sadhana nitro chem ltd share price Directors report


To

The Members of

SADHANA NITRO CHEM LIMITED

The Board of Directors of your company are having pleasure in presenting the 50th report of the Board of Directors on the Standalone & Consolidated Business performance and Operations of the Company for the Financial Year ended 31st March, 2023.

1. FINANCIAL RESULTS AND HIGHLIGHTS OF PERFORMANCE

(Rs. In Lakhs)

PARTICULARS STANDALONE CONSOLIDATED
2022-23 2021-22 2022-23 2021-22
Revenue from operations (Net) & Other Income 14,757 12,565 14,512 13,668
Total Expense 14,051 11,718 13,949 12,777
Profit before Taxation 706 847 564 891
Tax Expense (247) (268) (247) (269)
Profit/after tax 459 579 316 622
Other Comprehensive Income 34 16 34 16
Total Comprehensive Income 493 595 351 638

2. REVIEW OF OPERATIONS / STATE OF AFFAIRS OF THE COMPANY/KEY HIGHLIGHTS:

Your companys total revenue for the financial year ended on March 31,2023, was Rs. 14,757 Lakhs, demonstrating a substantial growth of approximately 17.45% compared to Rs. 12,565 Lakhs from the previous years. Despite the global disruptions in the previous financial year, which resulted in an inflationary trend worldwide, the Indian economy is on the rise, largely due to the strong push towards "Make in India." Amid these challenging circumstances, your company has managed to post commendable results for the financial year 2022-23.

The EBIDTA from regular operations for FY 2022-23 was Rs. 2440.26 Lakhs, marking an increase from the previous years EBIDTA of Rs. 1,875 Lakhs by about 30.14 %.

Despite a significant increase in turnover and rigorous cost control at every level, your company witnessed a decrease in Profit After Tax (PAT) to Rs. 459 Lakhs from regular operations. This was primarily due to a substantial surge in the cost of raw materials, driven by the geopolitical situation in Ukraine. Even with this significant rise in raw material costs, your company managed to register a profit, demonstrating resilience and effective management under challenging circumstances.

Moreover, Spidigo Net Private Limited, a wholly owned subsidiary of your company, was merged into your company in pursuant with the order passed ay the Honble NCLT, Mumbai Bench w.e.f. February 08, 2023.

The company maintains a satisfactory order book position, and there have been no alterations in the nature of the companys business.

3. 50 YEARS IN RETROSPECT:

Your company proudly entered its Golden Jubilee Year in 2022-23.

Late Shri Dhankumar T Javeri, the founding Chairman, established Sadhana Nitro Chem Limited as a public limited company on July 21, 1973, with its shares subsequently listed on the Bombay Stock Exchange. Your company launched the first Nitrobenzene (a Heavy Organic Chemical) Plant within the private sector, beginning operations in 1975. Over the years, we expanded our operations through diversification into the production of various downstream Dye-Intermediate derivatives, increasing capacity, initiating new plants, and leveraging foreign technical collaboration for high-value derivative production.

Our forward integration was strategically designed for technical synergy, operating economies, and cost benefits. In December 1984, your company underwent a management restructuring that led to the appointment of Shri Asit D. Javeri as Managing Director in January 1985. Under his leadership, the company experienced a shift in business policies, focusing on quality standards, competitive efficiency, and significant export initiatives. It is heartening to note that your companys products are internationally recognized for their quality, and are trusted by multinational corporations in advanced countries.are trusted by multinational corporations in advanced countries.

Your company has worked tirelessly to reduce waste, enhance operating efficiency, and maintain cost control at all levels, offering a competitive edge in both domestic and international markets. A fair and firm policy adopted by the management has fostered a cooperative relationship with our employees at all levels. Through persuasion and participation, we have established productivity-linked settlements with the Union for over three decades.

Your company has taken financial decisions based on a cautious and conservative approach, emphasizing profit reinvestment and reduced dependence on borrowing, enabling us to navigate various trials and turbulences.

In FY 2017-18, Shri Abhishek A. Javeri was appointed as Managing Director, while Shri Asit D. Javeri assumed the role of Executive Chairman. Under their leadership, your company has achieved and reported its best financial results to date.

We invite you to assess the companys performance using the following indicators:

Adjusted to FV 1 Per Share
2022-23 2017-18 2012-13 2007-08
1. Cash Earnings Per Share (CEPS) (Rs.) 0.69 3.53 8.45 0.08
2. Earnings Per Share (EPS) (Rs.) 0.23 3.36 (0.19) (164)
3. Net Worth Per Share (NWPS) (Rs.) 11.30 4.96 0.11 1.24
4. Debt Equity Ratio (D/E) Ratio 0.58 1.44 65.67 3.96

During the last five-decade companys equity share of face value Rs. 10/- each was sub-divided over the period and presently the equity shares are of the face value Re. 1/- each.

The shareholders of the company were rewarded with following three Right issues to broaden the capital base of the Company.

Sr. No. Financial Year of Allotment Nature of allotment
1. 1975-76 Rights Issue (Ratio of 1:4) at par.
2. 1993-94 Rights issue (Ratio of 7:10) at a premium of Rs. 40/- (400%)
3. 2008-09 Rights issue (Ratio of 7:2) at par.

The shareholders of the company were also rewarded with following Five Bonus issues.

Sr. No. Financial Year of Allotment Nature of allotment
1. 1987-88 Bonus in the (Ratio of 2:5)
2. 1995-96 Bonus in the (Ratio of 1:2)
3. 2001-02 Bonus in the (Ratio of 2:5)
4. 2019-20 Bonus in the (Ratio of 1:2)
5. 2020-21 Bonus in the (Ratio of 2:5)
6. 2023-24 Bonus in the (Ratio of 2:9)

As on date, the total share capital stands at Rs. 24,70,58,452/- of which approximately 64.65% has been contributed by Bonus issues.

In FY 2021-22, your company issued 65,20,606 Equity Share Warrants, each convertible into one equity share of face value Re. 1/- each, at a premium of Rs. 152.36/- per share.

Your company successfully registered under the PLI Scheme for manufacturing Para Amino Phenol (PAP) in FY 2021-22 and established a PAP batch manufacturing plant. After stabilizing the quality standards, it was converted into a continuous PAP manufacturing process to achieve cost benefits and economies of scale.

In terms of company rankings at BSE Limited, your company ranked 873 in FY 2018-19, 982 in FY 2019-20, 651 in FY 2021-22, and 696 in FY 2022-23 among the Top 1000 Companies.

Were delighted to inform you that your companys equity shares are also listed on the National Stock Exchange (NSE) during FY 2023-24.

Your company has been also achieved ISO 9001:2015 quality management system, ISO 14001:2015 Environment management system, ISO 45001:2018 Occupational health and safety management system certificates.

4. SHARE CAPITAL

a) Share Warrant:

Company has issued 65,20,606 equity share warrants at a price of Rs. 153.36 per equity share warrant aggregating to Rs. 1,00,00,00,137/- on preferential basis convertible into one equity share against each warrant face value Re. 1/- at a premium of Rs. 152.36/- per equity share. During the year company has issued and allotted 65,20,606 equity shares upon conversion of the equity share warrants.

b) Listing on NSE:

We are delighted to announce that as of May 5th, 2023, your companys equity shares have been listed on the National Stock Exchange of India (NSE). This significant milestone will provide enhanced trading opportunities and improve liquidity for our valued shareholders.

c) Bonus Shares

Your director considering the reserves and surplus as on 31st March 2023 recommended issue of bonus shares which has been approved by shareholders on 25th June, 2023 by way of postal ballot in the ratio of 2 (two) bonus shares for every 9(nine) existing equity shares held on the record date by capitalisation of reserves.

5. DIVIDEND:

Your Directors are pleased to propose a 15% dividend (subject to tax on the expanded capital) on equity shares for the financial year 2022-23. This proposal is subject to the approval of shareholders at the upcoming 50th Annual General Meeting.

Members registered as Beneficial Owners at the close of business hours of the Record Date will qualify for the dividend receipt. Upon approval by the Members, the dividend will be distributed within 30 days following the Annual General Meeting.

6. EXPANSIONS:

We are excited to share that your company has successfully established a Para-Amino Phenol (PAP) plant. After stabilizing the production process and ensuring high-quality standards, we have transitioned from batch manufacturing to a continuous process for PAP production. We are now on the path to expand the plants capacity to its full potential of 36,000 TPA of pAp.

In 2018, our company initiated production of ODB2 with an initial capacity of 125 TPA. Subsequent expansion allowed us to debottleneck this capacity to 250 TPA the following year. We further elevated this capacity to 550 TPA in 2021. Today, we are proud to announce that we have increased our ODB2 capacity to a substantial 2,400 TPA, solidifying our position as one of the worlds leading ODB2 manufacturers.

7. EXPORTS:

As your company has grown more competitive globally, we have successfully established stable export relationships across various continents, including Europe, Japan, and North America. This global exposure is a testament to our companys robust quality and competitive pricing.

Further more, we have noticed a developing trend among developed nations initiating a China +1 sourcing policy. This policy represents a strategy to diversify supply chains and reduce dependency on a single source, namely China. This development presents an exciting opportunity for your company to broaden our market base further and build new relationships in these developed nations.

One of the pivotal aspects that differentiate us and positions us favorably is our vertical integration strategy. This approach offers us better control over our supply chain, ensures the consistent quality of our products, and allows for more competitive pricing. Coupled with the diversified sourcing policy, our integrated operations model makes us an increasingly attractive supplier choice.

In the evolving global trade scenario, your company is well-positioned to leverage these shifts and expand its footprint. The diversification in sourcing coupled with our unique value proposition through vertical integration sets us apart as we strive to be the supplier of choice.

While our local market is growing steadily Companys turnover is still focused on the export market. This years exports being total of Rs. 7968.63 Lakhs compared to last years Rs. 7511.30 Lakhs registering an Increase of about 6.09 %.

Exports constituted about 55.08% of the overall revenue from operation including other income. Companys Exports are well diversified in terms of product range as well as the Countries of Export.

8. OUTLOOK:

Your company rests on robust long-term fundamentals, allowing us to leverage our distinct product portfolio and competitive edge to establish a diverse and enduring sales pipeline with sustainable cash flows for the years ahead. We aim to strategically employ these cash flows to broaden our product lines, branch out into derivatives of our existing products, and ensure a dependable, long-term revenue stream.

To bolster our autonomy and resilience, we are also focusing on further backward integration, which will aid in reduce external dependencies. As global markets continue to reopen and recover, we anticipate a favorable surge in demand.

In essence, were steering towards a future where our unique offerings, strategic diversification, and sustainable growth align to keep us at the forefront of our industry, ready to seize new opportunities as they emerge.

9. DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013, (The Act) and other applicable rules thereunder during the year under review. Hence, the requirement for furnishing of details is not applicable.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Pursuant to the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and other applicable rules, Loans, guarantees and investments has been furnished in the Notes No.4 & 5 to Audited financial statement.

11. UNPAID DIVIDEND & IEPF:

The Company is not required to transfer any amount to the Investor Education & Protection Fund (IEPF) and does not have unclaimed dividend which remains to be transferred to Unpaid Dividend Account during the year under review..

12. TRANSFER TO RESERVES:

The Board of Directors have not appropriated and transferred any amount to any Reserve and the Board has decided to retain the entire amount in profit and Loss account.

13. CONSOLIDATED FINANCIAL STATEMENTS:

As on 31st March, 2023 the Company has one wholly owned Foreign Subsidiary viz. Anuchem B.V.B.A. Belgium Financial Statement of the said subsidiary is considered for the purpose of preparing Consolidated Financial statements.

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards

(AS) viz. AS 21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India and form part of this Annual Report.

14. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

Anuchem B.V.B.A continue to be engaged in their respective nature of business. The performance and financial position/salient features of the subsidiary for the year ended 31stMarch, 2023 is given in Form AOC-I which is annexed hereto and marked as Annexure-I.

Spidigo Net Private Limited merged with the Company vide NCLT order dated 8th February, 2023.

15. RELATED PARTY TRANSACTIONS:

a) The particulars of contracts or arrangements with related parties:

Your Company has historically adopted the practice of undertaking related party transactions only in the ordinary and normal course of business and at arms length as part of its philosophy of adhering to highest ethical standards, transparency and accountability. In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has approved a policy on related party transactions. An abridged policy on related party transactions has been placed on the Companys website at https://www.sncl.com/policies.

Related Party Transactions are also placed on a quarterly basis before the Audit Committee and Board of Directors for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature.

Further, the Company has not entered into any material transactions / contracts /arrangements referred to in Section 188(1) of (The Act) with related party(ies) as defined under Section 2(76) of (The Act) during the financial year under review.

b) Disclosure of Related Party Transaction with Person or Entity belonging to Promoter & Promoter Group:

The Company has not made any transaction(s) with Manekchand Panachand Trading Investment Co Private Limited, (Being Holding Company) an Entity belonging to Promoter or Promoter Group that holds 10% or more shareholding of the Company.

c) Not given loan to any subsidiary.

16. INSURANCE:

The assets of your Company are adequately insured. Your Company has also taken out suitable cover for Public Liability.

17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an adequate Internal Control System commensurate with the size and nature of its business. The preparation designing and documentation of Policy on Internal Financial Control are in place and implemented which is reviewed periodically and modified suitably to ensure controls.

The internal audit is carried out by a separate firm of Chartered Accountants. The periodical audit reports, including significant audit observations and corrective actions there-on, are presented to the Chairman of the Audit Committee.

18. MATTERS RELATED TO DIRECTORS:

a) Declarations by Independent Directors:

All Independent Directors have given their declarations that they meet the criteria of independence as laid down under the Act and pursuant to the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors are registered with MCA Independent Directors Databank.

b) Board Evaluation:

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the

Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive director.

The same was discussed in the Board meeting held subsequently to the meeting of the independent directors, at which 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.

c) Remuneration Policy:

The Board of Directors has on recommendation of the Nomination & Remuneration Committee framed policy for selection and appointment of Directors, Senior Management and their remuneration which is stated in the Corporate Governance Report.

The Nomination and Remuneration Policy of company is being placed on website of company and same can be assessed at https://www.sncl.com/policies.

d) Number of Board Meetings:

The Meetings of the Board and its Committees are held at regular intervals to discuss, deliberate and decide on various business policies, strategies, governance, financial matters and other businesses.

The Board met 5 times during the financial year ended 31 stMarch, 2023 in accordance with the provisions of the Act, the details of which are given in the Corporate Governance Report.

The gap between two Board Meetings did not exceed 120 days as per Section 173 of the Act.

e) Board of Directors and Key Managerial Persons:

i) Appointment/Re-appointment

• Based on the recommendation of Nomination and Remuneration Committee (NRC) the Board at its meeting held on 2nd May, 2022 approved the appointment of Shri. Rakesh R. Kothari as the Chief Financial Officer ("CFO") of the company with effect from 2nd May 2022. Pursuant to his appointment as CFO of the company, Shri Abhishek A. Javeri ceases to be "CFO" with effect from 2nd May, 2022.

• The members of the company at the Annual General Meeting held on 22nd September 2022 had approved the reappointment of Mr. Amit Mahendra Mehta as an Independent Director of the company for a second term of five consecutive years commencing from April 30, 2023 till April 29, 2028.

ii) Retirement by Rotation:

In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. As per the provisions of Section 152 of the Companies Act 2013, Mrs. Seema A. Javeri, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

The Board recommends her re-appointment and the agenda seeking the approval of Members is included in the Notice convening the 50th Annual General Meeting. The necessary resolution recommending her re-appointment forms part of the AGM Notice.

iii) Appointment criteria and qualifications and their remuneration:

The Nomination & Remuneration Committee ("NRC") identifies and ascertain the integrity, qualifications, expertise and experience of the person for appointment as Director, Key Managerial Personnel ("KMP") or Senior Management Personnel ("SMP") at Senior Management level and recommend the same to the Board for appointment.

iv) Separate Meeting of Independent Directors:

In terms of requirements of Schedule IV of the Act, the Independent Directors of the Company met separately on 14th February, 2023, inter alia to review the performance of Non-Independent Directors (including the Chairman), the entire Board and the quality, quantity and timeliness of the flow of information between the Management and the Board.

19. LOANS FROM DIRECTORS

During the financial year under review, the Company has borrowed the following amount(s) from Directors and the respective director has given a declaration in writing to the Company to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others. Accordingly, the following amount(s) is /are excluded from the definition of Deposit as per Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014: -

(Rs. in Lakhs)

Name of Director giving loan Amount borrowed during 2022-23
Shri. Asit D. Javeri 398.00
Shri. Abhishek A. Javeri 233.00
Smt. Seema A. Javeri 95.00

20. REMUNERATION / COMMISSION DRAWN FROM HOLDING / SUBSIDIARY COMPANY:

During the financial year under review, the directors of the Company has not received remuneration / commission from the holding / subsidiary Company.

21. COMMITTEES OF BOARD OF DIRECTORS OF THE COMPANY:

The Company has duly constituted the following mandatory Committees in terms of the provisions of the Act & Listing Regulations read with rules framed thereunder viz.

a. Audit Committee;

b. Nomination and Remuneration Committee;

c. Stakeholders Relationship Committee;

d. Corporate Social Responsibility Committee; and

e. Risk Management Committee

f. Internal Compliant Committee

The Composition of all above Committees, number of Meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report. All the recommendations made by the Committees were accepted by the Board.

Following are the Committees of Board of Directors of the Company, Details of the composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms part of the Annual Report. The same is annexed hereto and marked as Annexure-II.

22. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee was constituted pursuant to the provision of section 178 of the Act. The Committee has in accordance with the provisions of sub-section (3) of Section 178 of the Act formulated and uploaded on https://www.sncl.com/policy, the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

23. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

Corporate Social Responsibility Committee was constituted pursuant to the provisions of Section 135 of the Act. The composition of the committee is as follows:

Mr.Asit Dhankumar Javeri, Chairman,

Mr. Priyam Shantilal Jhaveri, Member Mrs. Ayesha S. Patel, Member

Mr.Abhishek A. Javeri, Member (appointed w.e.f. 14th February, 2023)

The Annual Report on CSR Activities, as stipulated under the Act and the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 ("LODR") forms an integral part of this Report and the Company has initiated activities in accordance with the said Policy, the details of which have been prescribed in Annexure-III.

The CSR policy is available on the website of the Company at the link https://www.sncl.com/policies.

24. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Regulation 34(2) of the SEBI Listing Regulations, inter alia, provides that the Annual Report of the top 1000 listed entities based on market capitalization, should mandatorily include a Business Responsibility & Sustainability Report ("BRSR") from financial year 2022-23 onwards. The same is annexed hereto and marked as Annexure-IV, describing the initiatives taken by the Company from an environmental, social and governance perspective.

The BRSR for the financial year 2022-2023 has also been hosted on the Companys website.

25. INTERNAL COMPLAINT COMMITTEE FOR PREVENTION AND PROHIBITION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Internal Complaint Committee ("ICC") was constituted as per provision of the Act for prevention and prohibition of Sexual Harassment of woman at workplace which consists of following members:

Sr. Name Designation Date of appointment / Cessation
a) Mrs. Seema Asit Javeri Chairperson/Presiding Officer 28th March, 2019
b) Mrs Philomena Fernandes Member resigned W.e.f 14th November, 2022
c) Mrs. Jyotsna Tushar Parab Member resigned W.e.f 14lh November, 2022
d) Mrs. Mamta Jatin Shah Member 28th March, 2019
e) Ms. S. M. Rao External Member appointed W.e.f 14th November, 2022
f) Ms. Smita Singh Member appointed W.e.f 14th November, 2022
g) Mr. V. Ramakrishnan Member appointed W.e.f 14th November, 2022
h) Mr. V. N. Bedekar Member appointed W.e.f 14th November, 2022
i) Mr. R. M. Gandhi Member appointed W.e.f 14th November, 2022

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the year under review no complaints were received by the Committee.

26. VIGIL MECHANISM / WHISTLE BLOWER AND RISK MANAGEMENT POLICY:

Pursuant to the provisions of Section 177 (9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and Regulation 22 of SEBI (LODR) Regulations 2015 the Company already has in place "Vigil Mechanism Policy" (Whistle Blower Policy) for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any financial statements and reports, etc.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Company also adopted Risk Assessment Procedure. The details of the same are mentioned in the Corporate Governance Report.

27. AUDITORS & REPORTS:

a) Statutory Auditors of the Company and their observations, if any on accounts for the year ended 31st March, 2023:

At the 46th Annual General Meeting held on September 25, 2019, the Members approved appointment of M/s. Jayesh Dadia & Associates LLP, Chartered Accountants (Firm registration No: 121142W /W100122) to hold office from the conclusion of the 46th Annual General Meeting until the conclusion of the 51th Annual General Meeting to be held for the financial year 2024.

The Statutory Auditors report does not contain any qualifications, reservations, adverse remarks or disclaimers.

b) Internal Auditors of the Company:

The Board of Directors in their meeting held on 24th May, 2023 re-appointed M/s Chandrashekhar Iyer & Co., Chartered Accountant as the Internal Auditor of the Company for the financial year 2023-24.

c) Cost Auditors of the Company:

The Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s Vinay Mulay & Co., Cost Accountants (Reg No: M/8791) as the cost auditors of the Company for the year ending March 31,2024 subject to approval of members in the ensuring Annual General Meeting i.e 50th AGM of the Company.

Further, as specified by the Central Government under sub-section (1) of section 148 of the Act the required accounts and records are made and maintained by the Company.

d) Secretarial Auditors of the Company:

The Board on the recommendation of the Audit Committee appointed M/s. MMJB & Associates LLP, Company Secretaries in Practice, Mumbai, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2022-23 and their report is annexed hereto and marked as Annexure - V. Observations made by Secretarial Auditor as per said report along with explanation made by Board is given below:

Sr. No. Particular of Observation Explanation by Board
1 The Company had entered into material Related party transaction for which approval of Shareholder taken post audit period i.e. on 25.06.2023. Consequently, details captured in Corporate Governance Reports for respective quarters was erroneous. The Company has obtained shareholders approval to ratify the material related party transaction by way of postal ballot dated June 25, 2023.
2 The Company has not appointed its Independent Director as a director on the board of its unlisted material subsidiary. The Company is in process of identifying Independent Director to appoint the same as director on the board of its unlisted material subsidiary.
3 The Company had made delay in submitting the outcome of Board Meetings. The delays have occurred due to unavoidable circumstances and the Company will strive to avoid such delays in future.
4 The Company has delayed in dissemination of documents/information on the website in few instances. Consequently web-links in annual report are also erroneous. The delays have occurred due to unavoidable circumstances and the Company will strive to avoid such delays in future.
5 The Structured digital database was non-functional for part of the period under Audit because of which entries made therein were in delay. The delays have occurred due to unavoidable circumstances and the Company will strive to avoid such delays in future. The Company shall ensure that the same is updated in a timely manner.
6 The Company has updated details of designated persons with the designated depository in delay. The Company did not update the SDD for one Designated Person inadvertently. The Company shall ensure that changes in the Designated Persons are updated on the same day.
7 The Company has not filed Form MSME-I half year ended 31.03.2022 and 30.09.2022. The Company inadvertently missed to file the Form MSME-I.
8 The Company has not filed Form CSR-2 for year ended 31.03.2021 and 31.03.2022. The Company inadvertently missed to file the Form CSR-2.
9 The Company has failed to transfer Rs. 2,18,18,736 towards Corporate Social Responsibility for FY 2021-2022 to a fund specified in Schedule VII of the Act since said amount was not spent by the company as its CSR Obligation for that year. The Company could not spend the required funds, the Company will ensure that the said amount will be transferred to the funds as mandated by law and the Company will strive to avoid such failure in the future.

The Board has also appointed M/s. MMJB & Associates LLP, Company Secretaries in Practice, Mumbai as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2023-24.

e) Reporting of frauds by statutory auditors:

There were no incidences of reporting of frauds by Statutory Auditors of the Company under Section 143 (12) of the Act read with Companies (Accounts) Rules, 2014.

f) Code for prevention of Insider Trading:

As per SEBI (Prohibition of Insider Trading Regulations),2015, your Company has adopted an amended Code of Conduct to regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the SEBI (Prohibition of Insider Trading) Regulations, 2015.

This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information and has been made available on the Companys website.

28. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulations 17 to 27 and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the corporate governance report together with Auditor report on the compliance on the same is annexed hereto and marked as Annexure-II and the Management Discussion and Analysis report is annexed hereto and marked as Annexure -VI.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read with Rule 8 of The Companies (Accounts) Rules,2014, is annexed hereto and marked as Annexure-VN.

30. ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and 134 (3) (a) of the Act, 2013, the Annual Return for the financial year ended 31st March 2023 will be uploaded on the website of the Company at https://www.sncl.com/annual-return.

31. SECRETARIAL STANDARDS OF ICSI

Your Company is incompliance with the Secretarial Standards on Meetings of the Board of Directors ("SS - 1") and General Meetings ("SS-2") issued by The Institute of Company Secretaries of India ("ICSI") and as approved by the Government of India.

32. INDUSTRIAL RELATIONS

The Company has been able to create a favorable work environment that motivates performance; customer focus and innovation in your companys strategies are based, inter alia, on process of continuous learning and improvement.

The Company continues to focus on extensive training and developmental activities and efficiency and quality improvement initiatives.

The productivity linked long term wage settlement with the workmen is under negotiation.

33. PARTICULARS OF EMPLOYEES AND REMUNERATION:

The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable Rules, is attached as Annexure-VIII. Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable Rules is provided in the Annexure forming part of this report.

34. SIGNIFICANT OR MATERIAL ORDERS PASSED AGAINST THE COMPANY

Pursuant to the requirement of Section 134(3)(q) of the Act, 2013 read with Rule 8(5)(vii) of the Companies (Accounts) Rules, 2014, it is confirmed that during FY 2021-22 there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companys operations in future.

35. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT:

There have been no other material changes and commitments affecting the financial position of your Company since the close of Financial Year i.e. 31st March, 2023 and the date of this Report except those mentioned in this report.

36. LEGAL AND REGULATORY

The Company ensures the compliance with laws and regulations prelevent and applicable are essential part of the business operations. We at Sadhana are committed to comply laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes.

Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

37. SYSTEM AND INFORMATION

Your Companys operations are increasingly dependent on Information Technology ("IT") systems and the management of information. Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of un-authorised access and misuse of sensitive information or disruption to operations continues to increase. To reduce the impact of external cyber-attacks impacting our business, we have firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees at Sadhana are trained to understand these requirements and ensure the effective implement.

38. GENERAL DISCLOSURES

Your Directors state that 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:

I. The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

II. The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

III. The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

IV. During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

39. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013 the Board of Directors of your Company, to the best of their knowledge and ability, confirm that:

(a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are

no material departures;

(b) The Director 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 your Company at the end of the Financial Year and of the profit of your Company for that period.

(c) The Director 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 your Company and for preventing and detecting fraud and other irregularities;

(d) The Director have prepared the Annual Accounts on a going concern basis;

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

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

40. SAFE HARBOUR :

Statements in the Boards Report including Annexures there to describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tax laws, Global geo-political situation, economic developments within and outside the country and other factors such as litigation and industrial relations.

41. ACKNOWLEGDEMENT:

The Board of Directors extends its deepest gratitude to all employees across various levels of our organization whose hard work, dedication, and unwavering commitment have been the pillars of our success, and for that, we are profoundly thankful.

We would also like to express our sincere appreciation for the enduring cooperation and support we have received from our shareholders, investors, bankers, financial institutions, customers, and business partners. Their trust and encouragement have been invaluable in our journey.

Our heartfelt thanks also go out to all regulatory authorities and other stakeholders who have consistently provided guidance and support, contributing to our ongoing growth and success. We look forward to strengthening these relationships as we continue to navigate the path to progress together.

For and On Behalf of the Board of Directors
ASIT D. JAVERI
EXECUTIVE CHAIRMAN
DIN: 00268114
Place: Mumbai
Date: 7th August, 2023