sangam health care products ltd Directors report


To the Members,

The Directors have pleasure in presenting before you the 27th Directors Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2021. The Companys performance is summarized below:

1. FINANCIAL SUMMARY/HIGHLIGHTS/STATE OF COMPANYS AFFAIRS:

The performance during the period ended 31stMarch, 2021 has been as under:

(Rs. In Lakhs)

Particulars Standalone
2020-2021 2019-2020
Total Income 955.48 2182.32
Total Expenses 1214.54 2132.28
Profit Before Exceptional and Extraordinary Items and Tax (259.06) 50.04
Exceptional Items -- 291.54
Profit Before Tax (259.06) 341.58
Current tax 0 0
Deferred tax (29.19) (63.84)
Net profit After tax (229.87) 405.43

2. REVIEW OF OPERATIONS:

During the year under review, the Company has recorded a total income of Rs. 955.48 lakhs and loss of Rs. 229.87 lakhs for the financial year ending 31.03.2021 as against the total income of Rs. 2182.33 lakhs and profit of Rs. 405.43 lakhs in the previous financial year ending 31.03.2020.

3. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments affecting financial position of the company between 31st March, 2021 and the date of Boards Report. (i.e.06.09.2021) except the effect of the pandemic COVID 19 due to which the factory was inoperative upto Forty-Five days approximately.

4. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the period under review and the date of Boards Report there was no change in the nature of Business.

5. DIVIDEND:

Keeping the Companys revival plans in mind, your Directors have decided not to recommend dividend for the year.

6. REASON FOR SUSPENSION:

The Company is under suspension on BSE due to penal reasons. However, the company under the new management lead by Mr. Bhagat Reddy, Managing Director of the Company has been working aggressively towards revoking the company from suspension. The Board assures that all due efforts are being made to revoke the company from suspension and so shall be done soon.

In this direction, the company has received in-principle approval from BSE vide letter LIST/ COMP/SK/317/2019-20 dated 28.02.2020. The company is working towards getting the trading started on BSE within a year.

7. TRANSFER TO RESERVES:

Pursuant to provisions of Section 134 (3) (j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review.

8. BOARD MEETINGS:

The Board of Directors duly met 06 (Six) times on 15.06.2020, 26.06.2020, 19.08.2020, 15.09.2020, 13.11.2020 and 13.02.2021and in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

9. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

10. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS, COURTS, TRIBUNALS, IMPACTING THE GOING CONCERN BASIS OF THE COMPANY:

There were no significant material orders passed by regulators, courts, tribunals, impacting the going concern basis of the Company except for in principle approval from BSE as mentioned earlier in the report.

11. CORPORATE GOVERNANCE:

A separate section titled "Report on Corporate Governance" along with the Auditors

Certificate on Corporate Governance as stipulated under Regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure I.

12. VIGIL MECHANISM

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Code of Conduct, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the Code of conduct cannot be undermined. Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chief Financial Officer of the Company for redressal.

13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management discussion and analysis report for the year under review as stipulated under Regulation 4(3) read with Schedule V, Part B of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 with the stock exchange in India is presented in a separate section as Annexure - I forming part of the annual report.

14. APPOINTMENT / RE-APPOINTMENT / RESIGNATION / RETIREMENT OF DIRECTORS /CEO/ CFO AND KEY MANANGERIAL PERSONNEL:

During the period under review following were the Directors/ Key Managerial Personnel resigned/ vacated office during the financial year 2020-21 including between the financial year ended 31st March 2021 and date of Boards report (i.e 06.09.2021):

Name of the Directors/ KMP Designation Date of Cessation/ Vacation
1 Sharvari SwapNil Shinde Company Secretary 17.11.2020
2 Khushwant Singh Independent Directors 26.06.2020
3 RamuChaganti Independent Directors 26.06.2020
4 A. Bala Gopal Managing Director 08.09.2021

The Board also noted that the Independent Directors Mr. Khushwant Singh and Mr. Ramu Chaganti confirmed that there is no other material reason other than personal commitments.

During the period under review following were the Directors/ Key Managerial Personnel appointed/reappointed during the financial year 2020-21:

• Mrs. Padma Ghanakota, was re-appointed at the 26thAnnual General Meeting held on 15.09.2020 as director who retired by rotation and being eligible offered herself for reappointment.

• Mr. D. Bhagat Reddy is appointed as Managing Director for a period of three years with effect from 06.09.2021 with the approval of members in this Annual General meeting.

• Mr. A. Bala Gopal was appointed as Chief Executive Officer of the company w.ef 06.09.2021.

As required under regulation 36 (3) of the SEBI (LODR), Regulations, 2015, brief particulars of the Directors seeking appointment/re-appointment are given as under: -

Name of the Director Mrs. Padma Ghanakota Mr. D. Bhagat Reddy
Date of Birth 17.08.1964 20.01.1984
Date of Appointment 25.03.2015 06.09.2021
Expertise in specific functional areas She has 10 years of experience in manufacturing IV sets and manufacturing pouches. She is handling operations of manufacture of IV sets at her Jeedimatla unit, Hyderabad. He has 7 years experience in manufacturing IV sets and Manfacturing other medical disposables.
Qualifications Commerce Graduate Engineering Graduate
Names of the Listed entities in which the person is holding Directorships or -- __
Board Committee Memberships
Inter se relationship among Directors Wife of Mr. Bala Gopal Addepally --
Disclosure of Shareholding 20,00,000 2,00,000

15. FORMAL ANNUAL EVALUATION / BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, board Committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations.

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

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of independent directors, performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed.

Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

16. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an annual return is uploaded on website of the company i.e http://www.sangamhealthcare.co.in/

17. AUTHORISED AND PAID UP CAPITAL OF THE COMPANY:

The authorized capital of the Company stands at Rs. 15,00,00,000/- divided into 1,50,00,000 equity shares of Rs. 10/- each. The Subscribed, Issued and Paid-up capital of the Company stands at Rs. 14,86,07,000/- divided into 1,48,60,700 equity shares of Rs. 10/- each.

18. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received declarations from Mr. Rajesh Kakkera and Mr. Madhavarao Mandalapu, Independent directors of the company to the effect that they are meeting the criteria of independence as provided in Sub-section (7) of Section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

19. DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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;

e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

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

20. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES:

The company does not have any subsidiaries/Associate companies.

21. DETAILS IN REPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUBSECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO CENTRAL GOVERNMENT.

There were no frauds reported by the auditors as per section 143 (12).

22. STATUTORY AUDITORS:

The Board has appointed M/s. M.M Reddy & Co as a statutory Auditor of the company to hold office from the conclusion of this 26th Annual General meeting till the conclusion of 31st Annual General Meeting subject to approval.

23. DISCLOSURE OF ACCOUNTING TREATMENT:

The Company has complied with the appropriate accounting policies and has ensured that they have been applied consistently. There have been no deviations from the Indian Accounting Standards prescribed under section 133 of the Companies Act, 2013 read with relevant rules.

24. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mrs. Aakanksha, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit carried out for FY 2020-21is annexed as Annexure - II.

25. AUDIT REPORTS:

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2021 and has noted the same and the details for qualifications/observation are discussed in detail in Audit Report attached to it.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisions of section 204 of the Companies Act 2013 and the qualifications/ observations and management response discussed in detail below:

Observation Management Reply
1 Non-appointment of company secretary as per reg. 6 of SEBI (LODR) Regulations, 2015 and Section 203 of Companies Act, 2013 The management is looking for a suitable incumbent for a position of company secretary
2 Disclosures on website as per reg 46 of SEBI (LODR) Regulations, 2015 and Scrutinizer report as per section 108 of Companies Act, 2013 The management assured the website of the company will be updated as per the regulations.
3 Newspaper Publication for Notice of Board Meetings The Management assured further that the notice of Board Meetings will be published in newspapers as per the requirement
4 Non-Submission of financial results under reg 33 of SEBI (LODR) Regulations, 2015 The Board assured that the results will be submitted to exchange on time and there will not be delay for the same in future.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE OUTGO:

The required information as per Sec.134 of the Companies Act 2013 is provided hereunder:

A. Conservation of Energy:
CONSUMPTION PER UNIT OF PRODUCTION
Product
Medical Disposables (qty in Lakhs) : 134.68
Electricity (kwh) per Lakh Nos : 5272.33
Furnace Oil (Ltrs) : NIL
Coal : NIL
Others : NIL

B. Technology Absorption: NIL

• the efforts made towards technology absorption;

• the benefits derived like product improvement, cost reduction, product development or import substitution

• in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

(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

(e) the expenditure incurred on Research and Development.

C. Foreign Exchange Earnings and Out Go: NIL

27. CORPORATE SOCIAL RESPONSIBILTY POLICY:

During the financial year, the Company does not have net worth of Rs. 500 Crore or more or turnover of Rs. 1000 Crore or more or a net profit of Rs. 5.00 Crore or more during the financial year, as per section 135 of the Companies Act, 2013. However, based on the turnover for the F.Y 2020-21, the provisions of CSR were not applicable to the company.

The Corporate Social Responsibility Committee, formed under Section 135 of the Companies Act, 2013, reconstituted in the Board Meeting held on 26.06.2020 due to resignation of Mr. Khushwant Singh. The composition of CSR is as follows:

Name of the Members Designation
1 M. Madhavarao Chairman
2 Rajesh Kakkera Member
3 Padma Ghanakota Member

28. SECRETARIAL STANDARDS:

The company is in compliance with Secretarial Standards issued by The Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

29. INSURANCE:

The properties and assets of Company are adequately insured.

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given loans, Guarantees or made any investments attracting the provisions of Section 186 of the Companies Act, 2013 during the financial year under review.

31. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well-defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors.

The internal audit is conducted at the Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

32. RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well-structured risk management process.

33. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at www.sangamhealthcare.co.in.

Your directors draw attention of the members to Notes to Accounts attached to the financial statement which sets out related party disclosures.

34. DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable for the financial year 2020-21.

35. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY:

The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.

36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The composition of committee is as follows:

Name Designation
U.Subrahmanyam Presiding Officer
S. V. Bhavani Member
Anuradha Member
Dasaripallajoji External Member

All employees are covered under this policy. During the year 2020-21, there were no complaints received by the Committee.

37. DELISTING OF EQUITY SHARES FROM BSE:

The company is suspended from trading on BSE but continues to be listed. The company was not delisted from the exchange during the FY 2020-21.

38. NON-EXECUTIVE DIRECTORS COMPENSATION AND DISCLOSURES:

None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.

39. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

During the year under review, the Company does not have any unclaimed Dividends to be transferred to investors education and protection funds.

40. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

During the year under review no Company has become or ceased to become its subsidiaries, joint ventures or associate Company.

41. CREDIT & GUARANTEE FACILITIES:

No Working capital and Cash credits in any banks.

42. STATEMENT SHOWING THE NAMES OF THE TOP TEN EMPLOYEES IN TERMS OF REMUNERATION DRAWN AND THE NAME OF EVERY EMPLOYEE AS PER RULE 5(2) & (3) OF THE COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as Annexure IV(B).

During the year none of the employees is drawing a remuneration of Rs.1,02,00,000/- and above per annum or Rs.8,50,000/- and above in aggregate per month, the limits specified under the Section 197(12) of the Companies Act,2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

43. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1) (2) & (3) of the Companies (Appointment & Remuneration) Rules, 2014 read with Schedule V of the Companies Act, 2013 as Annexure IV(A).

The Board of Directors has not withdrawn Salary during the financial year 2020-21, Hence the ratio of remuneration is Nil for each director.

44. ACKNOWLEDGEMENT:

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thanks the employees at all levels, who through their dedication, co-operation, support and smart work have enabled the company to achieve a moderate growth and is determined to poise a rapid and remarkable growth in the year to come.

For and on behalf of the Board of
Sangam Health Care Products Limited
Sd/- Sd/-
Place: Secunderabad Bala Gopal Addepalli Padma Ghanakota
Date: 06.09.2021 Chairman & Managing Director Director
(DIN: 01712903) (DIN:07078176)