Sagardeep Alloys Ltd Auditors Report.

TO,

THE MEMBERS OF

SAGARDEEP ALLOYS LIMITED

Opinion

We have audited the accompa panying standalone financial statements of SAGARDEEP ALLOYS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Profit and Loss Statement, the Cash Flow Statement for the Period ended and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explan planations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018 and its profit and its cash flows for the year/period ended on that date.

Basis of Our Opinion

We conducted our audit in accordance with the standard on auditing (SAs) specified under section 143(10) of the companies act, 2013. Our responsibilities under those standards are further described in the auditor’s respo sponsibilities for the audit of the financial statem tements section of our report. We are independent of the company in accordance with the code ethics issued by the institute of chartered accountan tants of India together with ethical requirements that are relevant to our audit of financial statement under the provisions of the companies act, 2013 and rules there under, and we have fulfilled our ethical responsibilities in accordance with these requirements and the code of ethics. We be ieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide separate opinion on these matters.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accor cordance with the accounting principles generall accepted in India including the Accounting Stand tandards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rule ules, 2014. This responsibility also includes maintenance of adequate accounting records in accordanc with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevan to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstateme ement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial state tatements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Stand tandards require that we comply with ethical req irements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures select depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expres ing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s directo as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appro propriate to provide a basis for our audit opinion on the standalone financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) In our opinion, proper boo of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) Not Applicable; d) the balance sheet, the state tatement of profit and loss dealt with by this Repo are in agreement with the books of account; e) In our opinion, the afores id financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; f) Not Applicable g) On the basis of the writte representations received from the director as on 31stMarch, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31stMarch, 2018, from being appointed as a director in terms of Section 164 (2) of the Act. h) Not Applicable i) In our opinion, the compa mpany has adequate internal financial control system in place and operating effectively. j) With respect to the othe matters included in the auditor’s report and to best of our information and according to the explanation given to us.

1. The company has disclo sclosed the impact of pending litigation on its financial position in its financial statement, if any.

2. The company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

3. There has been no delay in transferring amounts, required to be transferred, to the investor’s education and protection fund by the company, if any.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018

Annexure - A to the Auditors Report

The Annexure referred to in our Independent Auditors Report to the membe mbers of the Company on the standalone financial state tatements for the Period 01-04-2017 to 31-03-2018, we report that: i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. (c) The title deeds of immovable properties are held in the name of the company.

ii) The Inventories have been physically verified during the year by the management. In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compar pared to book records and the same has been properly dealt with in books of accounts.

iii) The Company had not granted loan to parties covered in the register maintained under section 189 of the Comp mpanies Act, 2013 (‘the Act’). (a) Not Applicable (b) Not Applicable (c) Not Applicable

iv) In our opinion and acco ccording to the information and explanations give to us in respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013 had been complied with.

v) The company had not accepted any deposits from public, therefore the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 o any other relevant provisions of the Compa ies Act, 2013 and the rules framed there unde is not applicable.

vi) The Central Governme had prescribed the maintenance of cost records under section 148(1) of the Act, for th goods supplied by the Company. In our opinion and according to the information and explanations given to us the company had maintained proper cost records.

vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accr ccrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have bee regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees state insurance and duty of excise.

According to the infor nformation and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to explanations given to us the following dues of sales tax have not been deposited by the company on account of dispute:

Name of Statue Nature of Dues Amount (In ) Period to which Relates Forum Where Dispute is pending
Gujarat VAT Act Sales Tax, Intere and Penalt 23,28,175/- 2009-10 DCCT-A
Gujarat VAT Act Sales Tax, Intere and Penalt 4,82,00,824/- - Tribunal
Gujarat VAT Act Sales Tax, Intere and Penalt 1,83,85,414/- 2010-11 DCCT-A
Gujarat VAT Act Sales Tax, Intere and Penalt 40,96,251/- 2011-12 DCCT-A
Gujarat VAT Act Sales Tax, Interest and Penalty 80,758,272/- 2013-14 DC-Appeal-1

viii) The company had not defaulted in repayment of loans or borrowing to a financial institution, bank, Gover vernment or dues to debenture holders.

ix) According to the inform formation and explanations given to us the comp ompany had not raised any money by way of Initial Public Offer or Further Public Offer and term loans.

x) According to the inform ormation and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

xi) According to the inform ormation and explanations given to us, managerial remuneration had been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion the comp ompany is not nidhi company. Therefore the provisions as mentioned in the Nidhi Rules, 2014 are not applicable to the company. xiii) In our opinion and according to the information and explanations given to us all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have bee disclosed in the Financial Statements etc., as required by the applicable accounting standards.

xiv) According to the inform formation and explanations given to us, the comp ompany had not made preferential allotment of shares during the year/period under review and the requirement of section 42 of the Com ompanies Act, 2013 and other provisions are not applicable.

xv) According to the inform ion and explanations given to us the compa pany had not entered into any non-cash transa ansactions with directors or persons connected with him.

xvi) In our opinion, the company is not a Non Banking Finance Comp ompany, therefore the requirement to register under section 45-IA of the Reserve Bank of India Act, 1934 in not applicable.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018

Annexure - B to the Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Sagardeep Alloys Limited ("the Company") as of 31st March, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the mainten tenance of records that, in reasonable detail, accu curately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accou ing principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statemen .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subje to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate inter nternal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the internal control over financial reporting criteria established by the Com ompany considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Acco ccountants of India.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018

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Directors’ Report

Dear Members,

Your Directors take pleasure in presenting the 11th Annual Report along with Audited Financial Statements of your Company for the financial year ended 31st March, 2018.

1. Financial Results

During the year under review, your Company has achieved a tota net sale of Rs.6240.59 lakhs and achieve Net Profit after Tax (NP) of Rs.54.53 lakhs. There is notable increase in profit after tax during the current year in comparison to that of previous year. Your directors are optimistic about the performance of the Company in the coming years. The financial highlights for the year 2017-18 are as unde

Particulars for the year ended March 31, 2018 March 31, 2017
Net revenue from Operations (Sales) 6240.59 7252.79
Profit Before Depreciation and Tax 117.73 84.39
Less: Depreciation 39.56 39.50
Profit Before Tax 78.17 44.89
Less: Tax Expense 23.34 17.73
Profit After Tax 54.53 27.16
EPS (Basic) 0.48 0.25
EPS (Diluted) 0.48 0.25

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, 2018.

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-

During the year, the Compan altered its Main Object Clause of the Memorandum of

Association of the Company through shareholders approval by postal ballot and the same became effective w.e.f. 28/11/2017. Through the said alteration, the Company added one new object to its main object clause apart from the existing one. The Company also adopte new set of memorandum of association which is in consonance with new Companies Act, 2013 and latest amendments.

5. Reserves

During the year under review, the Company has not transferred any amount to reserve.

6. Subsidiary, Joint Ventures and Associate Companies

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

7. Consolidated Financial Statement

The Financial Statement of the Company for the Financial year 2017-18 are prepared in compliance with the applicable provisions of the Act, Accounting Standards and as prescribed by Securities and Exchange Board of India (SEBI) und nder SEBI (Listing Obligations and Disclos closure 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 docum cuments 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 com iance 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/bod corporates and the particulars of such loans, falling under the provisions of Section 186 of the Companies Act, 2013 are pro ided in the notes to financial statements of the Company

10. Extract of the annual return

The extract of the Annual Retu eturn in Form-9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administra ion) Rules, 2014 is furnished in Annexure A and is attached to the report.

11. Directors& Key Management Personnel

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 date of this report, 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 07/04/2017, 25/05/2017, 17/07/2017, 17/10/2017, 14/11/2017 and 07/03/2018 during the year. The Composition, category and attendance of each Director at the Board and Annual General Meeting of each Director in various compa ies is as follows:-

Name of Director , Designation and Category No of Board Meetings held during the year No of Board Meetings attend ed during the year Attendance at the AG M
Mr. Satishkumar A Mehta 6 4 Yes
Chairman & Managing Director Promoter
Mr. Jayeshkumar A Mehta 6 6 Yes
Whole Time Director Promoter
Mr. Hemendra B Patel 6 6 Yes
Non-Executive Director Independent
Mrs. Vinita P Maheshwari 6 6 Yes
Non-Executive Director Independent
Mr. Jitendra Patel 6 6 Yes
Non-Executive Director Independent

INDUCTIONS

The following appointments were made during the year

Mr. Jitendrakumar Dhanjibhai Patel who was appointed as an additional independent director of the Company effective from 23/02/2 02/2017 was appointed as independent direct rector by shareholders in their 10th Annua General meeting held on 21st Septembe 2017 for a period of five years.

Ms. Barkha Deshmu hmukh, a member of Institute of Company Secretaries of India was appointed as the Company Secretary and Compliance Officer of the Company effective from 07th Ap il, 2017.

Mr. Krishnakant Somani was appointed as the Chief Financial Officer of the Company effective from 17th July, 2017.

CESSATIONS:

Mr. Dileep Panchal resigned as a company secretary and compliance officer of the company effective from 07th April, 2017.

Mr. Hemang Panchal resigned as an independent director of the Company effective from 17th July, 201 .

Mr. Asamal Mehta & Mr. Harishkumar Mehta resigned as Whole time directors of the Company effective from 17th July, 2017.

Mr. Bhavik Somani resigned as Chief Financial Officer of the Company effective from 17th July, 201 .

Retirement by Rotation

In accordance with the pro isions of the Companies Act 2013 and Companies Articles of Association, Mr. Jayeshkumar A Mehta (DIN-02156140) 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.

Profile of Directors seeking appointment / reappointment

As required under regulation 36(3) of SEBI (LODR), 2015, particulars of the Directors retiring and seeking reappointment at the ens ing Annual General Meeting is annexed to the notice convening 11th Annual Gene eneral Meeting.

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 Direct c) Mr. Krishnak nakant Somani, Chief Financial Officer d) Ms. Bark arkha Deshmukh, Company Secretary

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. Postal ballot

During the year, pursuant to Section 110 of the Companies Act, 201 read with the Companies (Management and Administration) Rules, 2014 (including any statutory amendment(s) or re-enactment(s) made thereunder), your Com ompany passed the following resolution throu rough postal ballot as per the details below:

Date of Postal ballot Notice: 17/07/2017 Date of declaration of result: 30/11/2017 Voting period: 30/10/2017 to 28/11/2017 Date of approval:28/11/20 /2017

Name of resolution Type of resoluti on No. of votes polled

Votes cast in favour

Votes cast against

No. of votes % No. of vot es %
Alteration in main object clause of Memorandum of Association Special 874360 8743600 100 0 0
Adoption of new Memorandum of Association of the Company Special 8743600 8743600 100 0 0

13. 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 refere ference which is prepared in compliance with Section 177 of the Companies Act, 2013, and SEBI (LODR) Regulations 2015. The Mem embers of the Committee are:-

Name Category & Position Number of meetings held Number of meetings attend ed
Mr. Jitendrakumar Patel 4 4
Non Executive Independent Director Chairman
Mrs. Vinita Maheshwari 4 4
Non Executive Independent Director Member
Mr. Satishkumar A Mehta 4 3
Executive Director Member

Two third of the members are Independent Directors and all the members are financially literate. The composition, role, functions and powers of the Audit Committe are in line with the requirements of applicable laws and regulations. The Audit Com ommittee 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 Exchan hanges and legal requirements concer ing financial statements and fixation of audit fee as well as payment for other service etc.

Four Audit Committee meetings were held during the year 2017-18 at the Registered Office of the Compan on 25/05/2017, 13/07/2017, 14/11/2017, 07/03/2018. The Company Secretary acts as Secretary to the Audit Committee and no personnel has been denied access to the Audit Committee.

14. Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted in accordance with SEBI (LODR) Regulation 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 2 2
Non Executive Independent Director Chairman
Mrs. Vinita Maheshwari 2 2
Non Executive Independent Director Member
Mr. Hemendra B Patel 2 2
Non Executive Independent Director Member

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 remune uneration of Directors, Key Managerial Perso ersonnel and other employees. The said policy is available on the website of the Company (www.sdalloys.com).

Two meeting was held during the year 2017-18 at the Registered Office of the Company on 07/04/2017 and 17/07/2017.

15. 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 Committe and the Members of the Committee are:

Name Category Position
Mrs. Vinita P Maheshwari Non Executive Independent Director Chairman
Mr. Hemang M Panchal Non Executive Independent Director Member
Mr. Satishkumar A Mehta Executive Director Member

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 perform formance 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 investo complaints in a centralized web based redress system and online redressal of all the shareholders complaints.

16. Compliance Officer

The Compliance officer of the Company is Ms. Barkha Deshmukh, who is also designated as Company Secre ecretary of the Company.

17. 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 recomme mendation made by Nomination and Remun uneration Committee in regard to the evaluation of board members and also tries to dischar harge its duties more effectively. Each Board member’s contribution, their participation was evaluated and the domain knowledge they bring. They also evaluat luated the manner in which the information flows between the Board and the Manageme ement and the manner in which the board papers and other documents are prepared and furnished.

18. 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.

19. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

There are no significant and material orders passed by the regulat ulators or courts or tribunals impacting the going concerns status and Company’s operations in future.

20. Auditors

1. Statutory Auditors

M/s. Piyush J Shah & Co., Chartered Accountants, the Statuto 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 concl nclusion 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, enforce on 7th May, 2018 by the Ministry of Corp orporate 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. Cost Auditors

As per the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors Rules, 2014 framed thereunder and the Cost Audit orders issued from time to time, the Board of Directors in their meeting held on 17.07.2017 has appointed M/s. Soni & Associates, Cost Accountants (FRN 102850) as Cost Auditor of the Company for the financial year 2017-18. Further, the remuneration of the Cost Auditor was ratified by members of the Com ompany in their annual general meeting held on 21.09.2017.

3. SECRETARIAL AUDITOR

M/s. Khandelwal Devesh & Associates, Company Secretaries, Ahme medabad were appointed as Secretarial Auditor of the Company to conduct secre ecretarial 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-"B".

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.

21. Personnel

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Man anagerial Personnel) Rules, 2014 is provided in the Report and marked as Annexure-"C". 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.

22. Management’s Discussion and Analysis Report

The Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (2) (e) of the Listing Regulations is given as Annexure-"D" to this report.

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 inve nvestment on energy conservation equipments : Nil

B. TECHNOLOGY ABSORPTION: i. the efforts mad towards technology absorption : None ii. the benefits derived like product improvement, cos reduction, product developme ment 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: Rs.25,41,836/-

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 managem gement 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 Harassm assment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

27. Adequacy of Internal Financial Control

The Company has in plac adequate internal financial controls with reference to financial statements. The Board has inter alia reviewed the adequacy and effectiveness of the Company’s internal financial controls relating to its financial statements. During the year, no reportable material weakness was observed.

28. 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 depar partures.

(b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reaso easonable 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 prepare the annual accounts on a going concern basis.

(e) The directors had laid down internal financial controls to be follo ollowed by the company and that such inter nternal 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.

29. Listing

The equity shares of the Compa mpany are listed on SME platform of NSE (NS EMERGE) and the Company has paid the annual listing fees for the year 2018-19.

30. Corporate Governance

Your Company has been comply plying 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, the compliance with the corporate governance provision as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46 (2) and para C, D and E of schedule V shall not apply to the listed entity which has listed its specified securities on the SME Exchange.

Therefore, the Corporate Governance Report is not applicable on the Company and therefore not provided by the Board.

31. Acknowledgement: The Directors place on record their sincere than to the Bankers, business associates, consu nsultants, customers, and employees for their continued support extended to your Companies activities during the year unde review. Your Directors also acknowled ledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of board of directors
Date: 28/05/2018 Satishkumar A Mehta
Place: Ahmedabad Chairman & Managing Director (DIN: 01958984)

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SECRETARIAL AUDIT REPORT

Form No. MR-3

FOR THE FINANCIAL YEAR ENDED 31st March, 2018 [Pursuant to section 204(1 of the Companies Act, 2013 and rule No.9 of the Companies (Appointme tment and Remuneration Personnel) Rules, 2014]

To,

The Members,

Sagardeep Alloys Limited

Ahmedabad, Gujarat.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corpora practices by SAGARDEEP ALLOYS LIMITED (CIN: L29253GJ2007PLC050007) (her inafter called the company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, form and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2018 (‘Audit Period’) complied with the statutory provisions listed hereunder and also tha the Company has proper Board-processe and compliance-mechanism in place to the exten in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2018 according to the provisions of:

i. The Companies Act, 201 (the Act) and the rules made there under.

ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the exten of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowing.

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regu egulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 201 .

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. (not applicable to the company during the audit period)

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 201 (not applicable to the company during the audit period)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 200 (not applicable to the company during the audit period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 200 (not applicable to the company during the audit period);

(h) The Securities and Exchange Board of India (Buyback of Secu ities) Regulations, 1998 (not applicable to the company during the audit period);

I have relied on the represent sentations made by the Company and its officers for systems and mechanism formed by the Com ompany for compliances of other specific applicable Acts, Laws and Regulations to the Company as mentioned hereunder; a) The Employ loyees’ Provident Funds and Miscellaneous Provisions Act, 1952 b) Employees’ State Insurance Act, 1948 c) The Factories Act,1948 d) The Minimum Wages Act, 1948, and rules made there unde nder I have also examined complianc with the applicable Clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secr ecretaries of India; (ii) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standa ndards, etc. mentioned above.

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Board take decision by majority of directors while the dissenting directors’ views are captured and recorded as part of the minutes.

I further report that:

There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable Laws, Rules, Regulations and guidelines.

I further report that there were no other instances of:

(i) Public/Rights/Preferential issue of Shares/debentures/sweat equity. (ii) Redemption/buy-back of securities.

(iii) Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013 (iii) Merger/ amalgamation etc.

(iv) Foreign technical collaborations.

For, Khandelwal Devesh and Associates,
Company secretaries,
Devesh Khandelwal
Proprietor
FCS: 6897,
COP No.:4202
Place: Ahmedabad
Date:28/05/2018

Note: This report is to be read with my letter of even date which is annexed as Annexure herewith and forms and integral part of this report.

Annexure to Secretarial Audit Report

To,

The Members,

Sagardeep Alloys Limited Ahmedabad, Gujarat.

My report of even date is to be read along with this letter.

Maintenance of secret ial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.

I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial reco cords. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the proces cesses and practices, I followed provide a reaso asonable basis for my opinion.

I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Compan pany.

Wherever required, I have obtained the Management represen esentations about the compliance of Laws, Rules and Regulations and happening of events etc.

The compliance of the provisions of corporate and other applicable Laws, Rules, Regulations, Standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the managem agement has conducted the affairs of the Compa pany.

For, Khandelwal Devesh and Associates,

Company Secretaries,

Devesh Khandelwal

Proprietor

FCS: 6897,

COP No.:4202

Place: Ahmedabad

Date:28/05/2018

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Management’s Discussion And Analysis

INDUSTRY STRUCTURE & DEVELOPMENT

The size of Indian copper indu ndustry (consumption of refined copper per annu is around half a million tones which constitute only 3 percent of the world copper market. Sterlite Industries, Hindalco Industries and Hindus dustan Copper are major producers of refined copper in India. India has emerged as net exporter of copper from the status of net importer on account of rise in production. In fact, copper as a metal came in use of man much earlier than iron. Copper has been used for making utensils and coins since long. Being a good conductor of electricity and ductile, it is extensively used in a vast variety of electrical machinery, wires and cables. It is also an important metal used by autom tomobile and defense industries. Further, it is alloyed with iron and nickel to make stainless steel, with nickel to make ‘morel metal’ and with aluminium to make ‘duralumin’. When alloyed with zinc it is known as ‘brass’ and with tin ‘bronze’. Copper ore is found in ancient as well as in younger rock formations and occurs as veins, as dissemination and as bedded deposits. Mining for copper is a costly and a tedious affair because most of the copper ores contain a small percentage of the metal. Against the international averag of metal content (in the ore) of 2.5 per cent, Indian ore grade averages less than one per cent.

OPPORTUNITIES AND THREATS

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. During the financial year 2017-18, major decision of indu ing into different business activities was tak in order to widen the operation of the Company. Looking into the opportunities into new business line, your directors are optimistic about future expansion and growth of our Company. Despite of identifying opportunities, there is always risk associated to it like Competition General Economic and Business Conditions, legal and regulatory compliance etc.

OUTLOOK, RISKS & CONCERNS

Our Outlook, risks and concern are as follows:

• A large part of our revenue depends on our top clients and loss of any one of major client may lead to negative impact on our business.

• Our success depends on our top management and key personnel and our ability to attract and retain them.

• Changes in policies of government of India or political instability may adversely affect economic conditions in India, which may lead to negative impact on our business.

• Any natural calamities such as earthquakes, storms, fire etc. may tend to affect our operational efficiency negatively.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has an adequate internal control system commensurate with its size and the nature of its business in order to achieve efficiency in operation and optimum utilization of resources. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

FINANCIAL AND OPERATIONAL PERFORMANCE

(Amount In lacs)

Particulars for the year ended March 31, 2018 March 31, 2017
Net revenue from Operations (Sales) 6240.59 7252.79
Profit Before Depreciation and Tax 117.73 84.39
Less: Depreciation 39.56 39.50
Profit Before Tax 78.17 44.89
Less: Tax Expense 23.34 17.73
Profit After Tax 54.53 27.16
EPS (Basic) 0.48 0.25
EPS (Diluted) 0.48 0.25

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The industrial relations remained cordial throughout the year. The employe of the Company have extended a very productive cooperation in the efforts of the manage agement to carry the Company to greater heights. Continuous training down the line is a normal feature in the Company to upgrade the skills and knowledge of the employees and workmen of the Company.

CAUTIONARY STATEMENT

Statement in this report describing the Company’s objectives, expectations or predictions may be forward looking statements 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 company’s operations include economic conditions affecting demand / supply and price condition in the domestic markets in which the company opera erates, changes in the government regulations, tax law and other statutes and other incidental factor .

For and on behalf of the Board of Directors
Date: 28/05/2018 Satishkumar Mehta
Place: Ahmedabad Chairman & Managing Director
(DIN: 01958984)

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Independent Auditors’ Report

TO,

THE MEMBERS OF

SAGARDEEP ALLOYS LIMITED

Opinion

We have audited the accompa panying standalone financial statements of SAGARDEEP ALLOYS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Profit and Loss Statement, the Cash Flow Statement for the Period ended and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explan planations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018 and its profit and its cash flows for the year/period ended on that date.

Basis of Our Opinion

We conducted our audit in accordance with the standard on auditing (SAs) specified under section 143(10) of the companies act, 2013. Our responsibilities under those standards are further described in the auditor’s respo sponsibilities for the audit of the financial statem tements section of our report. We are independent of the company in accordance with the code ethics issued by the institute of chartered accountan tants of India together with ethical requirements that are relevant to our audit of financial statement under the provisions of the companies act, 2013 and rules there under, and we have fulfilled our ethical responsibilities in accordance with these requirements and the code of ethics. We be ieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide separate opinion on these matters.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accor cordance with the accounting principles generall accepted in India including the Accounting Stand tandards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rule ules, 2014. This responsibility also includes maintenance of adequate accounting records in accordanc with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevan to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstateme ement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial state tatements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Stand tandards require that we comply with ethical req irements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures select depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expres ing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s directo as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appro propriate to provide a basis for our audit opinion on the standalone financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) In our opinion, proper boo of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) Not Applicable; d) the balance sheet, the state tatement of profit and loss dealt with by this Repo are in agreement with the books of account; e) In our opinion, the afores id financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; f) Not Applicable g) On the basis of the writte representations received from the director as on 31stMarch, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31stMarch, 2018, from being appointed as a director in terms of Section 164 (2) of the Act. h) Not Applicable i) In our opinion, the compa mpany has adequate internal financial control system in place and operating effectively. j) With respect to the othe matters included in the auditor’s report and to best of our information and according to the explanation given to us.

1. The company has disclo sclosed the impact of pending litigation on its financial position in its financial statement, if any.

2. The company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

3. There has been no delay in transferring amounts, required to be transferred, to the investor’s education and protection fund by the company, if any.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018

Annexure - A to the Auditors Report

The Annexure referred to in our Independent Auditors Report to the membe mbers of the Company on the standalone financial state tatements for the Period 01-04-2017 to 31-03-2018, we report that: i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. (c) The title deeds of immovable properties are held in the name of the company.

ii) The Inventories have been physically verified during the year by the management. In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compar pared to book records and the same has been properly dealt with in books of accounts.

iii) The Company had not granted loan to parties covered in the register maintained under section 189 of the Comp mpanies Act, 2013 (‘the Act’). (a) Not Applicable (b) Not Applicable (c) Not Applicable

iv) In our opinion and acco ccording to the information and explanations give to us in respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013 had been complied with.

v) The company had not accepted any deposits from public, therefore the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 o any other relevant provisions of the Compa ies Act, 2013 and the rules framed there unde is not applicable.

vi) The Central Governme had prescribed the maintenance of cost records under section 148(1) of the Act, for th goods supplied by the Company. In our opinion and according to the information and explanations given to us the company had maintained proper cost records.

vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accr ccrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have bee regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees state insurance and duty of excise.

According to the infor nformation and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to explanations given to us the following dues of sales tax have not been deposited by the company on account of dispute:

Name of Statue Nature of Dues Amount (In ) Period to which Relates Forum Where Dispute is pending
Gujarat VAT Act Sales Tax, Intere and Penalt 23,28,175/- 2009-10 DCCT-A
Gujarat VAT Act Sales Tax, Intere and Penalt 4,82,00,824/- - Tribunal
Gujarat VAT Act Sales Tax, Intere and Penalt 1,83,85,414/- 2010-11 DCCT-A
Gujarat VAT Act Sales Tax, Intere and Penalt 40,96,251/- 2011-12 DCCT-A
Gujarat VAT Act Sales Tax, Interest and Penalty 80,758,272/- 2013-14 DC-Appeal-1

viii) The company had not defaulted in repayment of loans or borrowing to a financial institution, bank, Gover vernment or dues to debenture holders.

ix) According to the inform formation and explanations given to us the comp ompany had not raised any money by way of Initial Public Offer or Further Public Offer and term loans.

x) According to the inform ormation and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

xi) According to the inform ormation and explanations given to us, managerial remuneration had been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion the comp ompany is not nidhi company. Therefore the provisions as mentioned in the Nidhi Rules, 2014 are not applicable to the company. xiii) In our opinion and according to the information and explanations given to us all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have bee disclosed in the Financial Statements etc., as required by the applicable accounting standards.

xiv) According to the inform formation and explanations given to us, the comp ompany had not made preferential allotment of shares during the year/period under review and the requirement of section 42 of the Com ompanies Act, 2013 and other provisions are not applicable.

xv) According to the inform ion and explanations given to us the compa pany had not entered into any non-cash transa ansactions with directors or persons connected with him.

xvi) In our opinion, the company is not a Non Banking Finance Comp ompany, therefore the requirement to register under section 45-IA of the Reserve Bank of India Act, 1934 in not applicable.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018

Annexure - B to the Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Sagardeep Alloys Limited ("the Company") as of 31st March, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the mainten tenance of records that, in reasonable detail, accu curately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accou ing principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statemen .

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subje to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate inter nternal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the internal control over financial reporting criteria established by the Com ompany considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Acco ccountants of India.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Piyush J. Shah

Partner

M. No: 108670

Place: Ahmedabad

Date: 28th May, 2018