Sanghvi Brands Ltd Directors Report

During the year under review, your Company has achieved a consolidated turnover of Rs. 91,270.37 (in thousands) which is higher than compared with the previous financial year. The PAT of the Company has turned positive as compared with the previous financial year. Further, the Company has earned a net profit of Rs. 5032.87 (in thousands) in the financial year 2023-2024.

To strengthen the financial position of the Company, your directors are not recommending any dividend for the financial year under review.

The Balance in Reserves & Surplus stands at Rs. -12,070.16/- (in thousands) in comparison with the previous year’s balance of Rs. -11,483.34/- (in thousands).

The Total Paid-up Capital of the Company as on 31^st March 2024 is Rs. 10,41,58,800 divided into 1,04,15,880 equity shares of Rs.10/- each. There has not been any new issue of share during the year under review.

Your Companys equity shares are in demat form only. The Company has appointed National Securities Depository Limited and Central Depository Services India Limited as depositories to the Company.

In accordance with the provisions of the Companies Act, 2013 and SEBI Listing Regulation, 2015 the Board has been constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.

i. Retirement by rotation:

Mr. Darpan Sanghvi, Director retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting. A brief profile of Mr. Darpan Sanghvi has been given in the Notice convening the Annual General Meeting.

ii. Appointment and resignation of whole-time Key Managerial Personnel (KMP)

During the year under review there is no change in whole-time Key Managerial Personnel.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2024, are: a. Mr. Laxmi Rathi Chief Financial Officer (CFO) b. Ms. Kruti Shah, Company Secretary and c. Dr. Vijay Aggarwal (CEO)

iii. Declaration by Independent Directors

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.There has been no change in the circumstances affecting their status as independent directors of the Company.

None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013 and rules made thereunder or any other provisions of the Companies Act, 2013. The Directors have also made necessary disclosures to the extent required under provisions of section 184(1) of the Companies Act, 2013.

All members of the Board of Directors and senior management personnel affirmed compliance with the Company’s Code of Conduct policy on an annual basis.

The Board of Directors has the following Committees: a) Audit Committee b) Nomination and Remuneration Committee c) Stakeholder Relationships Committee

The details of all the Committees of the Board along with their composition and meetings held during the year are provided in the Report on Corporate Governance which forms part of this Annual Report.

The details of the meeting of the Board along with their composition and meetings held during the year are provided in the Report on Corporate Governance which forms part of this Annual Report.

The Companies Act, 2013 states that a formal annual performance evaluation needs to be made by the Board of its own performance, the directors individually as well as the evaluation of its committees. As per Schedule IV of the Companies Act, 2013, the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all directors and the Board was conducted based on the criteria and framework adopted by the Board.

10. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT

The Management Discussion and Analysis Report, in terms of Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms the part of this Annual Report as “Annexure I”

11. REPORT ON CORPORATE GOVERNANCE

Your Company has practiced sound Corporate Governance and takes necessary actions at appropriate times for enhancing and meeting stakeholders’ expectations while continuing to comply with the mandatory provisions and strive to comply nonmandatory requirements of Corporate Governance. Your Company has given its deliberations to provide all the information in Report on Corporate Governance as per the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which forms the part of this Annual Report as “Annexure II” as a matter of prudence and good governance.

Report on Corporate Governance Practices and the Auditors Certificate regarding compliance of conditions of Corporate Governance and certification by CEO/Whole time Director & CFO is not applicable to your Company as per regulation 15(2)(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

12. RELATED PARTY TRANSACTIONS

All related party transactions have been entered into by the Company during the financial year in the ordinary course of business and at an arms length price. During the financial year under consideration the Company has entered into contracts / arrangements / transactions with related parties, which could be considered as material in accordance with the provisions of the Act, have been given in "Annexure III" in Form No. AOC-2.”

13. STATUTORY AUDITOR

At the AGM of the Company held on 30th September 2021, M/s. B.K. Khare & Co., Chartered Accountants, having registration number (Firm Registration No. 105102W), were appointed as Statutory auditors of the Company for a term of five years i.e. till the conclusion of Annual General Meeting to be held in the year 2026.

The requirement for the annual ratification of auditors appointment at the Annual General Meeting has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 7, 2018. The Statutory Auditors have confirmed that they satisfy the independence criteria as required under the Act.

14. AUDITORS REPORT

The observations, if any, made by the Statutory Auditors in their Auditors Report together with the notes to accounts, as appended thereto are self-explanatory and hence do not call for any further explanation. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

The Report given by M/s. B.K. Khare & Co., Chartered Accountants on the financial Statements of the Company for the financial year 2023-2024 forms part of this Annual Report.

15. INTERNAL AUDITOR

The Board had appointed Komandoor & Co. LLP, Chartered Accountants, as the Internal Auditors of the Company to carry out the Internal Audit for the year 2023-2024 under the provisions of section 138 of the Companies Act, 2013.

The Company has received a consent letter from Komandoor & Co. LLP, Chartered Accountants, for their re- appointment as the Internal Auditors of the Company for the financial year 2024-2025 and the Board has reappointed them accordingly.

16. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. NKM & Associates (CP No. 20414) as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure IV to this report. The report is self-explanatory and does not call for any further comments.

17. COST RECORDS AND AUDIT

As per the Company’s (Cost Records and Audit) Rules 2014, the Company’s services are not covered under Cost Audit and for the services for which the maintenance of cost record is required is not applicable to the Company.

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

As per the provision of Section 138 of the Companies Act, 2013, the Company has devised a proper system to check the internal controls and functioning of the activities and recommend ways of improvement. Internal Audit is carried out timely. The internal financial controls with reference to financial statements as designed and implemented by the Company. During the year under review, no material or serious observation was received from the Internal Auditor of the Company for inefficiency and inadequacy of such controls.

19. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return is available on the Company’s website www.sanghvibrands.com

20. 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

There is no material transaction that has occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

21. COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company has complied with the Secretarial Standards related to the Board Meetings and General Meeting issued by the Institute of Company Secretaries of India (ICSI).

22. CORPORATE SOCIAL RESPONSIBILITY

Provision of Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company during the financial year under review.

23. VIGIL MECHANISM

Pursuant to the provision of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014, a "Vigil Mechanism Policy" for Directors and Employees of the Company is in place, to report their genuine concern of any violation of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, unethical behaviour actual or suspected fraud or violation of the Companys code of conduct etc. during the year under review, no such complaints were received.

24. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO, IN SUCH MANNER AS MAY BE PRESCRIBED

The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo as required under Section 134 (3) (m) of the Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are as stated below:

A) Conservation of Energy

1. The steps taken or impact on conservation of energy; The Company applied strict control system to monitor day to day power consumption. The Company ensures optimal use of energy with minimum extent of wastage as far as possible. The day-to-day consumption is monitored to save energy.

2. The Capital Investment on Energy Conservation Equipment. The Company has not made any capital investment in energy conservation equipment.

B) Technology Absorption: -

The Company has no activities relating to technology absorption.

C) Foreign Exchange Earnings and Outgo;

25. REVIEW OF SUBSIDIARY AND ASSOCIATE COMPANIES

As required under Companies Act, 2013, the audited consolidated financial statements of the Company incorporating all its subsidiary and associate companies prepared with applicable Accounting Standards are attached.

Salient features of subsidiary Companies are annexed as Annexure - V in form no.AOC-1.

26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPARTING THE GOING CONCERN STATUS ANDCOMPANY OPERATION IN FUTURE

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

27. DEPOSITS

Your Company did not accept/ hold/ any deposits from public/shareholders during the year under review.

28. PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements.

29. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT O F WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In accordance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed their under, the Company has formed an Internal Complaints Committee and framed and adopted the policy for Prevention of Sexual Harassment at Workplace. The following is the summary of Sexual Harassment complaints received and disposed of during the year 2023-2024.

No. of Complaints received: NIL No. of Complaints Disposed off: NIL

30. STATEMENT OF UTILIZATION OF PUBLIC ISSUE PROCEEDS PURSUANT TO REGULATION 32 OF SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATION, 2015

As per Regulation 32 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the listed entity shall submit to the stock exchange the statement indicating deviation, if any in the use of proceeds from the objects stated in the offer document, indicating category wise variation between projected utilization of funds made by it in its offer document, as applicable and the actual utilization of funds. However, there was no deviation on the objects of the issue proceeds and as review by the Audit Committee the statement is as under; Amount (Rs. in Lakhs)

31. HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

32. PARTICULARS OF EMPLOYEES

The Company has no employee Companies, who are in receipt of remuneration of Rs. 8,50,000/- per month or Rs. 1,02,00,000 per annum and hence the Company is not required to give information under sub rule 2 and 3 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

33. DIRECTORS RESPONSIBILITY STATEMENT

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) 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; (d) They have prepared the annual accounts on a going concern basis; (e) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and (f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. LISTING WITH STOCK EXCHANGES

Sanghvi Brands Limited listed its shares on the SME Platform of BSE Limited on November 22, 2017.The listing fees duly paid to the exchange and annual custodial fees have been paid to CDSL and NSDL for the F.Y. 2023-24.

35. ACKNOWLEDGEMENT

Your directors take this opportunity to thank all Government Authorities, Bankers, Shareholders, Registrar & Transfer Agents, Investors and other Stakeholders for their assistance and co-operation with the Company. Your directors express their deep sense of appreciation and gratitude towards all employees and staff of the Company and wish the management.