Sanginita Chemicals Ltd Directors Report

To

The Members

SANGINITA CHEMICALS LIMITED

Your Directors take pleasure in presenting the NINETEENTH Annual Report of the Company together with Audited Financial Statements for the financial year ended on 31^st March, 2024.

FINANCIAL SUMMARY/HIGHLIGHTS:

The brief financial results are as under:

(Rs. In lakhs)

Particulars	2023-24	2022-23
Gross Revenue from Operation	15150.30	14856.41
Other income	44.86	56.67
Total revenue	15195.16	14913.08
Profit/(Loss) before Depreciation and Tax	178.83	110.53
Less: Depreciation	74.43	55.32
Profit/(Loss) Before Tax and Extra Ordinary Items	104.40	55.21
Less: Extra Ordinary Items	Nil	Nil
Less: Current Tax	(21.36)	(12.70)
Deferred Tax	6.06	0.90
Profit/(Loss) After Tax	76.98	41.61
Add: previous year Profit/(Loss)	1655.34	1613.73
Balance Carried to Balance Sheet	1732.32	1655.34

The Gross revenue from operations of the Company for the year 2023-24 has increased from Rs. 14856.41 Lakhs to Rs. 15150.30 Lakhs. Moreover, profit before Depreciation and Tax stands increased from Rs. 110.53 Lakhs to Rs. 178.83 Lakhs.

SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:

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

MATERIAL CHANGES AND COMMITMENT:

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

REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:

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

DIVIDEND:

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

TRANSFER TO RESERVE:

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

RIGHTS ISSUE OF EQUITY SHARES:

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

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 Mr. Vijaysinh D. Chavda (DIN: 00479413), Whole Time Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself to be re-appointed as Director of the Company. The Board recommends the re-appointment of Mr. Vijaysinh D. Chavda as Director of the Company liable to retire by rotation.

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

The Company is likely to receive proceeds of Rs. 15.54 Crores upon successful completion of its proposed Rights issue. The utilization of proceeds of the Rights issue will be reported after its deployment in due course.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:

1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

3. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the Directors had prepared the annual accounts on a going concern basis; and

5. that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS:

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

FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:

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

NUMBER OF MEETINGS OF BOARD:

The Board of Directors duly met 5 (Five) times on 18^th April, 2023, 14^th July, 2023, 16^th August, 2023, 13^th October, 2023 and 11^th January, 2024.

INDEPENDENT DIRECTORS:

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

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

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

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

AUDITORS:

M/s. Devpura Navlakha & Co., Chartered Accountants, the existing Auditors of the Company were appointed as Statutory Auditors of the Company at 14^th AGM for holding the office from the conclusion of that 14^th AGM till the conclusion of 19^th AGM. However, the term of appointment of five years of M/s. Devpura Navlakha & Co., Chartered Accountants ending at this Annual General Meeting. Hence, the Company needs to appoint any other Statutory Auditor for a term of five years.

The Company has received a Special Notice u/s 140 (4) of the Companies Act, 2013 from a member of the Company for appointing M/s. B. K. Chavda & Co., Chartered Accountant, Gandhinagar as Statutory Auditor of the Company. Further M/s B. K. Chavda & Co., Chartered Accountants are Peer reviewed Auditors and hence the Company will not require to Audit the Accounts separately from Peer Reviewed Auditors. Moreover, M/s. B. K. Chavda & Co., Chartered Accountant, Gandhinagar have given their consent to act as Statutory Auditor of the Company and also provided declaration that their appointment, if made shall be within the limit prescribed.

The members are requested to consider the matter of appointment of Auditors and also to fix their remuneration.

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

COST AUDITORS AND COST AUDIT REPORT:

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors on recommendation of Audit Committee have appointed M/s. A G Tulsian & Co., Cost Accountants, as Cost Auditors of the Company for the financial year 2023-24. M/s A. G. Tulsian & Co. have confirmed that their appointment is within the limits of the Section 139 of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 of the Companies Act, 2013.

The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arms length relationship with the Company. The Cost Audit Report for the financial year 2022-23 was filed with the Ministry of Corporate Affairs on 4^th September, 2023.

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

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Company has appointed M/s. Manoj Hurkat & Associates, firm of Company Secretaries in Practice to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure- 1". AUDIT COMMITTEE:

The Audit Committee consists of the following Directors:

1. Mr. Jagdishkumar Thakor	Chairperson
2. Mr. Faiyazkhan Pathan	Member
3. Mr. Vijaysinh Chavda	Member
NOMINATION & REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee consists of the following Directors:
1. Mr. Faiyazkhan Pathan	Chairperson
2. Mr. Jagdishkumar Thakor	Member
3. Mr. Pramodsinh D. Dabhi	Member
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee consists of the following Directors:
1. Mr. Faiyazkhan Pathan	Chairperson
2. Mr. Jagdishkumar Thakor	Member
3. Mr. Vijaysinh Chavda	Member

RISK MANAGEMENT POLICY/PLAN:

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

VIGIL MECHANISM:

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

CODE OF BUSINESS CONDUCT AND ETHICS:

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

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

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

REMUNERATION POLICY:

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

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

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

ANALYSIS OF REMUNERATION:

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

Disclosure/details pursuant to provisions of Section 197(12) of the Companies Act 2013 read with Companies (appointment and Remuneration of managerial personnel) Rules, 2014 are given as follows:

Names and Positions	[A] Ratio of Directors Remuneration to the median Remuneration of Employees	[B] Percentage (%) increase in Remuneration
Mr. Dineshsinh B. Chavada (Chairperson & Managing Director)	3.33	Nil
Mr. Vijaysinh D. Chavda (Whole Time Director)	4.41	Nil
Mrs. Hansaben D. Chavada (Director)	0.65	Nil
Mr. Faiyazkhan Y. Pathan (Independent Director)	Nil	Nil
Mr. Jagdishkumar V. Thakor (Independent Director)	Nil	Nil
Mr. Pramodisnh D. Dabhi (Independent Director)	Nil	Nil

The median remuneration of employees of the Company during the financial year was Rs. 153036/- p.a.

[C] Percentage increase/(decrease) in the median Remuneration of Employees	4.03%
[D] Number of permanent Employees on the rolls of Company	60 (Sixty)
[E] 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	There was increase of 0.47% in the average salaries of employees other than managerial personnel in the year 2023-24. There was decrease in the Managerial Remu- neration in the year 2023-24 in view of the fact that the remuneration was not paid to some of the managerial per- sonnel for some part of the financial year in view of mutual understanding between the Company and the respective Managerial Personnel.There was no significant change in the remuneration to CFO and CS in the year 2023-24.

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

PARTICULARS OF EMPLOYEES:

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

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

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

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

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

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

(iii) Service contracts, notice period and severancefees:

The term of Managing Director and Whole Time Director is valid till 22^nd November, 2024. Notice period is 6 months on either side or the Company paying 6 months remuneration in lieu of such notice and no severance fees.

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

REGULATORY ORDERS:

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

CSR COMMITTEE:

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

DETAILS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of energy
(i) the steps taken or impact on conservation of energy	The Company accords high priority to conservation of energy. However, there are no specific steps taken in this regard.
(ii) the steps taken by the company for utilizing alternate sources of energy	The Company is not utilizing alternate sources of energy.
(iii) the capital investment on energy conservation equipments	NIL
(B) Technology absorption
(i) the efforts made towards technology absorption	NIL
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution	NIL
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)	The Company has not imported any technology during the year. Hence, there are no details to be furnished under each of the sub clauses in this clause.
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
(iv) the expenditure incurred on Research and Development	There are no expenditure incurred on Research and Development by the Company.
(C) Foreign exchange earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and	Rs. 1240.25 Lakhs
The Foreign Exchange outgo during the year in terms of actual outflows	Nil

INTERNAL FINANCIAL CONTROL:

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

DEPOSITS:

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

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

CORPORATE GOVERNANCE:

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

EXTRACT OF ANNUAL RETURN:

In Compliance to the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual Return of the Company for the financial year ended 31^st March, 2024 has been available on the Companys website at www.sanginitachemicals.co.in.

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

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

MANAGEMENT DISCUSSION AND ANALYSIS:

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

RELATED PARTY TRANSACTION:

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

APPRECIATION:

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

Your Directors also take this opportunity to place on record the valuable co-operation and continuous support extended by its valued business associates, Practicing Company Secretary, Auditors, Supplier, Customers, Banks / Financial Institutions, Government authorities and the shareholders for their continuously reposed confidence in the Company and look forward to having the same support in all its future endeavors.

	By Order of the Board
	Sd/-
Place : Gandhinagar	Dineshsinh B Chavda
Date : 30th May, 2024	(DIN: 01497977)
	Chairperson & Managing Director