Sheetal Cool Products Ltd Directors Report.

TO THE MEMBERS OF SHEETAL COOL PRODCUTS LIMITED

The Directors hereby present their 8th Annual Report on the performance of the Company together with the Audited Financial Statements for the Financial Year (‘FY’) ended March 31, 2021.

1. Financial Results [Amount in Lacs Rs.]

PARTICILARS Year Ended 31.03.2021 Year Ended 31.03.2020
Total Revenue 23860.27 26018.51
Gross profit before depreciation, interest & tax 2959.67 3338.42
Less: Depreciation 1501.14 1586.30
Finance Costs 626.98 467.16
Pro t / (Loss) before tax 831.55 1284.96
Tax expenses 221.99 304.01
Pro t /(Loss) after tax 609.56 980.95

2. Company’s performance:

The Total Revenue for FY 2020-21 was Rs. 23860.27 Lacs, which was lower than the previous year’s Total Revenue of Rs 26018.51 Lacs by 8.30 % caused by the COVID-19 pandemic and efforts to curtail it. This had a severe impact on the economy in general and some business like ice cream, hotels, restaurants in particular. Consequently, the Company reported a profit after tax for FY 2020-21 of Rs 609.56 Lacs in comparison with a Pro t after tax of Rs. 980.95 Lacs for FY 2020-21.

3. Dividend:

No dividend has been recommended by the Board of Directors for the financial year ended 31st March, 2021.

4. Transfer to Reserves:

Your Directors do not propose to transfer any amount to Reserves and decided to retain the entire amount of profits in the profit and loss account.

5. Share Capital:

The paid up Equity Share Capital of the Company as on March 31, 2021 is Rs. 10,50,00,000/- comprising of 1,05,00,000 Equity shares of Rs 10/- each. We would like to inform to our shareholders that there is no change in the paid up equity capital of the Company during FY 2020-21.

6. Employees Stock Options Scheme

During the year, your Company has not issued any shares under Employees Stock Options Scheme to its employees.

7. Credit Rating

Due to timely repayment of interest and principal to lenders, Infomerics Valuation and Rating Private Limited has rea rmed rating of IVR BBB-/Stable (IVR Triple B minus) with Stable Outlook for Long Term facilities and Short Term facilities of the Company.

8. Management Discussion & Analysis

In terms of Regulation 34 (2) (e) of the Listing Regulations, 2015 read with other applicable provisions, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management’s Discussion and Analysis Report (MDA) which forms part of this Annual Report as Annexure A and is incorporated herein by reference and forms an integral part of this report.

9. Directors’ Responsibility Statement:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2020-21.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, con rm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. 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 view of the state of a airs of the Company at the end of the financial year and of the loss of the Company for that period;

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

10. Directors and Key Managerial Personnel:

In accordance with the requirements of the Act and the Company’s Articles of Association, Shri Dakubhai Jivarajbhai Bhuva retires by rotation and being eligible, offers himself for reappointment. Relevant resolutions (Ordinary and Special, as applicable) seeking shareholders’ approval forms part of the Notice.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’). In terms of Regulation 25 (8) of SEBI Listing Regulations they have con rmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external in uence. The Board of directors of the Company has taken on record the declaration and confirmation submitted by the independent directors after undertaking due assessment of the veracity of the same. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors of the Company have con rmed that they have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate A airs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014. The Independent Directors of the Company possess the requisite experience and hence shall not be required to pass the online pro ciency self-assessment test as per the proviso to Rule 6(4) of the aforesaid rules.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2021 are:

Mr. Bhupatbhai Bhuva - Managing Director Ms. Jinal Naria - Chief Financial Officer Ms. Juhi Chaturvedi - Company Secretary

11. Number of Meetings of the Board:

Seven meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report as Annexure B, which forms a part of the Annual Report.

12. 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 and SEBI Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and Structure; Degree of ful llment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); E ectiveness of board processes, information and functioning, etc.; Extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. At the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.

13. Vigil Mechanism:

The Company has established the necessary vigil mechanism for directors and employees in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about unethical behavior. The details of the policy are also available on www.scplco.com.

14. Internal Financial Controls

The Company has an internal financial control system commensurate with the size and scale of its operations and the same has been operating effectively. The Internal Auditor evaluates the e cacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company’s policies, safeguarding of Company’s assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. 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 corrective actions thereon were presented to the Audit Committee of the Board.

15. Audit Committee:

The details including the composition of the Audit Committee including attendance at the Meetings and terms of Reference are included in the Corporate Governance Report as Annexure B, which forms a part of the Annual Report.

16. Statutory Auditors:

At the 7th AGM held on December 28, 2020 the Members approved appointment of M/s. H.B. Kalaria & Associates, Chartered Accountants (Firm Registration No. 104571W) as Statutory Auditors of the Company to hold officefor a period of ve years from the conclusion of the 7th Annual General Meeting till the conclusion of the 12th Annual General Meeting to be held on in the year 2025.

17. Corporate Social Responsibility:

The Company has developed the policy on Corporate Social Responsibility (CSR) and was recommended by the CSR Committee and approved by the Board and the same can be accessed on the Company’s website at www.scplco.com.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure C of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

18. Auditor’s Report and Secretarial Audit Report:

The Statutory Auditor’s Report and the Secretarial Auditor’s Report are the part of this annual report. Secretarial Auditor’s Report is attached to this report as Annexure D.

19. Risk Management:

Formation of Risk Management Committee was not applicable to the company during FY 2020-21. However, the Company has voluntarily framed risk management policy and the same has been approved by the Audit Committee. The Company has been addressing various risks impacting the Company and details of the same are provided elsewhere in this Annual Report in Management Discussion and Analysis.

20. Particulars of Loans, Guarantees or Investments:

During the year, your Company has not given any loans, provided guarantees or made investments in terms of the provisions of Section 186 of the Companies Act, 2013. Therefore, no details are provided.

21. Related Party Transactions:

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company’s website at www.scplco.com.

During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms’ Length Basis. All transactions entered into with related parties were approved by the Audit Committee.

Further in the FY 2020-21, there were no material transactions of the Company with any of its related parties. Therefore, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the FY 2020-21 and hence the same is not provided.

22. Annual Return:

As provided under Section 92(3) and 134(3)(a) of the Act, read with Rule 12 of Chapter VII Rules of the Companies (Management and Administration) Amendment Rules, 2020, Annual Return in Form MGT-7 for FY 2020-21 is uploaded on the website of the Company and can be accessed at www.scplco.com.

23. Particulars of Employees:

The information required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure E to this report. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report.

24. Deposits from Public:

The Company does not accept and/or renew Fixed Deposits from the general public and shareholders. There were no over dues on account of principal or interest on public deposits.

25. Material changes and commitment affecting the financial position of the Company:

There is no any material change and commitment which have occurred between the end of the financial year and the date of the report which affect the financial position of the Company. However, there is change in key managerial personnel i.e. Ms. Juhi Chaturvedi, Company Secretary of the Company resigned w.e.f. June 30, 2021 and Mr. Kaushik Sakhavala appointed as a Company Secretary of the Company w.e.f July 01, 2021.

26. Significant and material orders passed by the regulators:

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s operations.

27. Cost Auditors:

In terms of Section 148 of the Act, the Company is required to have the audit of its costrecords conducted by a Cost Accountant. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s. Tadhani & Co. as the cost auditors of the Company for the year ending on March 31, 2021.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the Notice convening the AGM. M/s. Tadhani & Co. have vast experience in the eld of cost audit and have been conducting the audit of the cost records of the Company for the past several years.

The Company has maintained such accounts and records as per the aforesaid provisions and further has led Cost Audit Report for the financial year ended on March 31, 2020 with the Central Government in XBRL Mode within the time limit prescribed under the Companies Act, 2013.

28. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act):

The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Companys website at www.scplco.com.

29. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo [Pursuant to Companies (Accounts) Rules, 2014]:

Conservation of Energy:

The Company has established ground mounted 1.26 MW solar photovoltaic power project at tehsil, Chittal in Amreli district, which has been started generating electricity from 6th March, 2020. By installing this solar power plant company saved 25,22,970 units in electricity bill by captive consumption of such units.

Technology Absorption:

There is no material information on technology absorption to be furnished. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.

Foreign Exchange Earnings and Outgo:

Earnings: Rs. 65.25 Lacs

30. Acknowledgement:

The Board thanks the Company’s customers, vendors, investors and other stakeholders for their continuous support.

The Board also thanks the Government of India, Governments of various states in India and concerned Government departments and agencies for their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to ght this pandemic. The

Directors appreciate and value the contribution made by all our employees and their families and the contribution made by every other member of the SCPL family, for making the Company what it is.

By Order of the Board
For Sheetal Cool Products Limited
Bhupatbhai D. Bhuva
Date: June 22, 2021 Managing Director
Place: Amreli [DIN: 06616061]