Sanginita Chemicals Ltd

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.

The brief financial results are as under:

(Rs. In lakhs)

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.

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

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.

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

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

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

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.

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.

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.

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

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.

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.

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.

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.

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 Auditor's Report on the Accounts. The observations comments and notes of Auditor are self-explanatory and do not call for any explanation /clarification.

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 arm's 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 Member's approval for ratification of remuneration payable to the Cost Auditor was approved by the members of the Company.

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:

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 Shareholder's 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.

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 Company's code of conduct or ethics policy. The details of the policy are posted on the website of the Company.

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.

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.

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 Company's shareholders may refer the Company's 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 Company's remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.

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:

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

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

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.

(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.

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

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

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.

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.

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.

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 Company's website at www.sanginitachemicals.co.in.

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.

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

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 arm's length basis and the same are in the best interest of the Company. The related party transactions are due to business exigencies.

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.