Sarthak Industries Ltd Directors Report.

Dear Shareholders,

Your Directors have pleasure in presenting 38th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31March, 2022.

FINANCIAL SUMMARY

The performance of the Company for the financial year ended on 31st March, 2022 is summarized below:

[ Rs. In Lacs

(Except EPS)]

Particulars 2021-22 2020-21
Revenue from operations 16364.52 13354.29
Other Income 247.62 176.86
Profit/ (Loss) before Depreciation, Finance Cost, Exceptional items & Tax Expenses 431.46 452.30
Less: Depreciation 80.19 66.36
Profit/ (Loss) before Finance Cost, Exceptional Items and Tax Expenses 351.27 385.94
Less: Finance Cost 122.84 91.92
Profit/ (Loss) before Exceptional Items and Tax Expenses 228.43 294.02
Add/ (Less): Exceptional items

-

-

Profit/ (Loss) before Tax Expenses 228.43 294.02
Less: Tax Expenses 60.51 84.78
Profit/ (Loss) after Taxation 167.92 209.24
Add/(Less): Other Comprehensive Income 20.97 96.25
Total Comprehensive Income 188.89 305.49
Balance brought forward from previous year 3063.70 2758.21
Amount available for appropriation 3252.59 3063.70
APPROPRIATION
Amount Carried to Balance sheet 3252.59 3063.70
Paid Up Equity Share Capital 696.89 696.89
Earnings Per share [EPS] (Rs.10/- each) Basic & Diluted (in Rs.) 2.41 3.00

INDIAN ACCOUNTING STANDARDS (Ind AS)

As mandated by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (“Ind AS”) from 1st April, 2017. The financial statements of the Company for the financial year 2021-22 have been prepared in accordance with Ind AS, prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and the other recognized accounting practices and policies to the extent applicable.

DIVIDEND

Your Directors have decided to plough back the profits to the operational fund requirement of the Company. Hence, no dividend has been recommended for the year under review.

AMOUNT TRANSFERRED TO RESERVE

The Board of Directors has not proposed any amount for transfer to reserves for the year ended 31st March 2022.

CHANGE IN NATURE OF BUSINESS

During the year there was no change in the nature of business of the company.

OPERATIONS

During the year under review, Revenue from operations and Other Income of the Company stood at Rs. 16,612.14 Lacs showing increasing trend over the previous year Revenue from operations and Other Income Rs. 13,531.15 Lacs. Profit before tax has decreased and stood at Rs. 228.43 Lacs as compared to previous year figures Rs. 294.02 Lacs and Net Profit also decreased and stood at Rs. 167.92 Lacs as compared to previous year net profit Rs. 209.24 Lacs. Your Directors are hopeful for better performance in the coming years.

COVID-19 PANDEMIC

In view of the Covid-19 pandemic, there have been several restrictions imposed by governments across the globe on the travel, goods movement and transportation considering public health and safety measures.

The Company is primarily engaged in business of manufacturing of LPG cylinders and trading of Agri and Non Agri Commodities. This COVID-19 pandemic has impacted the operations of the company during the year ended on 31st March, 2022. Based on the facts and circumstances existing as of that date, the company does not anticipate any material uncertainties associated with its nature and duration. The management will continue to closely monitor the evolving situation and assess its impact on the business of the Company.

DEPOSITS

The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

The Company has not received any unsecured loan from director during the financial year.

SHARE CAPITAL

During the year under review, the Company has not raised any paid up share capital. The Paid up Equity Share Capital as at 31st March 2022 stood at Rs. 6,96,88,500/-. The Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares. As on 31st March 2022, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

There were no funds which were required to be transferred to Investor Education and Protection Fund.

INSURANCE

All properties and insurable interests of the Company including Building and Plant & Machinery have been adequately insured.

HUMAN RESOURCE & INDUSTRIAL RELATIONS

Industrial relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the cooperation extended by all the employees in maintaining cordial relations.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

A separate report on Corporate Governance in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms integral part of this report. Certificate regarding compliance of conditions of Corporate Governance Report issued by Practicing Company Secretary is attached separately to this report.

Management Discussion and Analysis Report as required under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached separately to this Annual Report.

DIRECTORS RESPONSIBILITIES STATEMENT

To the best of their knowledge and belief, your Directors make the following statements in terms of Section 134(3) (C) read with Section 134(5) of the Companies Act, 2013:

I) That in the preparation of the annual accounts for financial year ended 31st March, 2022; the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) That the Directors 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 view of the state of affairs of the Company at the end of financial year and of the profit/ loss of the Company for that period;

iii) That 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;

iv) That the Directors have prepared the annual accounts on a going concern basis;

v) That the Directors have laid down internal financial controls, which are adequate and are operating effectively;

vi) That 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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/ Reappointment:

Ms. Deepika Arora (DIN: 07117491), Director of the Company retires by rotation in accordance with the provisions of the Articles of Association of the Company and being eligible offer herself for re-appointment.

Mr. Nimishek Ved (DIN: 07362817) was appointed as an Independent Director of the Company for the first term of five years effective from 30th June, 2018. His office of directorship is due for retirement on 29th June, 2023. The Board, based on the performance evaluation of his first term of five years and considering the knowledge, acumen, expertise and as per the recommendation of the Nomination and Remuneration Committee, recommends the re-appointment of Mr. Nimishek Ved for second term of 5 (five) consecutive years commencing from 30th June, 2023 to 29th June, 2028 for approval by the Shareholders.

The Board re-appointed Mr. Yogender Mohan Sharma as Whole-time Director for a period of 3 years w.e.f. 16.07.2022 subject to approval of member in general meeting. The Board proposes to re-appoint him in this annual general meeting.

Details of the proposal for appointment/ re-appointment of Directors are mentioned in the Notice of the Annual General Meeting.

Ms. Riya Bhandari has been appointed as whole-time Company Secretary of the Company w.e.f. 01.04.2021.

Declaration by directors:

During the year, declarations received from the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. Board appraised the same and found that none of the director is disqualified holding office as director.

Declaration by Independent Directors:

All Independent Directors have given declarations under section 149(7) that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of SeBi (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In compliance with Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have registered themselves with the India Institute of Corporate Affairs (IICA), Manesar and have included their names in the databank of Independent Directors within the statutory timeline. They have also confirmed that they will appear for the online proficiency test, wherever applicable.

LISTING OF SHARES

The equity shares of the Company are listed on the BSE Limited (BSE). The listing fee for the year 2021-22 has already been paid to the Stock Exchange.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

As on 31.03.2022, the Company does not have any subsidiary company or joint venture or associate company.

NUMBER OF MEETINGS OF THE BOARD

The Board met 8 times during the financial year. The details of which are given in the Corporate Governance Report that forms part of this annual report. The intervening gap between any two Meetings was within the period prescribed under the Companies Act, 2013.

MEETING OF INDEPENDENT DIRECTORS

During the year under review, one meeting of the Independent Directors was held on 14.02.2022, without the attendance of Executive Directors and members of management. All the Independent Directors were present in that meeting.

CODE OF CONDUCT

The Company has laid down a code of conduct for all Board members and Senior Management and Independent Directors of the Company. All the Board members including Independent Directors and Senior Management Personnel have affirmed compliance with the code of conduct. Declaration on adherence to the code of conduct is forming part of the Corporate Governance Report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

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 its Committees. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

FAMILIARIZATION PROGRAMME

Details of the programmes for familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. are available on the website of the Company at the link: http://www.sarthakindustries.com/images/Familiarisation%20Programme-SIL.pdf

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements and during the year, no reportable material weaknesses in the design or operation were observed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not given any loans or guarantees or made investment beyond the limits mentioned under the provisions of Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

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. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Thus Form AOC - 2 is not required.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at the link: http://www.sarthakindustries.com/images/Related_Party_Policy.pdf

A statement showing the disclosure of transactions with related parties as required under Ind AS 24 is set out separately in this Annual Report.

MATERIAL CHANGES AND COMMITMENT BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are given in the “Annexure A” forming part of this report.

PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, are given in the “Annexure B” forming part of this report.

During the year under review, none of the employee of the company is drawing more than Rs.1,02,00,000/- per annum or Rs. 8,50,000/- per month for the part of the year. The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. In terms of the first provision to Section 136 of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Further, none of directors is drawing any remuneration or commission from any subsidiary or associate companies.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy on Directors Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013, and under Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 adopted by the Board, is appended as “Annexure C” forming part of this report.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism which also incorporates a Whistle Blower Policy in line with the provisions of the Companies Act, 2013 and the Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to report genuine concerns or grievances. The Vigil Mechanism/ Whistle Blower Policy may be accessed on the Companys website i.e. www.sarthakindustries.com.

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 17(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of the Company has formed a Risk Management Committee to frame, implement and monitor the Risk Management Plan for the Company. The details of risk have been covered in the Management Discussion and Analysis Report forming part of the Boards report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable to the Company.

AUDITORS & AUDITORS REPORT

M/s SMAK & Co., Chartered Accountants, (Firm Registration No. 020120C) [Formerly known M/s Atishay & Associates] were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 26th September, 2017, for first term of five consecutive years from the conclusion of 33rd Annual General Meeting till the conclusion of 38th Annual General Meeting of the Company to be held in the year 2022. The term of office of M/s SMAK & Co., Chartered Accountants as auditors of the Company will conclude from the close of the forthcoming AGM of the Company.

The said Auditors were eligible for re-appointment for a second term and they have expressed their willingness for re-appointment for the second term of 1 (one) year.

Therefore, Pursuant to provisions of Section 139 of the Companies Act, 2013, the Board of Directors of the Company, on the recommendation of the Audit Committee, have recommended the re-appointment of M/s SMAK & Co., Chartered Accountants, (Firm Registration No. 020120C), as the Statutory Auditors of the Company to the Members at the 38th Annual General Meeting of the Company for the second term of 1 (one) years. Accordingly, a resolution, proposing re-appointment of M/s SMAK & Co., Chartered Accountants, (Firm Registration No. 020120C), as the Statutory Auditors of the Company for a term of 1 (one) year i.e. from the conclusion of 38th Annual General Meeting till the conclusion of 39th Annual General Meeting of the Company pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice calling 38th Annual General Meeting of the Company. In this regard, the Company has received a certificate to the effect that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder. They have also confirmed that they hold a valid certificate as required under the provisions of Regulation 33 of the Listing Regulations.

The notes referred to by the Auditors in their Report are self explanatory and hence do not require any explanation.

Further, there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-section (12) of Section 143 of Companies Act, 2013.

COST AUDIT

The Board has appointed M/s A. Goyal & Co., Cost Accountants, (Firm Registration No. 101308) as Cost Auditors of the Company for conducting the audit of cost records maintained by the Company for the financial year 2022-23. The Cost Audit Report for the year 202021 was filed with the Central Government with additional fee.

INTERNAL AUDITORS

Internal Audit for the year ended March 31,2022 was done by M/s S K Malani & Co (Firm Registration Number: 159090W). The Board takes his suggestions and recommendations to improve and strengthen the internal control systems. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.

The Board has appointed M/s S K Malani & Co. (Firm Registration Number: 159090W), as Internal Auditor of the company for the year ended March 31,2023.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s Ajit Jain & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2021-22. The Secretarial Audit Report for the financial year 2021-22 is annexed herewith as “Annexure D” forming part of this report.

There are no adverse comments, qualifications or reservations or adverse remarks in the Secretarial Audit Report.

PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the code as per SEBI (Prohibition of Insider Trading) Regulations, 2015; The Details of the said code is available on website of the Company at the weblink:

http://www.sarthakindustries.com/Code%20of%20Practices%20and%20Procedures%20for%20fair%20disclosure-SIL.pdf BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is not applicable to your Company for the financial year ending March 31,2022.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulator or courts or tribunals impacting the going concern status of the Company and future operations.

APPLICATION OR PROCEEDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

There is no application made or no proceeding pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of onetime settlement with any Bank or Financial Institution.

SECRETARIAL STANDARDS

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India. IMPLEMENTATION OF CORPORATE ACTION

During the year under review, the Company has not failed to implement any Corporate Actions within the specified time limit.

CREDIT RATING

Credit rating obtained along with revisions thereto for bank facilities of the Company during FY 2021-22 as under:

S. No. Rating Agency Facilities Credit Rating
1. India Ratings and Research Private Limited Non- Fund- Based limit IND A4+

The Credit Rating has been upgraded during the financial year 2021-22 as under:

S. No. Facilities As on 01.04.21 by CARE Rating Limited As on 31.03.22 by India Rating & Research Private Limited
1. Non -Fund -Based -Limit CARE A4 (A Four) IND A4+

ANNUALRETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, the annual return is available at Companys website http://www.sarthakindustries.com/Annual_return.html.

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

The Company has in place an anti harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under the policy. An Internal Complaints Committee (ICC) has also been set up to redress complaints received on sexual harassment.There was no complaint received from any employee during the financial year 2021-22 and hence no complaint is outstanding as on 31.03.2022 for redressal.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the employees of the Company for their enormous personal efforts as well as their collective contribution during the year. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions and all other business associates for their continuous support given by them to the Company and their confidence in the management.

For and on behalf of the Board of Directors

YOGENDER MOHAN SHARMA DEEPIKA ARORA
Whole-time Director Director
DIN:03644480 DIN:07117491
Place: Indore
Dated: 10th August, 2022

Information as per section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 for the year ended 31th March, 2022 are as under.

(A) Conservation of energy-

(i) The steps taken or impact on conservation of energy:

Various operational measures were taken to reduce energy consumption such as operation control on timing of lighting and other equipment, especially in off-season and timely preventive maintenance of equipment to enhance their efficiency.

(ii) The steps taken by the Company for utilizing alternate sources of energy:

No steps taken during the year 2021-22.

(iii) The capital investment on energy conservation equipments:

No Capital investment on energy conservation equipments during the year 2021-22.

(B) Technology absorption-

(i) The efforts made towards technology absorption:

A continuous interaction and exchange of information in the industry is being maintained with a view to absorbing, adapting and innovating new methods that may be possible.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:

The main benefits derived are Quality improvement and Cost reduction.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

The Companys operations do not require import of technology

(iv) The expenditure incurred on Research and Development:

No expenses have been incurred on Research and Development during the year 2021-22.

(C) Foreign exchange earnings and Outgo

During the year under review, the foreign exchange outgo was Rs. 11,099.55 Lacs (Previous Year Rs. 8,136.13 Lacs) and the foreign exchange earning was Rs. 421.08 Lacs (Previous year Rs. 532.96 Lacs).

DISCLOSURE PERTAINING TO REMUNERATION AND OTHER DETAILS AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Director Ratio of median remuneration
Mr. Yogender Mohan Sharma 2.36
Non-Executive Director
Mr. Udesh Dassani 0.07
Mr. Vijay Rathi 0.08
Ms. Deepika Arora 0.05
Mr. Nimishek Ved 0.05

(ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name of Directors, CFO and Company Secretary % increase in the remuneration in the financial year 2021-22
Mr. Yogender Mohan Sharma (Whole-time Director) Nil*
Mr. Udesh Dassani (Non-Executive Independent Director) Nil
Mr. Vijay Rathi (Non-Executive Independent Director) Nil
Ms. Deepika Arora (Non-Executive Director) Nil
Mr. Nimishek Ved (Non-Executive Director) Nil
Mr. Kailash Kumar Agarwal (Chief Financial Officer) 14.03%
Ms. Riya Bhandari (Company Secretary)** --

* Remuneration revised and as compared to previous year it is decreased by 60.59%.

** Appointed w.e.f. 01.04.2021. Since the remuneration is only for part of the year, the percentage increase in remuneration is not comparable and hence, not stated.

(iii) The percentage increase in the median remuneration of employees in the financial year: 9.37 %.

(iv) The number of permanent employees on the rolls of Company: 32

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2021-22 was 27.52% whereas there is no percentile increase in the managerial remuneration for the same financial year.

(vi) Affirmation that the remuneration is as per the remuneration policy of the company.

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