Sadhana Nitro Chem Ltd Management Discussions.

Your company is engaged in manufacture of chemical intermediates, heavy organic chemicals and performance chemicals. India emerged as one of the major source for chemical intermediates.

Opportunities & Threats

Moreover, over the last year the Chinese Government has starting paying strict attention to pollution control. On several occasions, companies in the same vertical, those are involved in the same product production as your company has faced several temporary suspensions. This has not only increased costs in China, but has also further increased credibility of your company in the international markets.

Your company is in the industry since last over 45 years. It has a very high degree of operating synergy, economies of scale and high quality standards. The products of your company have diverse uses and applications in several industries ranging from paper, pharmaceutical, agro chemicals, thermal dyes, light tabilizer, aerospace, dyes and hair dyes etc. Your company has good clientele base, which is well diversified over the World.

Besides, the domestic market has shown growth.

Operational Performance

The Companies growth considering the past few years performance has been outstanding. The Company is striving for further increasing profits. The total revenue from the operations for the year ended March 31,2018 escalated to ? 11,115 Lakhs as against ? 5,949 Lakhs in a previous financial year registering growth of 87%.

Market and Outlook

Your company has healthy order book position. Despite continued slowdown in the Global economies, the demand of your companys end products have increased globally and are expected to do so significantly over the coming years.

A better product mix, operational efficiency and stringent control on the cost have contributed towards increasing productivity, production and operating margins. These factors witnessed during the year are expected to continue going forward.

The Company continued to focus on cost control at every level to improve the operational efficiency which alongwith the increased operating level and upward revision of product prices is expected to maintain growth trend. Continuous efforts are being made for efficient energy and raw material consumption. The rate of flow of orders is encouraging. Production facilities are realigned and will be expanded to meet the demand. Your company, barring unforeseen circumstances, expects to further improve the turnover and performance.

Risks and Concerns

Since raw materials form an important component of your companys value chain, foreign exchange rates, cost and availability of some of the key raw materials like benzene, nitric acid, caustic potash, sulphur based chemicals, iron powder are an area of concern.

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 has been finalised and implemented which will be reviewed periodically and modified suitably to ensure controls. The internal audit functions are carried out by a separate firm of Chartered Accountants. The quarterly audit reports, including significant audit observations and corrective actions thereon, are presented to the Chairman of the Audit Committee.

Discussion on Financial Performance with Respect to Operational Performance.

The Companys revenue from operations has substantially increased to ? 11,115 Lakhs as compared to the previous year of? 5,949 Lakhs registering growth of 87%

Fluman Resources

Fluman Resource programs and initiatives in SNCL are aligned to meet the business needs. Your company believes in investing in people to develop and expand their capability. The Company has been able to create a favourable work environment that motivates performance, customer focus and innovation SNCLs strategies are based, inter alia, on processes of continuous learning and improvement.

Cautionary Statement

Statements in the Management Discussion & Analysis Report describing the Companys expectations, opinion, and predictions may please be considered as "forward looking statements" only. Actual results could differ from those expressed or implied. Companys operations should be viewed in light of changes in market conditions, prices of raw materials, economic developments in the country and such other factors.

For and On Behalf of the Board of Directors SADHANA NITRO CHEM LIMITED

ASIT D.JAVERI

Place: Mumbai CHAIRMAN AND MANAGING DIRECTOR

Date: 30th April, 2018 DIN: 00268114

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 32 to the standalone I nd AS financial statements;

ii. The Company did not have any long term contracts including derivative contracts for which there were any

material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Place: Mumbai Date: April 30, 2018 For Chandrashekar Iyer & Co Chartered Accountants

Firm Registration No: 114260W

Chandrashekhar Iyer Partner

Membership No.47723