Sanginita Chemicals Ltd Directors Report

The Gross revenue from operations of the Company for the year 2024-25 has increased from Rs. 15150.30 Lakhs to Rs. 22967.50 Lakhs. Moreover, profit before Depreciation and Tax stands increased from Rs. 178.83 Lakhs to Rs. 250.63 Lakhs.

SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:

The Company does not have any Subsidiary Companies or Joint Venture Company or Associate Company.

MATERIAL CHANGES AND COMMITMENT:

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of the report.

REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:

During the year, the financial statement or report was not revised. Hence further details are not applicable.

DIVIDEND:

In order to conserve resources, your Directors express their inability to declare any dividend.

TRANSFER TO RESERVE:

Your Directors find it prudent not to transfer any amount to General Reserve.

RIGHTS ISSUE OF EQUITY SHARES:

The Board of Directors at their meeting held on 14^th July, 2023 approved to offer and issue equity shares by way of Rights Issue and obtained In-Principle approval dated 18^th September, 2023 from NSE. Subsequently, the Board at its meeting held on 1^st May, 2024 have approved the terms of Rights Issue and also approved the Final Letter of Offer for Rights Issue of 8633850 equity shares of Rs. 10/- each at the price of Rs. 18/- each aggregating to Rs. 15.54 Crores in ratio of 1 Right equity share for every 2 equity shares held by the existing equity shareholders as on the Record date i.e. 7^th May, 2024. The Rights Issue remained open for subscription from 15^th May, 2024 to 27^th May, 2024. The Company have received approval of NSE vide letter dated 31^st May, 2024 for the basis of allotment for allotment of Rights Equity Shares. Subsequent to that the Board has allotted 8633850 equity shares to the eligible shareholders on 1^st June, 2024. The Company has also received Trading Approval from NSE vide their letter dated 7^th June, 2024.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 Mrs. Hansaben D. Chavada (DIN: 00479509), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself to be reappointed as Director of the Company. The Board recommends the re-appointment of Mrs. Hansaben D. Chavada as Director of the Company liable to retire by rotation.

There was no change in Director or Key Managerial Personnel during the year.

UTILISATION OF ISSUE PROCEEDS:

The Company has received proceeds of Rs. 15.54 Crores upon successful completion of Rights issue. The Company has fully utilized the proceeds of the Rights issue towards Working Capital, Capital Expenditure and General Corporate Purposes in line with the objects of the Rights Issue.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed: 1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; 2. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; 3. that the Directors had 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; 4. that the Directors had prepared the annual accounts on a going concern basis; and 5. that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

6. that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS:

The Company has complied with applicable Secretarial Standards during the year under review.

FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of Audit and Nomination & Remuneration Committees based on the criteria and framework adopted by the Board.

NUMBER OF MEETINGS OF BOARD:

The Board of Directors duly met 5 (Five) times on 1^st May, 2024, 30^th May, 2024, 12^th July, 2024, 11^th October, 2024 and 11^th January, 2025.

INDEPENDENT DIRECTORS:

The Company has received necessary Declaration from each Independent Director/s under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The Board of Directors is of the opinion that the Independent Directors fulfils the criteria of independence and are independent from the management of the Company.

Regarding proficiency, the Company has adopted requisite steps towards the inclusion of the names of all Independent Directors in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (‘IICA). Accordingly, all the Independent Directors of the Company have registered themselves with IICA for the said purpose. In terms of Section 150 of the Act read with the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended vide Notification No. GSR.774(E), dated 18.12.2020, since majority of the Independent Directors of the Company have served as Directors for a period of not less than three (3) years on the Board of Listed Company as on the date of inclusion of their names in the database. Mr. Pramodsinh Dabhi, Independent Director has informed the Company that he has duly passed the online assessment test.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEE STOCK OPTION SCHEME:

During the year, the Company has not issued any equity shares with differential voting rights or sweat equity shares or shares under employee stock option scheme. Hence disclosure regarding the same is not given.

AUDITORS:

M/s. B. K. Chavda & Co., Chartered Accountants, the existing auditors of the Company were appointed as Auditors of the Company at the 19^th AGM for holding the office from the conclusion of that 19^th AGM till the conclusion of 24^th AGM. At the same AGM, any one of the Directors of the Company was authorized to fix the remuneration of the Statutory Auditors.

In view of the Companies (Amendment) Act, 2017, the first proviso in sub-section (1) in section 139 of the Companies Act, 2013 being omitted, the said appointment of auditor is no longer required to be ratified by the members at every annual general meeting.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The observations, comments and notes of the Auditor are self-explanatory and do not call for any further explanation /clarification.

COST AUDITORS AND COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors on recommendation of Audit Committee have appointed M/s. A G Tulsian & Co., Cost Accountants, as Cost Auditors of the Company for the financial year 2024-25. M/s A. G. Tulsian & Co. have confirmed that their appointment is within the limits of the Section 139 of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 of the Companies Act, 2013.

The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arms length relationship with the Company. The Cost Audit Report for the financial year 2023-24 was filed with the Ministry of Corporate Affairs on 30^th September, 2024.

As required under the Companies Act, 2013 the remuneration payable to the Cost Auditor is required to be placed before the Members in the General Meeting for their ratification. Accordingly necessary resolution seeking Members approval for ratification of remuneration payable to the Cost Auditor was approved by the members of the Company.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Company has appointed M/s. Manoj Hurkat & Associates, firm of Company Secretaries in Practice to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure- 1". Pursuant to recent SEBI-LODR Amendments, the Company is required to appoint Secretarial Auditors for a term of five consecutive financial years. In view this, the Directors recommends the resolution at Item No. 3 be passed as an Ordinary Resolution for appointment of M/s. Manoj Hurkat & Associates, firm of Company Secretaries in Practice to undertake Secretarial Audit of the Company for a term of five consecutive financial years i.e. 2025-26 to 2029-30.

AUDIT COMMITTEE:

NOMINATION & REMUNERATION COMMITTEE:

STAKEHOLDERS RELATIONSHIP COMMITTEE:

RISK MANAGEMENT POLICY/PLAN:

It may please be noted that as per the applicable requirement of Companies Act, 2013 a risk management policy/plan of the Company is developed and implemented for creating and protecting the Shareholders value by minimizing threats or losses and to identify and provide a framework that enables future activities of a Company to take place in a consistent and controlled manner.

VIGIL MECHANISM:

The Company has a vigil mechanism for its directors and employees, to deal with instance of fraud/ mismanagement, if any and to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The details of the policy are posted on the website of the Company.

CODE OF BUSINESS CONDUCT AND ETHICS:

The Company has laid down a Code of Conduct (COC) which is applicable to all the Board members and Senior Management of the Company. The COC is available on the website of the Company https://www.sanginitachemicals.co.in/Investor-Relation/d-01.pdf. All the members of the Board and Senior Management have affirmed compliance with the Code.

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

The Company has in place an Anti-Sexual Harassment measures in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, there were no complaints received under the said act. Moreover, there was no complaint pending at the end of the financial year. The Company has complied with all the applicable provisions of the said Act including the constitution of internal complaints committee.

REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Companys shareholders may refer the Companys website i.e. https://www.sanginitachemicals.co.in/Investor-Relation/ Other-Policies/Other-Policies-02.pdf for the detailed Nomination & Remuneration Policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a Director; and other matters provided under sub-section (3) of Section 178.

The Companys remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.

ANALYSIS OF REMUNERATION:

The details of remuneration paid to Directors and Key Managerial Personnel is given in extract of Annual Return placed on the website of the Company i.e. www.sanginitachemicals.co.in.

It is hereby affirmed that the remuneration is as per remuneration policy of the Company.

PARTICULARS OF EMPLOYEES:

The statement showing the names of the top ten employees in terms of remuneration drawn is given as "Annexure – 2."

There are no employees of the Company drawing remuneration requiring disclosure of information under Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

DETAILS OF THE REMUNERATION TO MD/WTD (AS PER CLAUSE-IV OF SECTION-II OF PART-II OF SCHEDULE V):

(i) All elements of the remuneration package such as salary, benefits, bonuses, stock options and pension: The details are given in Annual Return placed on the website of the Company.

(ii) Details of fixed component and performance-linked incentives, along with the performance criteria:

The details are given in Annual Return placed on the website of the Company and performance criteria is linked with net profit of the Company.

(iii) Service contracts, notice period and severance fees:

The term of Managing Director and Whole Time Director is valid till 22^nd November, 2027. Notice period is 6 months on either side or the Company paying 6 months remuneration in lieu of such notice and no severance fees.

(iv) Stock option details, if any, and whether these have been issued at a discount, as well as the period over which they accrued and how they are exercisable: The Company has not granted any stock option.

REGULATORY ORDERS:

During the year, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

CSR COMMITTEE:

As the requirement of CSR Committee is not applicable to the Company, no further details/disclosure required to be given in this regard.

INTERNAL FINANCIAL CONTROL:

The Directors has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively.

DEPOSITS:

During the year under report, your Company has not accepted any deposits pursuant to Section 73 of the Companies Act, 2013. Hence further details are not given.

Details of money accepted (if any during the year) by the Company from the Directors and/or the relatives of Directors of the Company are given in the notes to the Financial Statements and the same are not deposit as per the applicable provisions of Companies Act, 2013 and rules made thereunder.

CORPORATE GOVERNANCE:

The Corporate Governance Report forms an integral part of this Report and annexed hereto as "Annexure 3", together with the Certificate from the Practicing Company Secretary regarding compliance with the requirements of Corporate Governance as stipulated in Part C of Schedule V to the SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015.

EXTRACT OF ANNUAL RETURN:

In Compliance to the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual Return of the Company for the financial year ended 31^st March, 2025 has been available on the Companys website at www.sanginitachemicals.co.in.

PARTICULARS OF LOANS, INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

There are no Loans, Investments or Guarantees /Security given by the Company during the year under Section 186 of the Companies Act, 2013; hence no particulars are required to be given.

MANAGEMENT DISCUSSION AND ANALYSIS:

Necessary Management Discussion and Analysis Report, pursuant to Regulation 34(2)(e) of The SEBI (LODR) Regulations, 2015 is appended as "Annexure - 4" to Directors Report.

RELATED PARTY TRANSACTION:

There are no particulars of contacts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 which are required to be reported in the prescribed form AOC-2. The details of related party transactions as per IND AS-24 are otherwise reported in the financial statements. The related party transactions are otherwise carried out in the ordinary course of business and on arms length basis and the same are in the best interest of the Company. The related party transactions are due to business exigencies.

APPRECIATION:

Your Directors wish to place on record their sincere appreciation for significant contribution made by the employees at all the levels through their dedication, hard work and commitment, thereby enabling the Company to boost its performance during the year under report.