Synergy Green Industries Ltd Directors Report.


Dear Members,

Synergy Green Industries Limited, Shahupuri, Kolhapur.

Your Directors have pleasure in presenting before you the Tenth Annual Report of the Company along with audited annual financial statement for the year ended March 31, 2020.

1. Financial Results

The following are the financial results of the Company for the year ended March 31, 2020

Particulars For the Year ended on 31st March, 2020 For the Year ended on 31st March, 2019
Revenue from Operations 2,07,87,46,489 1,65,02,46,928
Other Income 65,83,545 53,10,637
Profit Before Interest, Depreciation & Tax 23,19,80,937 20,63,17,340
Less : Finance Cost 9,58,88,333 8,62,69,849
Less : Depreciation & amortization Expenses 7,37,18,629 6,85,48,772
Profit before Tax 6,23,73,975 5,14,98,719
Tax Expenses 2,90,96,359 60,34,397
Profit after Tax 3,32,77,616 4,54,64,322
Less : Proposed Dividend & Tax thereon - -
Balance carried to Balance Sheet 3,32,77,616 4,54,64,322

2. State of Affairs

a) For the financial year 2019-20, your Company recorded net sales of Rs.207.87 Crores as against Rs.165.02 Crores in the previous year and achieved a YOY growth of 25.97%.

b) Profit before tax increased by 21.12% from Rs.5.15 Crore during FY 2018-19 to Rs.6.24 Crore during FY 2019-20. Net profit during FY 2019-20 stands at Rs.3.33 Crore as against Rs.4.55 Crore during FY 2018-19.

c) Absolute PBDIT figures increased by 12.44% from Rs.20.63 Crore during FY 2018-19 to Rs.23.20 Crore in FY 2019-20.

3. Industry Update & Future Outlook

a) Company has established strong customer base by developing parts to all the leading customers in the Industry.

b) Companys present customer base consists of Wind Parts 72%, Wind Gear Box Parts 15% & balance 13% from Non wind parts like mining and plastic injection.

c) Due to COVID-19 pandemic domestic volumes are likely to be impacted. Slowdown is expected in non-wind business also. In spite of adverse situation, moderate 10% revenue growth is forecasted by factoring 8 weeks of COVID-19 disturbances. This growth forecast is supported by strong export demand and additional capacities in place.

4. Economic Environment

a) Globally wind industry posted a healthy 19% growth during last year. This growth is forecasted to continue barring 2020-21 because of COVID-19 disturbances. As per GWEC report, 4% CAGR is forecasted next five years. Off shore business is growing at much faster pace of 20% with improved economics.

b) India is in the process of transforming in to a manufacturing hub for wind industry with establishment assembly lines by all major global OEMs in India. However, India needs to overcome its structural issues like land reforms, grid evacuation infrastructure, timely payment by electricity distribution companies to wind power generators to unlock the full potential opportunities in India.

c) Strong government support is visible to take the renewable share in electricity to 60% of countries consumption in another two decades. This growth is also focused to increase local content to enhance domestic industry growth. These two parameters are going to offer significant growth opportunities in coming years.

d) Global buyers sentiments are expected to improve towards India because of USA-China trade war and COVID-19 pandemic episode.

d) Non wind business is likely to be impacted due to COVID-19 pandemic and general slowdown in economy. Present year non wind business share estimated drop from 13% to 7% and will be getting replaced wind share. This demand is expected to bounce back during FY 2021-22.

5. Quality and Certification

Companys focus is on quality of the products manufactured through fulfilling the requirements as per international standards and customer satisfactions. Company manned with highly qualified team and is equipped with state-of-the-art testing facilities at its Plant.

Company is certified for Quality Management System (QMS) according to ISO:9001 2015 quality standards, ISO:14001 2015 Environmental management System and also ISO:18001 2007 Occupational Health and Safety Standards.

6. Dividend

There being carried over losses of previous years which have not been set off completely against profits of current year. In view of the same, the Board is unable to recommend any dividend for FY 2019-20 to the Equity Shareholders and Preference Shareholders.

7. Details of Subsidiaries, Joint Venture (JV) or Associate Companies (AC)

The Company does not have Subsidiary, Associate and Joint Venture Company.

8. Amounts proposed to be carried to any Reserves

The Company has not transferred any amount to the reserves during the Financial Year ended on 31st March, 2020.

9. Change in Capital Structure of the Company

During the year under consideration, there is no change in Capital Structure of the Company.

During the year the Company conducted Postal Ballot as per section 110 of the Companies Act, 2013 and applicable Regulations of LODR for seeking approval of members for alteration of Capital Clause of Memorandum of Association for change in nomenclature of 10% Non-Cumulative Preference Shares to 10% Cumulative Preference Shares.

Further, during the year under report company has not made buyback of shares or has not issued Bonus Shares, Sweat Equity Shares, Equity with differential voting rights and Employee stock option.

10. Change in nature of business, if any

During the Financial Year 2019-20 there was no change in the nature of business of the Company.

11. Material changes and commitments if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report

COVID-19 is likely to materially impact the financial position and statutory compliances of many companies in India. It is therefore important for Directors and the Management of each company to consider impact of COVID-19 before they sign off on financial statements and report for the financial year 2019-20. The financials of a company play an important role in depicting the state of affairs of the company and are relied upon by the stakeholders. Especially companies which have investments from FPI, Public or have financing arrangements from lenders / financial institutions need to pay attention while drawing up financials for FY 2019-20 due to COVID-19.

SEBI vide its Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated 20.05.2020 came up with the requirement of an advisory disclosure on material impact of COVID-19 on listed entities under SEBI(LODR) Regulations 2015. Hence, an endeavor to ensure that all investors have access to timely, adequate and updated information, Company is giving disclosures on the below points under the said circular;

• Impact of the COVID-19 pandemic on the business:

Impact is limited to lockdown period. There may be marginal reduction in the demand from local customers.

• Ability to maintain operations including the factories/units/office spaces functioning and closed down:

a) Operational interruption was for nearly 6 weeks with total stoppage of production.

b) Because of progressive lifting on restrictions, full operational recovery may take another 6 weeks minimum. This is likely to impact overall performance of the year.

• Schedule, if any, for restarting the operations:

The permission was obtained from statutory authorities to restart the production in the last week of April 2020.

• Steps taken to ensure smooth functioning of operations:

All precautions are taken to protect the employees by strict adherence to MHA guidelines to restart the production activities.

• Estimation of the future impact of CoVID-19 on its operations:

As of now not much adverse situation is foreseen, excepting the lockdown period impact on operations. However, this situation needs close monitoring on upcoming development on the pandemic.

• Details of impact of CoVID-19 on the Company -

o Capital and financial resources:

There was a temporary stoppage in cash flow due to lockdown in operations. However, this situation could be managed because of customer receipts during lockdown period as well and some relief from Bank by postponing term loan instalments and interest payments.

o Profitability:

There was a reduction in sales during March 2020 due to Covid-19 which results into 5% decrease in yearly sales during F.Y.2019-20. For current financial year 2020-21 we are expecting impact of nearly 20% on targeted Sales Turnover. This has impacted the profitability by 1% for the F.Y.2019-20 and another 3% during current Financial Year i.e. 2020-21 on forecasted figures.

o Liquidity position:

Because of lower debts company could manage the liquidity during this period.

o Ability to service debt and other financing arrangements:

All the debt and financing obligations are fully met and there are no defaults on this count.

o Assets:

There is no materialistic impact on assets.

o Internal financial reporting and control:

Internal financial reporting and controls are professionally managed and are in place.

o Supply chain:

There was an operational impact with our suppliers as well. However, they would be recovering faster along with our business recovery.

o Demand for its products/services:

Company is operating in wind turbine casting (80%) and Non wind castings (20%).

Wind Business: 75% demand of wind castings are of domestic and 25% of exports. A marginal impact in domestic business is expected for the short period of 3 to 6 months. However, increase in demand is noticed with export market due to favourable buyers sentiments towards India.

Non-Wind Business: Non-Wind Business will be impacted significantly for next 3-6 months.

As a whole there is not much impact from demand side to organization.

• Existing contracts/agreements where non-fulfilment of the obligations by any party will have significant impact on the listed entitys business:

Force major notice has been served to all the customers. There would not be any impact on organization from customer contractual non fulfilment.

• Other relevant material updates about the Companys business:


12. Significant & material orders passed by the Regulators or Courts or Tribunals

There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation.

13. Board of Directors and Key Managerial Personnel

The Board of the Company comprises an optimum combination of Executive, NonExecutive and Independent Directors.

I. Directors appointed / re-appointed during the year and date of


a) Mr. Chandan Shirgaokar (DIN:00208200), Director, retired by rotation and was re-appointed in the Annual General Meeting held on 18th September, 2019.

b) Mr. Niraj Shirgaokar (DIN: 00254525), Director, retired by rotation and was re-appointed in the Annual General Meeting held on 18th September, 2019.

c) Mr. Subhash Kutte was appointed as Additional Independent Director in the Board Meeting held on 9th January, 2019 for a term of 5 years. His appointed was further confirmed in the Annual General Meeting held on 18th September 2019.

Mr. Subhash Kutte aged 67 Years, is Non-Executive Independent Director of our Company. He holds a degree of Bachelor of Commerce and also completed his Intermediate C.A. He is having total experience of 42 years in banking sector. He had started his carrier in banking with Tasgaon Urban Co-op. Bank as Manager from December 1977. Then he Joined Ratnakar Bank (presently known as RBL Bank) as Probationary Officer in June 1980 and worked in Sangli Branch. He kept on getting various promotions with periodical intervals in the Ratnakar Bank Ltd. He was appointed as Managing Director & Chief Executive Officer in the Ratnakar Bank Ltd. from 30th April 2008 to 30th June 2010. Thereafter he was appointed as Chairman of the Bank from 1st July 2010 to 30th June 2014. He has worked as Senior Advisor to the Bank from 1st July 2014 till 30th June 2018.

d) Mr. Vendavagali Srinivasa Reddy was re-appointed as Executive Director by the Board in the Board meeting held on 5th February, 2020.

e) The Board approved the revision in the remuneration of Mr. Sachin R. Shirgaokar, Managing Director and Mr. Sohan S. Shirgaokar, Joint Managing Director.

II. Directors resigned during the year and date of Report

There was no resignation by any Director during the year under report.

III. KMPs appointed / resigned during the year and date of Report

There was no change in composition of Key Managerial Persons (KMP).

IV. Directors / KMP who have been appointed / ceased to be Directors and / or KMP after the end of year and date of Report

There is no change in the composition of Board as well as in KMPs of the Company during the year under report.

V. The present Board of Directors and KMPs consists of :

Name of Director & KMP Category & Designation
Mr. Rajendra V. Shirgaokar Chairman & Non-Executive Director
Mr. Prafulla V. Shirgaokar Non-Executive Director
Mr. Shishir S. Shirgaokar Non-Executive Director
Mr. Chandan S. Shirgaokar Non-Executive Director
Mr. Niraj S. Shirgaokar Non-Executive Director
Mr. Jeevan V. Shirgaokar Non-Executive Director
Mr. Dattaram P. Kamat Independent Director
Dr. M. R. Desai Independent Director
Mrs. Prabha P. Kulkarni Independent Woman Director
Mr. Meyyappan Shanmugam Independent Director
Mr. Subhash G. Kutte Independent Director
Mr. Sachin R. Shirgaokar Managing Director
Mr. Sohan S. Shirgaokar Joint Managing Director
Mr. V. S. Reddy Executive Director (Technical)
Mr. Suhas B. Kulkarni Chief Financial Officer
Mr. Nilesh M. Mankar Company Secretary

VI. Directors proposed to be re-appointed at the ensuing Annual General Meeting

Mr. Shishir S. Shirgaokar (DIN: 00166189), Non-Executive Director and Mr. Jeevan V. Shirgaokar (DIN: 00254572), Non-Executive Director, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board had reappointed Mr. Vendavagali Srinivasa Reddy (DIN: 03425960), as Executive Director for a period of 3 years w.e.f. 1st April, 2020 to 31st March, 2023 in their meeting held on 5th February 2020 subject to approval of members in ensuring AGM.

Brief Profile of Mr. Vendavagali Srinivasa Reddy for information of the members is as follows:

Mr. Vendavagali Srinivasa Reddy, aged 51 years, is the Whole Time Director of our Company. He holds a degree of Master in Technology from NIFFT, Ranchi and Bachelor in Mechanical Engineering from SKD University, Andhra Pradesh. He also credited with Executive MBA from IIM Bangalore and Six Sigma Black Belt. He started his carrier in 1995. He has about 25 years of experience in the Industry. He handled various responsibilities in the field of product development, operation management, green field foundry project design and execution. He also worked in key positions of various companies like Simplex Casting Limited, U.P Steels and Larsen & Toubro Limited.

VII. Policy on Directors Appointment and remuneration

The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attitudes, independence of the directors and other matters provided under section 178(3) of the Act and the listing regulations adopted by the board is available on web site of the Company and details of remuneration paid to the Board of Directors are provided in Annexure IV & V. We affirm that remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.

14. Declaration from Independent Directors

During the year under review, all Independent Directors have given declaration that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013.

15. Number of Board Meetings held

Total 4 (four) Board Meetings were held during the financial year 2019-20 on:

1. 20th May 2019 2. 28th August 2019
3. 12th November 2019 4. 5th February 2020

The gap between any two consecutive Board Meetings did not exceed 120 days.

16. Particulars of Employees

The particulars of employees pursuant to Section 197 of the Companies Act, 2013 read with Sub-Rule (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as an Annexure - V.

17. Committees

The Company has constituted Audit Committee, Nomination & Remuneration Committee and Stakeholder Relationship Committee. The Board of Directors in their meeting held on 28th August, 2019 constituted Corporate Social Responsibility Committee in compliance with the provision of Section 135 of the Companies Act, 2013. The details of constitution of these committees are furnished below:

Audit Committee:

Name of Director Nature of Directorship
Mrs. Prabha P. Kulkarni Independent Director (Chairman)
Mr. Dattaram P. Kamat Independent Director
Dr. Mallappa R. Desai Independent Director
Mr. Subhash G. Kutte Independent Director
Mr. Rajendra V. Shirgaokar Non-Executive Director
Mr. Chandan S. Shirgaokar Non-Executive Director

Nomination and Remuneration Committee :

Name of Director Nature of Directorship
Mr. Dattaram P. Kamat Independent Director (Chairman)
Mrs. Prabha P. Kulkarni Independent Director
Mr. Prafulla V. Shirgaokar Non-Executive Director
Mr. Niraj S. Shirgaokar Non-Executive Director

Stakeholders Relationship Committee :

Name of Director Nature of Directorship
Mrs. Prabha P. Kulkarni Independent Director, Chairman
Mr. Dattaram P. Kamat Independent Director
Mr. Shishir S. Shirgaokar Non-Executive Director

Corporate Social Responsibility Committee:

Name of Director Nature of Directorship
Dr. Mallappa R. Desai Independent Director (Chairman)
Mr. Meyyappan Shanmugam Independent Director
Mr. Chandan Shirgaokar Non-Executive Director

Additionally, during the financial year ended 31st March, 2020 the Independent Directors held separate meeting on 5th February, 2020 in Compliance with requirement of Schedule IV of the Companies Act, 2013 and Regulation 25 (3) of the SEBI (Listing Obligations & Disclosure Requirements).

18. Disclosure Under, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has duly Constituted Internal Complaints Committee under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Based on Annual Report of said committee and as per Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 the disclosure details are as follows:

Constitution of Committee as on date of this report

a) Members of Committee:

Name Role in Committee
Miss. Divya Patil Presiding Officer & Engineer - Technology
Mrs. Rima Patil Member & Jr. Officer - HR & Admin
Miss. Maya Patil Member & Engineer - Marketing
Miss. Yogita Yedurkar Member & Engineer - QA
Mr. Sanjay Patil Member & Dy. Manager - HR
Mr. Ram Birangaddi Member & Asst. Sr. Manager - Accounts
Dr. Kalindi Ranbhare External Member

b) Report of Committee:

Particulars Details
Number complaints received in the year Nil
Number of complaints disposed off during the year NA
Number of cases pending for more than ninety days NA
Number of workshops or awareness program carried out against sexual harassment during the year Nil
Action taken by the Company NA

19. Vigil Mechanism / Whistle Blower

The Company has adopted a Vigil Mechanism Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

20. Development and Implementation of Risk Management Policy

The Company has in place a mechanism to identify, assess, monitor, and mitigate various risks to key business set-up for the Company. As a part of Risk Management Policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly.

The Board does not foresee any risk which might threaten the existence of the Company.

21. Deposits

The Company has accepted deposits of Rs.630.67 lakhs and repaid Rs.190.17 lakhs during the financial year 2019-20 of the members under provisions of section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014. The amount of deposits of Rs.630.67 lakhs are yet to be matured.

Following are the disclosures relating to Deposits accepted:

Particulars Amount
Rs. In lakhs
Details of deposits accepted during the year 630.67
Deposits remaining unpaid or unclaimed as at the end of the year 630.67
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, the number of such cases and the total amount involved: at the beginning of the year; maximum during the year at the end of the year; NIL
Details of deposits which are not in compliance with the requirements of the Act; NIL

Credit Rating

The Board of Directors wish to raise deposits from the members during FY 2019-20 for which a Board resolution was passed on 20th May 2019 and circular for inviting deposits in Form DPT-1 was approved for issuing it to members. The said circular for inviting deposits in Form DPT-1 was submitted with the Registrar on 18.09.2019 and was issued to members on 22.10.2019. Accordingly, in order to comply with the provisions of section 73 of the Companies Act, 2013, Credit rating for the outstanding deposits and proposed deposits was obtained from Crisil Ratings on 05.09.2019. The Agency had assigned the Rating of "FB+/Positive" (pronounced as F B plus rating with positive outlook) for the Deposits.

22. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information required under section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given herein below:

a) Conservation of Energy:

Melting furnace is upgraded with dual track system which is facilitating to operate both the furnaces simultaneously. This will minimize metal holding period during double furnace heats and reduce power consumption by 5% of 1150 Units/MT consumption.

Brownfield expansion to increase the capacity from 15,000 TPA to 30,000 TPA will reduce the power consumption per MT of casting by 2% due to enhanced utilization of the plant & machinery.

b) Technology Absorption:

During the new material grade SG 500/14 is developed in collaboration with customer. This grade is part of SSDI family which offers higher strength and higher elongation as well and facilitate the designers to optimize the part weight with superior mechanical properties.

One of the key things for improving the organizational efficiency is to capture high quality data for analysis and improvement. During the year SAP software was implemented to bring entire business process under high quality data management system.

Apart from above, it is being evaluated to implement data analytics to bridge the gap between machines and SAP. This will help in implementing IOT in the organization to bring highest efficiency in operations.

c) Foreign Exchange Earnings & Outgo:

During the year, the total foreign exchange outgo was equivalent to Rs.6,93,19,447 and the total foreign exchange earned was equivalent to Rs.29,57,79,718.

23. Corporate Social Responsibility (CSR)

The report as per Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure III.

24. Auditors

i) Statutory Auditors

In Annual General Meeting held on 3rd August, 2018, M/s. P. G. Bhagwat, Chartered Accountants (Firm Registration No. 101118W), has been appointed as statutory auditors of the Company for the period of three years to hold office from the conclusion of this Annual General Meeting till the conclusion of the Annual General Meeting of the Company to be held in the year 2021. With notification of amendment to Section 139 by the Companies (Amendment) Act, 2017, provision for ratification of appointment of auditors at every Annual General Meeting of the Company has been omitted. Accordingly, it is brought to the notice of the members that ratification of appointment of statutory Auditors will not be required.

ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed C. S. Kelkar & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit for F.Y. 2019-20 is annexed herewith as an Annexure - II to this Report.

iii) Cost Auditors

Pursuant to provisions of section 148 of Companies Act 2013, M/s. Adawadkar Chougule & Associates, Cost Accountants (Firm Registration No.00425) have been re-appointed for conducting Audit of cost records maintained by the Company for the products, applicable as per Companies (Cost Records and Audit) Amendment Rules, 2014 for F.Y. 2020-21. The Audit Committee of the Company has also recommended appointment of M/s. Adawadkar Chougule & Associates, Cost Accountants, as Cost Auditor of the Company. Their remuneration is subject to approval by the Members.

Maintenance of Cost Records

Company is duly maintaining cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013

iv) Internal Auditor

The Board has appointed Mr. Tarzan Deepak Mule, Manager (Accounts) of the Company, as an Internal Auditor of the Company for F.Y. 2020-21 pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 of the Companies Act, 2013.

25. Explanation or Comments of Statutory Auditors and Secretarial Auditor

The Notes on financial statements referred to in the Auditors report are selfexplanatory and do not call for any further comments. The Statutory Auditors Report and Secretarial Audit Report do not contain any reservation or adverse remark except following points;

1. Instead of submitting PDF, the Company had submitted link of Annual report for the F.Y. 2018-19 under a wrong category on BSE system for which Company was in receipt of email from BSE for non-compliance of Regulation 34- Submission of Annual Report to Stock Exchange and had imposed a penalty for the same. The management replied to the BSE, since it was a first year after listing and was merely an inadvertent mistake. An explanation letter was submitted to BSE in detail and accordingly BSE withdraw the penalty which was imposed under the regulation as mentioned above.

2. The Code of Insider Trading was changed twice in the last F.Y.2019-20 out of which one change was informed to the Stock exchange immediately and second was filed immediately after observed in the secretarial Audit.

3. Intimation under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 for acquisition/ disposal made by Promoter exceeding traded value of INR 10 lakhs was intimated by the Company within prescribed time limit of 2 trading days. However, the disclosure of such acquisition/ disposal by the Promoter, M/s. S. B. Reshellers Pvt. Ltd. to the Company was made late beyond prescribed time period of 2 trading days to the Company due to unavailability of Legal/Secretarial Staff at investors end.

26. Directors Responsibility Statement

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, the Directors state :

1. That in the preparation of the Annual Accounts for the year 31st March, 2020, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. That 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 affairs of the Company at the end of the financial year and of the profit of the Company for the period;

3. They 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;

4. That the annual financial statements have been prepared on a going concern basis;

5. That they have laid down internal financial controls to be followed by the Company and that such internal financials controls are adequate and are operating effectively.

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

27. Extract of Annual Return

The extract of Annual Return u/s 134 (3)(a) and u/s 92(3) read with Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 is attached to the Report as Annexure-IV. Copy of the extract of annual return has also been placed on the Companys website viz.

28. Particulars of Loans, Guarantees and Investments

The Company has not given any loan or guarantee or security or made investment under Section 186 of the Companies Act, 2013 during the financial year.

29. Particulars of Related Party Transactions

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 during the financial year were in the ordinary course of business and at an arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013.

The Company has formulated a policy on materiality of Related Party Transactions and on dealing with Related Party Transactions. The Company has also taken omnibus approval from Audit Committee held on 26th June, 2020 for the F.Y. 202021.

The particulars of related party transactions in prescribed Form AOC - 2 are attached as Annexure I.

30. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the Regulations, the Board has carried out performance evaluation of its own performance and that of its committees and individual Directors.

31. Corporate Governance

As per Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 relating to Corporate Governance is not applicable to the Company since Company is listed on the SME platform. Hence the Company is not required to disclose information as covered under Para (C), (D) and (E) of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As per Para (F) of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company do not have and is not required to have the demat suspense account / unclaimed suspense account.

32. Management Discussion And Analysis Report

Management Discussion & Analysis report for the year under review as stipulated under Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure VI hereto and forms part of this Report.

33. Internal Control Systems and their adequacy

The Company has an Internal Control Framework, which is commensurate with the size, scale and complexity of its operations. This framework ensures adequate safeguards and process to address the evolving business requirements. The Company has in place adequate internal financial controls with reference to financial statements. The Company adopted Internal Audit Programme specifying mission, scope of work, independence, accountability, responsibility and authority of said Internal Audit. The Company has also appointed Mr. Tarzan Deepak Mule as internal auditor and designated as Manager (Accounts) of the Company for conducting Internal Audit for the Financial Year 2020-21.

In order to ensure that all these systems are working smoothly and with no errors or malfunctions, the Company has an Internal Audit System, which covers various functional areas within the Company as per the audit program drawn up in consultation with the audit committee on an annual basis.

Strengthening of controls is a continuous and evolving process in the Company. The management undertakes preventive and corrective actions, which are then horizontally deployed across the organization. During the year, such controls were put to test and no reportable material weaknesses were observed, either in framing the controls or their implementation.

In addition, the Company has constituted an Audit Committee, which oversees the various aspects of the financial and other controls, including Annual operating plans, quarterly reporting of performance, annual accounting etc.

34. Companys Policy on Directors, Key Managerial Personnels and Senior Management Personnel Appointment and Remuneration

The Company has adopted Nomination and Remuneration Policy based on recommendations of Nomination and Remuneration Committee of the Company, for selection and appointment of Directors, Key Managerial Personnels, Senior Management and fixing their remuneration. Disclosures of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V".

The details of remuneration paid to the Directors including the Managing Directors and Whole Time Director of the Company are given in Form MGT-9 forming part of the Directors Report.

The Policy is placed on the Companys website, viz

35. Compliances with respect to applicable Secretarial Standards

During the year under review, the Company has complied with all the applicable Secretarial Standards.

36. Acknowledgements

Your directors would like to place on record their appreciation for the support to the Company received from the Employees at all levels. Our growth was made possible by their hard work, solidarity, cooperation and support. We would also like to thank our Bankers, Associates and all other clients and well-wishers.


DIN : 00254442 DIN : 00217631