Sangal Papers Ltd Directors Report.

To,

The Members,

We have the pleasure in presenting Fortieth (40th) annual report of business and operation of your Sangal Papers Limited ("The Company"), along with the standalone audited yearly financial statements for the financial year ended 31st March, 2020.

COMPANY OVERVIEW

Sangal Papers Limited (herein called "The Company") was incorporated in the year 1980. The forty year old Company is a manufacturer of Newsprint, Writing & Printing paper and other various special paper for domestic and exports markets. Each of these products is targeted to meet unique and changing needs of our customers.

The prevailing pandemic has challenged the industry with many obstacles, but reinventing ourselves continuously has helped the company to face these challenges and maintain a sustainable growth. We at Sangal Papers also believe that our employees are the backbone of our company and aims at safeguarding the health of employees. With this philosophy we have set up a CoVID helpdesk to ensure the employees safety by educating the employees about the virus and ensuring that the protocols are followed.

FINANCIAL RESULT

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 (including any modification if any). The standalone financial highlights of your Company for the Financial Year ended March 31st, 2020 are summarized as follow, details are based on:

Details of financials as per IND AS: Amt. in Rs Lakhs

Particulars Current Financial Year (2020) Previous Financial Year (2019)
Revenue from Operations 12568.74 14823.40
Other Income 83.05 114.96
Total Income of the Company 12651.79 14938.36
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense 516.44 1017.62
Less: Depreciation/ Amortisation/ Impairment 129.32 117.80
Profit before Finance Costs, Exceptional items and Tax Expense 387.12 899.82
Less: Finance Costs 196.73 167.22
Profit before Exceptional items and Tax Expense 190.39 732.6
Add/(less): Exceptional items 0 0
Profit before Tax Expense 190.39 732.6
Less: Tax Expense (Current & Deferred) 10.12 118.96
Profit for the year (1) 180.27 613.64
Other Comprehensive Income (2) (3.10) 3.80
Total Comprehensive Income (1+2) 177.17 617.44
Balance of profit /loss for earlier years 2960.87 2343.43
Add: Revaluation Reserve 48.56 48.56
Balance carried forward 3186.6 3009.43

SHARE CAPITAL

The issued capital, subscribed capital and paid up equity share capital of the Company as on March 31st, 2020 was Rs. 1,30,72,600 (Rupees One Crore Thirty Lakhs Seventy Two Thousand Six Hundred only) divided in to 13,07,260 (Thirteen Lakh Seven Thousand Two Hundred Sixty) equity shares of Rs. 10/- each, fully paid up.

RESERVE

The Board of Directors of your company has decided to transfer the profit into the reserve of the company. DIVIDEND

The Board of Directors of your Company, after considering holistically the relevant circumstances and keeping in view the companys dividend distribution policy, has decided that it would be prudent, not to recommend any dividend for future growth of the company for the year under review.

OPERATIONAL REVIEW

Management of the Company deployed the skills and efforts for achieving its objectives and goals. In order to achieve the ultimate goal of maximizing the networth of shareholders of the Company by legitimate and fair means, while discharging its obligations towards the society and environment through the Corporate Social Responsibility. The management aims to be more economical and to bring efficiency in the operations of the company.

The company is regularly exploring for growth opportunities in its domestic and international market, over last few years the Company has moved closer to the ultimate consumers and has remained successful in positioning its products in a way that consumers can connect with it. The Company has maintained international standards in its products. But due to economic slowdown as compared to last year, the demand of paper decreases sharply. However, despite unfavourable conditions for paper sector, our economy was able to fullfill all its debt obligations. The profit after tax (PAT) has decreased significantly by around 70% (approx) as compared to last year.

The Company has recorded a decline in revenue of 15% (approx.) across all segments as compared to last year. During the year under review the Company has achieved a turnover (Revenue from Operations) of Rs. (In lakhs) 12568.74/- as against previous figure of Rs. (In lakhs) 14823.40/- decrease in sale by 15% (approx).

During the year under review PBT (Profit Before Tax) was Rs. (In lakhs) 190.39/- as compared to previous year figure of Rs. (In lakhs) 732.6/-, posting a decrease by 74.01 % (approx) in PBT. Net profit and PAT (profit after tax and other comprehensive income) were Rs. (In lakhs) 177.17/- as compared to previous year figure of Rs. (In lakhs) 617.44/- reporting a decrease of 71.31% (approx) in net profit as compared to previous year. The operating and fixed expenses has increased during the financial year resulting in lower profits and high operating cost.

INSTALLED CAPACITY

The Companys current installed capacity is 33000 MT per annum. During the year under review there was no increment in the installed production capacity of the company.

STATE OF THE COMPANY

The following statement on the affairs of the company under review:

1. The Company engaged in single segment i.e. company engaged in manufacturing of Paper.

2. There is no changes in status of the company.

3. There is no changes in financial year of the company.

4. There is a Capital expenditure in Plant and Machinery including co-generation system of Rs. 174.40 lakh to improve the quality and efficiency of paper which has taken effect on the financial position of the company.

5. There are no acquisition, merger, expansion, modernization and diversification during the year in the company under review.

6. With the outbreak of CoVID-19 epidemic, the country faces a nation lock down from 22th March 2020 (Janta Curfew). Due to which company suffered a loss in production proportionately for ten days (approx) which impacted the affairs of the company significantly during the year under review.

CASH AND EQUIVALENTS

Cash & Equivalents as on date 31st March, 2020 was Rs. (In lakhs) 26.23/-. The Company continue to focus on judicious management of its working capital, receivables, inventories and other working capital parameters are kept under strict check through continuous monitoring.

EARING PER SHARE (EPS)

The Earning per equity share of the company for the financial year ended on 31/03/2020 was Rs. 13.78/-per share and previous year was Rs. 46.95/-per share. The Company has reported a decline of 70.64 % in EPS for the FY 2019-2020.

CHANGES IN FUNCTIONAL STRUCTURE OF THE COMPANY

Earlier the Company worked as a single unit, but for availing the income tax benefit, the Company was divided into two units or undertaking, One was paper manufacturing and Second was power plant unit and both were working as independent units under the Name and Style of Sangal Papers Limited. The Board of Directors of the company apprised that to achieved maximum productivity with minimum wasted effort or expense and to operate businesses efficiently to maximize profits of the company in a well-organized and competent way. For these purpose and for availing Income Tax benefit under section 80- IA of the Income Tax Act, 1961. The power plant unit and paper unit is working as a separate unit since 1st April, 2018.

INSURANCE

The Companys properties including building, plant and machinery, stocks, stores, etc., have been adequately insured against major risks like fire, earthquake, terrorism, burglary etc.

DEPOSITS

The Company has not accepted any fixed deposits from public and as such, accordingly no amount, principal or interest amount was outstanding as on the date of the Balance Sheet.

CREDIT RATING

Your Company enjoys credit rating from Brickwork Ratings. The Brickwork Ratings India Pvt. Ltd. has downgrade the outlook from (stable to negative) whereas there is no change in the rating assigned on 21/05/2020 to the company as BWR BBB- (Pronounced as BWR Triple B Minus), Outlook: Negative (Reaffirmed) for Fund Based- Cash Credit and Term Loan (o/s). And BWR A3 (Pronounced as BWR, A Three) (Reaffirm) for Non Fund Based: Bank Guarantee and ILC/FLC as there is no change in the rating assigned as compared to previous year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given or granted any loans or guarantee covered under the provisions of section 186 of the Companies Act, 2013 and other details can find on the Notes to the financial statements of the Company.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:

In the term of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements), Regulation 2015, the Management Discussion and Analysis is set out in this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to Chairman of the Audit Committee and Managing Director.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 including any amendments if any, your Company at the Board Meeting held on 30th Day of May, 2019 approved and adopted a policy on Corporate Social Responsibility (CSR) and the Policy was hosted on the website of the Company. The net profit of your Company during the financial year 2018-19 was more than Rs. 5 crore. As per the provisions of the Companies Act 2013, the company has constituted CSR committee to frame the policy and overlook the expenditure and fund allocation for CSR activities. On the basis of recommendation of Corporate Social Responsibility Committee (CSR committee) and as part of CSR initiatives, the company has spent full CSR amount during the financial year 2019-2020 as per the schedule 7 of Companies Act 2013, in areas of promoting education, health care and environmental sustainability as per deem fit by the CSR committee. The board approves all recommendation as recommended by CSR Committee during the year. The report on CSR activities is attached as Annexure-I to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed pursuant to Section 134(3)(m) of The Companies Act, 2013, read with Rule 8 of the Companies(Accounts) Rules, 2014 are given to the extent applicable herein below:

CONSERVATION OF ENERGY

The Paper manufacturing Industries are one of the growing industries in India. The basic need of paper industries is raw material i.e. waste paper and energy to produce the final product. Our company is seeking to optimize use of energy and installing new equipment for reduce the consumption of energy and pollution at all its manufacturing facilities and registered office at Vill. Bhainsa 22km, Meerut-Mawana road, Meerut, UP. The company is ensuring :

A) ELECTRICAL ENERGY:

(a) A provision of Energy Efficient Pumps for ETP/STP, Water Supply and Fire Systems.

(b) Use of Energy Efficient LED Lighting for manufacturing and office.

(c) Optimization of processes and operational control.

(d) The manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

(e) Specific investment has been made to reduce energy consumption by installing VFDs and other electrical equipments.

(f) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

B) WATER:

(a) Rain water harvesting with Ground Recharge.

(b) Replacement of underground hydrant and water pipeline with above ground level pipeline to arrest water leakages.

(c) Zero discharge of waste water.

TECHNOLOGY ABSORPTION

Companys products are manufactured by using In-house know how and no outside technology is being used for manufacturing activities. The Company is adopting green initiative for reduce the pollution and being more eco

friendly. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire in-house Research & Development activities are directed to achieve the aforesaid goal.

IMPORTS/ EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. IMPORTS

Imported raw materials during the year, detailed as per mentioned in notes of financials statements of the company.

B. EXPORTS

The Company exports the paper to Gulf, European, Asian and other Countries all over the world, during the year export decreased to Rs. (in lakhs) 1401.96 from Rs. (in lakhs) 2078.72 in the previous year. The Company has reported a decline of 32.56% in export for the said financial year.

Details are provided under the Point 21.A.(ii) of "Notes to Financial Statements" for the financial year ended as on 31st March 2020.

DEVELOPMENTS IN INDUSTRIAL RELATIONS/ HUMAN RESOURCES INCLUDING NUMBER OF EMPLOYEE EMPLOYED

Employee wealth is main key of success of an organisation, it is our obligation provide more facilities to the employee. The company is a paper manufacturing industry, we are committed to maintaining a culture and custom for our employee to attract and retain the best talent. During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

CORPORATE GOVERNANCE REPORT

The Corporate Governance Report, which form an integral part of this Directors report, is set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated under various regulations of the SEBI (Listing obligations and disclosure requirements) Regulations, 2015.

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

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. An Internal Complaints Committee ("ICC") has been set up from the senior management which is responsible for redressed of complaints related to sexual harassment and follows the guidelines provided in the Policy. During the year ended March 31, 2020 no complaints pertaining to sexual harassment have been received.

DIRECTORS RETIREMENT AND RE-APPOINTMENT

Pursuant to the provisions of section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vinayak Sangal (DIN NO. 06833351) Director (Non-Executive) retires by rotation and being eligible, offers himself for re- appointment. The Board of Directors recommends the re-appointment of Mr. Vinayak Sangal (DIN: 06833351) as director of the Company.

Pursuant to the provisions of section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Tanmay Sangal (DIN: 01297057) Director (Non-Executive) retires by rotation and being eligible, offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Tanmay Sangal (DIN: 01297057) as director of the Company

DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP")

The Board of Director of the Company having such executive and non-executive directors.

Key Managerial Personnel

Mr. Himanshu Sangal (Managing Director), Mr. Amit Sangal (Whole Time Director cum CFO), Mr. Arpit Jain

(Company Secretary) of the Company w.e.f. 23rd August 2019, whereas Mr. Shivam Sharma resigned from the post of Company Secretary from the date of new appointment of the Company Secretary of the company.

Directors

Mr. Tanmay Sangal (President Marketing cum Director), Mr. Vinayak Sangal (President Operation cum Director), Mr. Prem Sethi (Independent Director) and Mrs. Geeta Gupta (Independent Women Director) of the Company.

Pursuant to the Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The Board of Directors of the Company appointed Mr. Prem Sethi (Non-executive Director) as chairperson of the Board of Directors of the company in the Board Meeting held on 30/05/2019.

BOARD EVALUATION

Pursuant to Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, mandate that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of the Board of Directors on various parameters, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the Working of its Audit Committee, Nomination and Remuneration Committees and Stakeholder Relationship Committee. The Board specified the manner in which the evaluation has been carried out and explained in the Corporate Governance Report.

DIRECTOR APPOINTMENT AND REMUNERATION POLICY

The policy on directors appointment and remuneration, including criteria for determining qualification, positive attribute and independence of a director and other relevant matter, as required as per section 178(3) of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Remuneration policy has posted on website of the Company at www.sangalpapers.com, you may find. The Directors appointment and Remuneration Policy also stated in Corporate Governance Report.

DECLARATION BY THE INDEPENDENT DIRECTORS

The Company received necessary declaration from each independent director under section 149(7) of Companies Act, 2013, that Mr. Prem Sethi (Independent Director) and Mrs. Geeta Gupta (Independent women Director) meets the criteria of independency laid down in section 149(6) of Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

Pursuant to the Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and based on the confirmation/affirmation received from Mr. Prem Sethi (Independent Director) and Mrs. Geeta Gupta (Independent women Director), that they were not aware of any circumstances that are contrary to the declarations submitted by Independent Directors, the Board acknowledges the veracity of such confirmation and takes on record the same.

FAMILIARIZATION PROGRAM AND INDEPENDENT DIRECTORS MEETING

During the relevant financial year and as per company policy the meeting of the independent Directors of the Company was scheduled to be held on 30th March 2020, for the purpose of evaluation of the Board of Directors as whole and individually with other programs, but due to CoVID-19 outbreak and nation lock down as declared by government read with MCA Circular No. 11/2020. The meeting of the independent director stood cancelled.

BOARD DIVERSITY

We understand the value and importance of balanced and diverse board in the company. We always support a better/best board in the company. The Company believes that a truly diverse board will changes in thoughts, perspective, knowledge, skills, industry experience, cultural and geographical background, age, gender that will help us retain our competitive advantage.

MEETINGS OF BOARD OF DIRECTORS AND COMMITTEE

During the financial year 2019-2020, Six (6) Board of Directors Meetings, Four (4) Audit Committee Meetings, One (1) Nomination and Remuneration Committee Meetings, One (1) Stake holder Relationship Committee meetings,

Two (2) Corporate Social Responsibility were convened and held. The details of which given in the Corporate Governance Report. The maximum interval between any two meeting of the Board of Directors and the Audit Committee, did not exceed 120 days, as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDIT COMMITTEE RECOMMENDATIONS

During the year, all the recommendations of Audit Committee were reviews and approved by the Board of Directors, if any.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMAPNY

There has been a loss of production due to outbreak of CoVID-19 and (Janta Curfew) nation lock down as declared by the government from 22nd March. However with the exceptions granted by local authorities and state/central government. The Company has restarted its production from 1st day of May 2020 with relevant grants and permission as required. On account of such lock down, the company suffered an opportunity loss of production of goods and revenue proportionately for ten days due to this lockdown.

CHANGE IN THE NATURE OF BUSINESS

The Company engaged in single segment i.e. manufacturing of paper, The Company has not undergone any changes in the nature of the business during the financial year.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and The Companys operation in future.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013, Your directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;

(b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair review of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company and that such internal financial control are adequate and are operating effectively;

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

RELATED PARTY TRANSACTIONS

Sangal Papers Limited has formulated a policy on Related Party Transaction. The same is available on the company website (www.sangalpapers.com). All the Related Party Transactions are placed before the audit committee for its review on quarterly basis. The related party transactions have already been disclosed in the financial statements. No transaction of material nature has been entered into by the Company during the year which may have potential conflict with the interest of the Company. All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large.

All transactions with related party falls under the scope of Related Party Transactions are complied with the provisions of section 188(1) of the Companies Act, 2013, Information on transactions with related parties pursuant to section 134(3)(h)of the Act read with rule 8(2) of the Companies (Accounts)Rules, 2014 are given in Annexure II in Form AOC-2 and forms part of this report.

SUBSIDIARY COMPANIES, JOINT VENTURE AND ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture and associate company during the relevant financial year 2019-2020.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct and which is applicable to the members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "Code of Business Conduct" which forms and Appendix to the Code and same is available on the company website (www.sangalpapers.com).

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

All the Board members and the Senior Management personnel have confirmed compliances with the code. All management Staff was given appropriate training in this regard.

MECHANISM/WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Company has formulated a Whistle Blower Policy to establish a vigil mechanism for directors and employees of the Company. The purpose and objective of this Policy is to provide a framework to promote responsible and secure whistle blowing. It protects the employees wishing to raise a concern about serious irregularities within the Company. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company (www.sangalpapers.com).

STATUTORY AUDITORS

Pursuant to the provisions of section 139 of the Companies Act, 2013, the rules made thereunder M/s Raj Sandhya & Co., Chartered Accountants (Registration No.:002011C), Muzaffarnagar have been appointed as Statutory Auditors of the Company at the 37th annual general meeting held on 29th September, 2017 for a period Five (5) years till the conclusion of 42nd Annual General Meeting to be held in the year 2022. The Auditors have confirmed that, they are not disqualified in terms of Section 141 of the Act. As required under provisions of Section 139 Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

COST AUDIT

Pursuant to the provision of the section 148 (3) of Companies Act, 2013 read with rule 6 (2) of Companies (Cost Records and Audit) Amendment Rule, 2014 (include any modification or re-enactment thereof, if any) and other applicable law, rules or regulations, if any. Pursuant to Section 148 of the Companies Act, 2013 read with the Rule 6 (2) Companies (Cost Records and Audit) Amendment Rules, 2014 (include any modification or re-enactment if any), the Company has appointed Mr. S. R. Kapur, Cost Accountant (Membership No.:- M-4926), Add.: 278, PakkaBagh, Holi Chock, Khatauli, Muzaffarnagar, UP-251201, as Cost Auditors of the Company for the financial year ended 2021 at such remuneration and other term and condition as may be agree by the Board of Directors of the Company.

SECRETARIAL AUDIT

Pursuant to provision of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, The Board of Directors appointed Mr. DK Gupta proprietor of M/s D. K Gupta & Co., Practicing Company Secretary (Membership Number: 5226, Certificate of Practice Number: 3599), to undertake the Secretarial Audit of the Company for the financial year 2019-2020. The Secretarial Audit Report is annexed herewith as part of Boards report.

AUDITORS REPORT/ SECRETARIAL AUDIT REPORT:

The observation made in the Auditors Report read together with relevant notes thereon have been explained in Notes on Account and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Observations, if any made there are self explanatory and read with Notes on Account of financial Statement.

PREVENTION OF INSIDER TRADING:

In January 2015, SEBI notified the SEBI (Prohibition of Insider Trading) Regulations, 2015, SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 and SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2019. Pursuant thereto, the Company has formulated and adopted a new Code of practice for fair disclosure of unpublished price sensitive information and Code of Conduct. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code during the FY 201920.

ANNUAL RETURN

Pursuant to the Section 134 (3) of the Companies Act, 2013, Annual Return with necessary annexure of the company for the year 2019-2020, also available on companys website www.sangalpapers.com.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as provided under section 92(3) of the Companies Act,

2013 in prescribed form MGT - 9 is annexed herewith, also available on companys website www.sangalpapers.com/financials.

PARTICULARS OF EMPLOYEES

The provisions of Rule 5 (2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules,

2014 (include any modification or amendment thereof, if any) requiring particulars of the employees in receipt of remuneration in excess of Rupees One Crore and Two Lakh per year and Rupees Eight lakh Fifty Thousand per month only to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rupees One Crore and Two Lakh per year and Rupees Eight lakh Fifty Thousand per month during the financial year 2019-2020.

The information required under section 197 (12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as "Annexure -III ".

ACKNOWLEDGEMENTS:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company , Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous co-operation and assistance.

For and on behalf of the Board of Directors,

ANNEXURE “I” TO BOARDS REPORT

Annual Report on Corporate Social Responsibility (CSR) Activities

a. A brief outline of the Companys CSR Policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs;

To actively contribute to the social and economic development of the communities and build a better sustainable way of life for weaker sections of society. The areas which are identified include Education, Health Care, Medical Care, Infrastructure Development and Social Change. The Companys CSR policy is available on the Companys website on the following URL http://www.sangalpapers.com.

b. The composition of CSR Committee;

Mr. Geeta Gupta, (Independent Director) Chairperson;

Mr. Himanshu Sangal, (Managing Director) Member;

Mr. Amit Sangal, (Whole Time Director/CFO) Member;

c. Average Net Profits of the Company for last three financial years (1st April 2017 - 31st March 2020) = *Rs. 428.75 lakh

FY 2017-18 = Rs 363.26 lakh FY 2018-19 = Rs 732.60 lakh FY 2019-20 = Rs 190.39 lakh

• Average taken of last three Financial Year as mentioned above.

d. Prescribed CSR Expenditure (two percent of the amount as in Item c above) for the FY 2020 - 21 =

Rs 8.58 lakh

e. Details of CSR Spent during the financial year (2019-20);

Total Amount to be spent for the financial year during FY 2019 - 20 : Rs 9.05 lakh Amount unspent, if any : NIL

Manner in which the amount spent during the financial year :

S. No. CSR Project/Activity as per Schedule 7 Location/Area Amount outlay (Rs.) Cumulative Expenditure (Rs.) Amount Spent : Direct / Through agency
1 Protection of Flaura and Fauna Hastinapur 200000 200000 Direct
2 Education Delhi / NCR 15000 215000 Direct
3 Hunger and Poverty Lucknow 100000 315000 Direct
4 Health care Modinagar 100000 415000 Direct
5 Health care (CoVID-19) PM Care Fund 500000 915000 Direct

f. Reasons for not spending the amount - NA

The CSR Committee confirms that the implementation and monitoring of the CSR policy is in compliance with the CSR objectives and Policy of the Company.

Sd/- Sd/-
Place: Mawana Geeta Gupta Himanshu Sangal
Date: 03/09/2020 Chairperson-CSR Committee Managing Director