Sagardeep Alloys Ltd Directors Report.

Dear Members,

Your Directors take pleasure in presenting the 13thAnnual Report along with Audited Financial Statements of your Company for the financial year ended 31st March, 2020.

1. Financial Results

During the year under review, your Company has achieved a total net sale of Rs.3380.27 lakhs and achieved Net Profit after Tax (NP) of Rs.26.07 lakhs. Your directors are optimistic about the performance of the Company in the coming years. The financial highlights for the year 2019-20 are as under:

Standalone (in lakhs)

Particulars for the year ended March 31, 2020 March 31, 2019
Net revenue from Operations (Sales) 3380.27 5108.87
Profit Before Depreciation and Tax 73.82 250.92
Less: Depreciation 42.37 40.61
Profit Before Tax 31.45 233.91
Less: Tax Expense 5.37 61.01
Profit After Tax 26.07 172.89
EPS (Basic) 0.23 1.52
EPS (Diluted) 0.23 1.52

Consolidated (in Lakhs)

Particulars for the year ended March 31, 2020 March 31, 2019
Net revenue from Operations (Sales) 3380.27 5108.87
Profit Before Depreciation and Tax 73.54 273.95
Less: Depreciation 43.92 42.19
Profit Before Tax 29.43 231.77
Less: Tax Expense 6.63 60.92
Profit After Tax 22.80 168.83
EPS (Basic) 0.21 1.57
EPS (Diluted) 0.21 1.57

2. Dividend

Your Director feel that it is prudent to plough back the profits of the Company for future growth of the Company and therefore do not recommend any dividend for the year ended March 31, 2020.

3. Transfer of Unclaimed Dividend to Investor Education and Protection Fund

Since there was no unpaid/unclaimed dividend, the provision of Section 125 of the Companies Act, 2013 do not apply.

4. Change in the nature of business, if any-

There is no change in the nature of business carried out by the Company in the Year 2019-2020.

5. Reserves

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.

6. Subsidiary, Joint Ventures and Associate Companies

The Company has one wholly owned Indian Subsidiary company i.e. Sagardeep Engineers Private Limited. A statement containing the salient features of financial statement of our subsidiaries in the prescribed format AOC-1 is appended to the financial statements of the Company.

7. Consolidated Financial Statement

The Financial Statement of the Company for the Financial year 2019-20 are prepared in compliance with the applicable provisions of the Act, Accounting Standards and as prescribed by Securities and Exchange Board of India (SEBI) under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Consolidated Financial Statement has been prepared on the basis of the audited financial statement of the Company as approved by their respective Board of Directors. Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company, the Consolidated Financial Statements along with all relevant documents and Auditors report thereon form part of this Annual Report.

8. Public Deposit

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") read with the Companies

(Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

9. Particulars of loan, Guarantees or Investment made under Section 186

During the year, the Company has not given any guarantee or provided security in connection with the loan to any other body corporate or person or made any investments however the Company has provided loans to persons/body corporates and the particulars of such loans, falling under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to financial statements of the Company.

10. Extract of the annual return

The extract of the Annual Return in Form MGT-9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure ‘I and is attached to the report.

11. Directors & Key Management Personnel

I. Composition of Board & Board Meetings

The Board of Directors of the Company has an optimum combination of Executive, Non-Executive and Independent Directors. As on the 31st March, 2020, the Board comprises of 5(Five) Directors, out of which 2 are Executive Directors and 3 are Non-Executive Independent Directors that includes one Woman Director. The Chairman of the Board is an executive Director.

The Board of Directors duly met 6 times on 26/04/2019, 13/05/2019, 30/05/2019, 12/08/2019, 14/11/2019 and 03/02/2020 during the year. The Composition, category and attendance of each Director at the Board and Annual General Meeting of each Director in various companies is as follows: -

Name of Director, Designation and Category No of Board Meetin gs held during the year No of Board Meetin gs attend ed during the Attenda nce at the AGM
Mr. Satishkumar A Mehta Chairman & Managing Director 6 6 Yes
Promoter
Mr. JayeshkumarA Mehta Whole Time Director 6 6 Yes
Promoter
Mr. Hemendra 6 6 Yes
B Patel
Non-Executive Director
Independent
Mrs. Vinita P 6 6 Yes
Maheshwari
Non-Executive Director
Independent
Mr. Jitendra D Patel 6 6 Yes
Non-Executive Director
Independent

As on 22nd May, 2020 Mr. Parimal Patwa were appointed on Board as an as a Non-Executive Non-Promoter and Non-Independent Director and after his appointment the Board composition is as under: -

Name of Director Mr. Satishkumar A Mehta Designation Chairman & Managing Director Promoter
Mr. Jayeshkumar A Mehta Whole Time Director Promoter
Mr. Hemendra B Patel Non-Executive Director Independent
Mrs. Vinita P Maheshwari Non-Executive Director Independent
Mr. Jitendra D Patel Non-Executive Director Independent
Mr. Parimal Patwa Non-Executive Director Non- Independent

II. INDUCTIONS

During the year Mr. Nayan P. Pitroda, a member of Institute of Company Secretaries of India was appointed as the Company Secretary and Compliance Officer of the Company effective from 13th May, 2019.

Further, after end of the financial year Mr. Parimal Patwa were appointed on Board on 22nd May, 2020 as an as a Additional Non-Executive Non-Promoter and Non-Independent Director.

III. CESSATIONS:

During the year Ms. Barkha Deshmukh resigned as a company secretary and compliance officer of the company effective from 26th April, 2019.

IV. Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and Companies Articles of Association, Mr. Jayeshkumar A. Mehta retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment. Necessary resolution for his reappointment is placed before the shareholder for approval.

V. Familiarization Program of

Independent Directors

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Companys procedures and practices. The Company endeavors, through presentations at regular intervals, to familiarize the Independent Directors with the strategy, operations and functioning of the Company and also with changes in the regulatory environment having a significant impact on the operations of the Company and the industry as a whole The Independent Directors also meet with senior management team of the Company in informal gatherings. During the year 2019-20, the Company has conducted 6 programs for familiarizing the Directors for a total duration of 6 hours. The Policy on familiarization program for independent directors, role, responsibility and rights of independent directors is uploaded on www.sdalloys.com.

VI. Profile of Directors seeking appointment / reappointment

As required under regulation 36(3) of SEBI (LODR), 2015, particulars of the Directors retiring and seeking reappointment and appointment at the ensuing Annual General Meeting is annexed to the notice convening 13th Annual General Meeting.

VII. Key Managerial Personnel

As on the date of this report, the following persons are the Key Managerial Personnel(s) of the Company:

a) Mr. Satishkumar A. Mehta, Chairman & Managing Director b) Mr. Jayeshkumar A. Mehta, Whole Time Director c) Mr. Krishnakant P. Somani, Chief Financial Officer d) Mr. Nayan P. Pitroda, Company Secretary and Compliance Officer.

VIII.Declaration from Independent Director

All the Independent Directors of the Company have given their declarations stating that they meet the criteria of independence as prescribed under the Section 149(6) of the Companies Act, 2013 read with the rules made there under and in the opinion of the Board, the Independent Directors meet the said criteria.

During the year under review the Independent Directors duly met pursuant to the provisions as specified in Schedule IV of the Companies Act, 2013 and the quorum was present throughout the meeting.

12. Audit Committee

The Audit Committee is duly constituted in accordance with SEBI (LODR) Regulations 2015 and Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 as amended from time to time. It adheres to the terms of reference which is prepared in compliance with Section 177 of the Companies Act, 2013, and SEBI (LODR) Regulations 2015. The Members of the Committee are: -

Name Category & Position Num ber of meeti ngs held Number of meetings attended
Mr. Jitendrakumar Patel Non-Executive Independent Director Chairman 4 4
Mrs. Vinita Maheshwari Non-Executive Independent Director Member 4 4
Mr. Satishkumar A Mehta Managing Director Member 4 4

Two third of the members are Independent Directors and all the members are financially literate. The composition, role, functions and powers of the Audit Committee are in line with the requirements of applicable laws and regulations. The Audit Committee shall oversee financial reporting process and disclosures, review financial statements, internal audit reports, related party transactions, financial and risk management policies, auditors qualifications, compliance with Accounting Standards etc. and oversee compliance with Stock Exchanges and legal requirements concerning financial statements and fixation of audit fee as well as payment for other services etc.

Four Audit Committee meetings were held during the year 2019-20 at the Registered Office of the Company on 30/05/2019, 12/08/2019, 14/11/2019 and 03/02/2020.

13. Nomination and Remuneration

Committee

The Nomination and Remuneration Committee is constituted in accordance with SEBI (LODR) Regulations 2015 and Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 as amended from time to time. The Company Secretary acts as the Secretary to the committee and the Committee Members are:

Name Category & Position Number of meetings held Number of meetings attended
Mr. Jitendrakumar Patel Non-Executive Independent Director Chairman 2 2
Mrs. Vinita Maheshwari Non-Executive Independent Director Member 2 2
Mr. Hemendra B Patel Non-Executive Independent Director Member 2 2

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration of Directors, Key Managerial Personnel and other employees. The said policy is available on the website of the Company (www.sdalloys.com).

Two meeting was held during the year 2019-20 at the Registered Office of the Company on 26/04/2019 and 13/03/2019.

14. Stakeholders Relationship Committee

The Stakeholders Relationship Committee is constituted in compliance with the requirements of Section 178 of the Companies Act, 2013. Company Secretary is the Compliance Officer, who acts as the Secretary to the Committee and the Members of the Committee are:

Name Category & Position Number of meetings held Number of meetings attended
Mrs. Vinita P Maheshwari Non-Executive Independent Director Chairman 1 1
Mr. HemendrabhaiPatel Non-Executive Independent Director Member 1 1
Mr. Satishkumar A Mehta Managing Director Member 1 1

The Stakeholders Relationship Committee looks into shareholders complaints related to transfer of shares, non-receipts of balance sheet besides complaints from SEBI, Stock Exchanges, Court and various Investor Forums. It oversees the performance of the Registrars and Transfer Agent, and recommends measures for overall improvement in the quality of investor services. The Company is in compliance with the SCORES, which has initiated by SEBI for processing the investor complaints in a centralized web-based redress system and online redressal of all the shareholders complaints.

One meeting was held during the year 2019-20 at the Registered Office of the Company on 03/02/2020.

15. Compliance Officer

The Compliance officer of the Company is Mr. Nayan P. Pitroda, who is also designated as Company Secretary of the Company.

16. Statement on Formal Annual Evaluation of Board

Nomination and Remuneration Committee annually evaluates the performance of individual Directors, Committees, and of the Board as a whole in accordance with the formal system adopted by it. Further, the Board also regularly in their meetings held for various purposes evaluates the performance of all the Directors, committees and the Board as a whole. The Board considers the recommendation made by Nomination and Remuneration Committee in regard to the evaluation of board members and also tries to discharge its duties more effectively. Each Board members contribution, their participation was evaluated and the domain knowledge they bring. They also evaluated the manner in which the information flows between the Board and the Management and the manner in which the board papers and other documents are prepared and furnished.

17. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date or report.

Due to spread of Novel Corona Virus (COVID-19) our Plant located in Santej, Gandhinagr was dosed from March 23, 2020 to April 20, 2020 (28 days) however, we got permission on April 20, 2020 from concerned authorities, subject to fulfilment of certain conditions, to partially start production operations. And further as on date of report there is shortage of labors as the labors have returned to their places because of Pandemic.

18. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concerns status and

Companys operations in future.

19. Auditors

1. Statutory Auditors

M/s. Piyush J Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, were reappointed at the 09th Annual General Meeting held on 30th September 2016 to hold office from the conclusion of Ninth (9th) Annual General Meeting (AGM) till the conclusion of 14th Annual General Meeting to be held in the year 2021 (subject to ratification of their appointment at every AGM).

In accordance with the Companies Amendment Act, 2017, enforced on 7thMay, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

There are no qualifications, reservations or adverse remarks made by M/s. Piyush J Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, in their report.

2. Secretarial Auditor

M/s. Khandelwal Devesh & Associates, Company Secretaries, Ahmedabad were appointed as Secretarial Auditor of the Company to conduct secretarial audit pursuant to the provisions of Section 204 of the Companies Act, 2013. The secretarial audit of the Company has been conducted on a concurrent basis in respect of the matters as set out in the said rules and Secretarial Audit Report given by M/s. Khandelwal Devesh & Associates, Company Secretaries, Secretarial Auditor of the Company forms part of this report and is marked as Annexure-‘II.

There are no qualifications, reservations or adverse remarks made by M/s. Khandelwal Devesh & Associates, Company Secretaries, Secretarial Auditor of the Company, in their report.

The Company has also undertaken an audit for the FY 2019-20 pursuant to SEBI Circular No. CIR/CFD/ CMO/I/27/2019 dated 08th February 2019 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circular/ Guidelines issued thereunder. The Report (Annual Secretarial Compliance Report as per Regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015) has been submitted to the Stock Exchanges. The said report is Annexed as

Annexure- ‘III.

Further as per the provisions of Regulation 24A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s.

Khandelwal Devesh & Associates, Company Secretaries, had undertaken secretarial audit of the Companys material subsidiary i.e., Sagardeep Engineers Private Limited for the FY 2019 20. The Audit Report confirms that the material subsidiary has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations or non-compliances.

The Board, at its meeting held on 27 July, 2020, has re-appointed M/s. Khandelwal Devesh & Associates, Company Secretaries, as Secretarial Auditor, for conducting Secretarial Audit of the Company for FY 2020 21.

20. Personnel

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Report and marked as Annexure- ‘IV. No employee of the Company was in receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

21. Managements Discussion and Analysis

Report

The Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (2) (e) of the Listing Regulations is given as Annexure- ‘V to this report.

22. Board Evaluation

The Board carried out an annual performance evaluation of its own performance, the performance of the Independent Directors individually as well as the evaluation of the working of the Committees of the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. Details of the same are given in the Report on Corporate Governance annexed hereto.

23. Corporate Social Responsibility (CSR)

The provisions of Corporate Social Responsibility (CSR) are not applicable to the Company.

24. Conservation of energy, technology absorption and foreign exchange earnings and outgo

A. CONSERVATION OF ENERGY: i. the steps taken or impact on conservation of energy: Nil ii. the steps taken by the company for utilising alternate sources of energy:

None iii. the capital investment on energy conservation equipment: Nil

B. TECHNOLOGY ABSORPTION: i. the efforts made towards technology absorption: None ii. the benefits derived like product improvement, cost reduction, product development or import substitution: None iii. 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: None b) the year of import: N.A. c) whether the technology been fully absorbed: N.A. d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof:

N.A. e) the expenditure incurred on Research and Development: Nil

C. Foreign exchange Earnings & Outgo

Foreign Exchange Earning: NIL

Foreign Exchange Outgo: NIL

24. Particulars of contracts or arrangements with related parties:

The Company has no material significant transactions with its related parties which may have potential conflict with the interest of the Company at large.

25. Statement regarding the development and implementation of Risk Management Policy

The Company has not developed and implemented any risk management policy as the risk threatening the business activity carried out by the Company during the year are minimal.

26. Prevention of Sexual Harassment at

Workplace

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has constituted Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment.

Your Directors declared and confirm that, during the year under review, there is no case filed under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

27. Vigil Mechanism:

The Company believes in the conduct of its affairs in a fair and transparent manner to foster professionalism, honesty, integrity and ethical behavior in its employees & stakeholders. The Company has adopted a Whistle Blower Policy as a part of vigil mechanism.

Also, the Code of Business Conduct (Code) lays down important corporate ethical practices that shape the Companys value system and business functions and represents cherished values of the Company.

28. Adequacy of Internal Financial Control

The Company has designed and implemented a process driven framework for Internal

Financial Controls (‘IFC) within the meaning of the explanation to Section 134(5)(e) of the Act. For the year ended March 31, 2020, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Companys operations.

During the year, no reportable material weakness was observed.

29. Directors Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

(a) In the preparation of the annual accounts for the financial year ended March 31, 2018, 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 were 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 under review.

(c) The directors have 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 have 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.

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

30. Listing

The equity shares of the Company are listed on of NSE and the Company has paid the annual listing fees for the year 2020-21.

31. Corporate Governance

Your Company has been complying with the principals of good Corporate Governance over the years and is committed to the highest standards of compliance. Pursuant to regulation 15(2) of the SEBI (LODR) Regulations 2015, w.e.f. 25/01/2019 Companys shares are listed on the Mainboard i.e. NSE and therefore the Provisions and Regulations relating to Corporate Governance were effective from said date. The Report on Corporate Governance is attached as Annexure ‘VI.

32. Installation of New Plant and Machinery into

Existing Line of Business

The Company have completed the installation work for new plant and machinery at its existing factory at Plot No. 2070, Rajnagar Patiya, Behind GEB Sub-station, Santej Khatraj Road, Santej 382721. Tal: Kalol, Dist: Gandhinagar, which also includes upgradation of some of existing machinery. The Company will produce Copper busbar, copper strips, copper plates, copper wire to be used in electric cable. It is to be noted that the Company is already producing busbar from its existing plant. The new plant and machinery will help the company to reduce production cost and also to improve quality. Further details are annexed as Annexure ‘VII.

33. Secretarial Standards:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

34. Acknowledgement:

The Directors place on record their sincere thanks to the Bankers, business associates, consultants, customers, and employees for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

Date: 27/07/2020
Place: Santej
For and on behalf of board of directors
Satishkumar A Mehta
Chairman & Managing Director
(DIN: 01958984)