthcare including preventive healthcare, and rural development, environmental sustainability and ecological balance, promotion of traditional arts and handicrafts.

As against the approved budget of CSR contribution of

Rs. 889.42 lakh for financial year 2022-23, Rs. 680.40 lakh was spent, and Rs. 209.02 lakh was transferred to unspent CSR account as per provision of Section 135 (6). Rs. 209.02 lakh will be spent during financial year 2023-24 for the Ongoing Project of construction of three Schools of Sandur Education Society. The Annual Report on Companys CSR activities of the

Company undertaken during the year 2022-23 is furnished in

‘Annexure F.

The Companys Corporate Social Responsibility Policy can be accessed on Companys website at https://www.sandurgroup. com/policies. The Members may refer to the Annual Report on CSR for details regarding the policy. During the year under review, the Policy was reviewed and amended by the Corporate Social Responsibility Committee and the Board at its meeting held on 10 November 2022.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are set out in ‘Annexure G to this Report.

Particulars of Employees

In terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the Members excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company. Any Member interested in obtaining the same may write to the Company Secretary of the Company.

The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in ‘Annexure H and forms part of this Report.

Remuneration received by Managing Director/ Whole Time Director from Holding Company or Subsidiary Company

During the year under review, the Managing Director/Whole Time Director has not received any remuneration from holding company or subsidiary company.

Credit Rating

During the year under review, there has been no change in the credit ratings of the Company. As on 31 March 2023, the Company had the following credit ratings:

Instrument Details	Amount (in Rs. lakh)	Rating upgraded	Name of credit rating agency
Long term rating Short term rating	89,600	A (Stable) A1	ICRA
Long term rating Short term rating	89,600	A (Stable) A1	CRISIL

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted an Internal Complaints Committee (ICC) for the prevention and redressal of complaints related to sexual harassment at workplace. During the year under review, no complaints were received relating to sexual harassment.

Disclosure of Transactions of the Company with any person or entity belonging to the Promoter/ Promoter Group which holds 10% or more shareholding in the Company

The transactions with the person or entity belonging to the promoter/promoter group which hold (s) 10% or more shareholding in the Company have been disclosed in the accompanying financial statements.

General Disclosures

No disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: a) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

b) the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

Acknowledgement

The Directors wish to thank members of judiciary, its associates and legal fraternity for their strong commitment to justice, fairness and equity. The Directors also extend their gratitude to the Union and the State Governments for their support as well as confidence and recognitions bestowed on the Company.

The Directors wish to place on record their appreciation of all its employees for their commendable teamwork, professionalism and dedication. And ultimately, the Directors wish to thank all the government agencies, promoters, business associates, banks and investors for their continued support and trust.

	For and on behalf of the Board of Directors
	T. R. Raghunandan
Place: Bengaluru	Chairman
Date: 3 August 2023	DIN: 03637265